The John Batchelor Show

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Batchelor & Constable: The PIGS of Europe

By John Batchelor on February 28, 2009 8:46 PM | 0 Comments

Batchelor and Constable Feb 25: The P.I.G.S. of Europe.  Last week, Simon Constable and I explored new information from the EU that the collective prejudice of the big economies of Britain, France and Germany is that the Mediterranean states of Portugal, Italy, Greece and Spain (PIGS) have squandered their treasure and are looking for hand-outs and bail-outs from the EU as soon as March 1.  We were told that the EU rules forbid rescuing the failed economies and banks of member states, however the rules can be changed.  We also reported an anecdote from Germany, the most potent EU state, that the turmoil of layoffs has already started among the unions, and that the surliness of the British National Party in north England, protesting so-called foreign workers at an Elf Total refinery, is spreading to Continental Europe.  Simon asked rhetorically about "brownshirts," who were associated with and aggrandized by the degradation of the Great Depression after 1933.  Adolf Hitler and Hermann Goering were Great Depression opportunists.  Within days, we found this report from Germany of trouble with a new radical gang called BMW (auf Deutsch, a clever acronym for Movement for Militant Resistance) that claims to have torched the Porsches of the wealthy in Berlin.

Marketwatch: GOP Sees Weakness in Obama Team

By John Batchelor on February 26, 2009 9:52 PM | 1 Comment

GOP Sees Weakness in Obama Team 2/26/2009
Radio host John Batchelor tells Dow Jones columnist Simon Constable why the congressional Republican party sees signs of weakness in the government's new financial team despite high approval ratings for the president himself. (Feb. 26)

Beast.

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Simon and I discuss a detail of the piece published on TheDailyBeast.com re the GOP House -- also made reference to on my post about Secretary Tim Geithner and Chair Ways and Means Charlie Rangel.  What is fresh is that after the President's quasi SOTU, after the stress test details were rolled out at Treasury, after the introduction of the pie in the sky multiple trillion dollar budget, the S&P 500 continues to sag. Technicians note that the 750 floor did not hold last week, though the 741 sell-off of last November did hold (barely).  We are either putting in a new floor, or we are facing a test that points to a breakdown to the 600 level.   Tax policy is a key concern of the markets, and the Obama team delivered a scalding future for prosperous families and small, small businesses.  Also there is a proposal to limit mortgage deduction for prosperous homeowners, aimed at storing up treasure to offset universal healthcare.  In all, the Obama teams offers an ambitious, threatening, opaque and class warfare sounding budget proposal (right, after the Bidget proposal, Joe Biden, the President, Geithner, Budget Director Peter Orszag) using tax policy as an income redistribution tool.  And whose tax policy?  And will Charlie Rangel supervise the writing of the policy as the Obama administration proposes?  Rangel and Geithner are in the same party now, but Charlie Rangel does not report to Treasury nor to the White House.   The Chair of the Ways and Means is a Cardinal of Congress with the whip hand.

Marketwatch: What Bank Nationalization Really Means

By John Batchelor on February 22, 2009 9:18 AM | 2 Comments
Simon Constable of Dow Jones Newswires asks radio show host John Batchelor what it will mean for the banks if they are nationalized and finds out about a new idea: pre-privatization. (Feb. 19).  Nouriel Roubini in WSJ 2/21/09: 'Nationalize' the Banks   Paul Krugman NYT 2/20/09: Nationalization fears

Marketwatch: Afford A Better House with Government Help

By John Batchelor on February 19, 2009 6:06 PM | 1 Comment

Afford a Better House With Government Help:  Radio host John Batchelor talks to Simon Constable of Dow Jones Newswires about how you can use the stimulus plan's provisions to trade up to a better home. (Feb. 19)  We learned from the wondrous site Calculated Risk that Beaver the Mover in the O.C. is suddenly getting calls for work from young pros who have a job, careers and ambitions to move on up and take advantage of the fallen houses prices.  Putting this anecdote together with the amazing bargains offered on the hot new housing website Trulia.com, and connecting this to the stimulus bill and the new Treasury proposals on mortgages, we came up with a cheerful scenario where it is possible to live well and cheaper in a bigger house with a real yard in Southern California.  Jim the Realtor on CR also provided a bold lesson in how a San Diego County Chula Vista neighborhood of million dollar homes can swiftly lose value and hope in a depression.  Yet there is always opportunity for the adventurous. (Executive Producer Lee Mason)

WSJ.com: Obama Beware: Protectionism in Canada

By John Batchelor on February 18, 2009 10:34 PM | 0 Comments

At the NASDAQ Theater in New York, Simon Constable, Dow Jones, and John Batchelor focus on the imminent visit of President Obama to Ottawa, Canada, the first foreign trip for the new president, and why he may be greeted by "Buy Canada" growling in the Parliament and the streets if not from the miffed but polite PM Stephen Harper.   Ever since House Speaker Nancy Pelosi permitted her House member Jim Oberstar and others to write in a "Buy America" mandate to the stimulus bill, now law, that directs a favoritism for American steel and iron products, the Canadians have been rallying against American protectionism.  The "Buy America" clause was a major alarm for the G-7 ministers meeting in Rome with Treasury Secretary Timothy Geithner last weekend.  However the protectionist rhetoric is not just about the US.  France, Russia, Egypt are openly favoring their products.  Simon and John also discuss the surly unemployed British citizens at Grimsby in the north of England, who complain that the EU rules have permitted Elf Total to bring in cheaper foreign workers for the refinery rather than hire locally.  They ask with fire in their eyes, "Who's protecting our jobs other than the BNP (British National Party)?"  President Obama must first address the trade enmity between America and Canada before the Obama administration can answer the can anxious questions from our trading partners,  As a Seoul trade official recently asked our colleague Joe Sternberg of the Asia Wall Street Journal in Hong Kong, "Haven't the Americans learned from Smoot Hawley?"  Excellent interrogatory.  John recommends the Obama administration cut off the twin heads of the Smoot Hawley creature now.  (Executive Producer Lee Mason.)

Marketwatch: Look Out For The D-Word

By John Batchelor on February 13, 2009 1:47 AM | 0 Comments

"Simon Constable and radio host John Batchelor talk about the word Depression. What does it mean, and why are politicians and policy makers reluctant to use it? (Feb. 12)"  The surprising discovery is that the word "depression" was used so freely and commonly as early as the spring of 1930, less than six months after the October 1929 Crash.  The original 
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depression, called the Long Depression afterward, started in 1873 and may have dragged onward to 1897, a grueling downturn that drove European countries to grab out for colonies in Africa to help grow their way out of despair.  The Great Depression that began in 1929 transformed into a global catastrophe after the summer of 1930, and everyone called it a depression, politicians to convicts to movie stars to the Joads enroute to California (right).  So far, we have caught only U.K. PM Gordon Brown and IMF Managing Director Dominique Strauss-Kahn using the word in public and on TV.  The others insist upon hiding behind the banal word "recession."   What's in a name?  Fear.

Marketwatch: Is Steel Sending a Message?

By John Batchelor on February 12, 2009 7:33 PM | 0 Comments

"Simon Constable talks with radio host John Batchelor about whether steel prices and the state of the steel industry are sending a warning about the world economy. Are there parallels to what happened in the 1930s? (Feb. 12)"  The warning signs are everywhere -- the biggest steel company in the world, Arcelor Mitall, just cut its dividend in half after saying it would not -- that the present crisis in the financial markets is evidence of a worldwide plunge of 
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construction and growth.   What makes this downturn look foreboding is that it resembles the moment in June 1930 right before the Smoot Hawley (right) Tariff Act passed the U.S. Senate 44-42 and was signed into law by Herbert Hoover. The surprising spread of new protectionism right now, from the U.S. to France to Russia and India, resembles the same sort of scenario that turned off trade after Smoot Hawley and wrecked the US and global economy for a decade. In truth, the withering of trade in the 1930s, marked by the collapse of the steel index in the U.S. that matched the collapse of steel in Germany and all Europe, led to the beggarly conditions that spawned the Devils in the Axis Powers. Is there a future major shooting war indicated in the declining steel index and rising trade reprisals of 2009? Unknown.

Dow Jones: Simon Constable with David Ranson: Tax Cut Better Than Stimulus

By John Batchelor on February 10, 2009 12:33 PM | 0 Comments


David Ranson, of H.C. Wainwright Economics, talks with Dow Jones Newswires' Simon Constable about the government efforts to jump start the economy and explains to Simon Constable why a tax cut would be better.  Within hours of Simon's conversation with David Ranson, Rasmussen published a poll that showed that 62% of the respondents want more tax cuts in the stimulus plan.  62% Want Stimulus Plan to Have More Tax Cuts.
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Marketwatch: Restricting Bonuses on Wall Street

By John Batchelor on February 4, 2009 2:39 PM | 0 Comments

Simon Constable and John Batchelor enjoy the unavoidable Schadenfreude of watching super-rich bankers scrambling as they prepare to live without their multimillion dollar annual bonuses.   All those Westchester and Monmouth county estates, those exploited staffs, dream vacation compounds, ghastly yachts, gun-stuffed hunting lodges and 
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convenient Maybachs soon to be dumped on the high net worth market.  Sotheby's Real Estate to be flooded with Downeast beachfront.  Within hours of our polite mention of how Missouri Senator Claire McCaskill's notion to limit all executive pay in firms on the federal dole is walking in the footsteps of the wondrous populist Louisiana Senator Huey "Kingfish" Long and the rollicking "Share Our Wealth" phenomenon of 1935 (right), the President announced "guidelines" for the "exceptional" firms now on federal life-support.  The Obama administration "guidelines" do not carry the weight of a law.  These "exceptional" firms are not listed.  Who in the unlisted companies is to be capped and who is not to be capped is not delineated.  And the idea that these capped would receive shares of their enterprises that cannot be redeemed until some time in the distant future when all money is paid back to the government is left so vague that it invites an immediate Comedy Central sitcom, "Hobo Billionaire."  This is just the beginning of litigation, negotiation, arbitration and incineration -- and perhaps the establishment of the Bonus Czar at the White House and the Ministry of Riches at Treasury.  And now we learn that Connecticut Chris Dodd vows to get the bonus money back from the plunderers!  And New York State Attorney General Andrew Cuomo is targetting John Thain for repossession of his 2008 bonus!  Who is writing this script?  Well done!  Keep going!  Don't wait for Ayn Rand.  John Galt is hunting deer for food; he'll be down from the Rockies come the Spring thaw. 

Wall Street Journal: Is Protectionism Rearing Its Ugly Head?

By John Batchelor on February 3, 2009 8:11 PM | 0 Comments
Simon Constable and John Batchelor continue exploring the back to the future of the global economic collapse, what Nouriel "Dr. Doom" Roubini calls a "near-depression."  The Obama stimulus package contains a mandate that is strikingly similar to the protectionism in the Great Depression.   Congress insists that the new construction projects in the $820 billion bill must "Buy American" steel and iron products. This is routine protectionism, giving unfair advantage to American works, and the Canadians are furious. The facts are that Canada is America's No. 1 trading partner and that America exports more steel to Canada than Canada exports to America. Why punish Canada by forbidding its products in a massive build-out? The answer is that protectionism is popular just now in the face of the decline of all manufacturing.  The "Buy American" in the stimulus bill is a direct descendant of the trade wars of the 1930s launched by the passage of the infamous Smoot Hawley bill in the Senate and signed into law by Herbert Hoover in June 1930. The market crash of 1929 did not plunge the world into a decade long depression that made fertile ground for the Devils of Stalin, Mussolini, Hitler and Tojo; it was the trade wars that destroyed trade, commerce, jobs and the stock market -- and invited the extreme chauvinism and tribal savagery of World War 2.  Is it too late to stop the trade war? Yes. Can it be contained by WTO intervetion? No. Will the Obama administration climb down from the protectionist rhetoric that the President employed during his campaign and that the President's allies in the House and Senate wrote into the stimulus bill? Remains to be seen, with the first word coming that the White House is seeking compromise after hearing loud, angry remarks from the EU.  There is no word if the Congress will obey the President and edit out "Buy American."

MSNBC: John Batchelor with Alex Witt 2-1-09

By John Batchelor on February 1, 2009 1:57 PM | 1 Comment
 
My followup remarks with MSNBC's amiable Alex Witt on Superbowl Sunday re my praise of Rahm Emanuel in TheDailyBeast.com as a man who does his job very well -- does it so well that it resulted in, "O votes" from the Republicans for the stimulus package in the House.   I did manage to get in a tip to the famous Senate Minority Leader Charles L. McNary of Oregon, mentioned as a man who coopeated with FDR in his first week as POTUS, March 1933. When asked again what is wrong with the 2009 stimulus package written entirely by Mrs. Pelosi and the Democratic Majority in the House, I repeated, "It's pork."