This is only the partial picture of interest expense. The true measure is (Interest Exp + Pay-Go Entitlemts). Pay-Go Entitlements are merely the “interest expense” needed to float the $100T+ in entitlements.
via @investentropy pic.twitter.com/Jm8r47pauy
— Luke Gromen (@LukeGromen) October 31, 2018
The Dems Need This Fiction To Camouflage Fraud
October 29, 2018
The only thing more certain than death and taxes is that, every election cycle, the Democrats will accuse Republicans of “voter suppression.” They inevitably insist that requiring individuals to possess photo identification in order to cast a ballot is a sinister right-wing conspiracy to prevent minorities from exercising the franchise. For black conservatives like Candace Owens, this claim is incredibly patronizing. It implies that, as she recently put it, “Black people are too stupid to figure out how to get identification.” She is right, of course, but the Democrats dislike voter ID laws for another reason: They depend on fraud to remain viable.
The obvious purpose of asking voters to prove who they are and where they live is to prevent fraud. The Democrats claim that voter ID laws are unnecessary because fraud is uncommon. This is nonsense. As Thomas Sowell once put it, “One of the biggest voter frauds may be the idea… that there is no voter fraud.” Yet the Democrats make this claim every election cycle while filing sham lawsuits alleging voter suppression, which is quite rare. Last week, for example, they convinced a New Hampshire judge to halt enforcement of Senate Bill 3 (SB3), a law requiring voters to provide proof of residency. The New Hampshire Union Leader reports:
The lawsuit to block the law [SB3] from taking effect was filed last year by the New Hampshire Democratic Party, the League of Women Voters of New Hampshire and individual voters who claim the new registration requirements are onerous and an unnecessary obstacle to exercising their constitutional rights.… The DOJ simultaneously filed an emergency motion with the state Supreme Court.
Bill Holter’s Commentary
“WHY” would they do this?
Fed To Ease Liquidity Requirements For Regional Banks As Brainard Warns Of More Bailouts
October 31, 2018
On Wednesday the Federal Reserve is set to vote on proposals that would further ease capital requirements for banks with assets of $700 billion or lower, expanding on Trump’s promise to deregulate Wall Street.
The biggest benefits will come to banks with between $100 billion and $250 billion of assets – or the bulk of regional banks – who would no longer have to adhere to liquidity coverage ratio and proposed net stable funding ratio, according to prepared remarks by Fed Vice Chairman of Supervision Randal Quarles. Firms between $100 billion and $250 billion would also face stress tests every two years, instead of annually
“A reduction of this magnitude is appropriate because most U.S. banking firms in this group are not engaged in complex activities and have more stable funding than systemic banks given their relatively traditional business models,” said Quarles.
At the same time, Non-Wall Street banks that have more than $250 billion of assets would move to a “calibrated” liquidity coverage ratio that is in the range of 70% to 85% of full LCR, Bloomberg notes.
Meanwhile, large banks will generally see little benefits from today’s deregulation: Quarles said that large bank holding companies now have about $1.3 trillion of capital, and the Fed proposals would reduce that by only $8 billion.
Curiously, Fed Governor Lael Brainard said she plans to vote against proposals, arguing they would raise “the risk that American taxpayers again will be on the hook” to bail out banks.
“I see little benefit to the institutions or the system from the proposed reduction in core resilience that could justify the increased risk to financial stability and the taxpayer,” Brainard says in prepared remarks.
Bill Holter’s Commentary
As we have said many times, watch credit!
GE Locked Out Of Commercial Paper Market After Moody’s Downgrade
October 31, 2018
Yesterday we asked if, as a result of its ongoing operational troubles and recent downgrade by S&P, GE was facing another Commercial Paper “moment”, with a Moody’s downgrade now imminent. The reason is that GE has traditionally been one of the biggest issuers of Commercial Paper to fund daily operations, and used to be one of the biggest issuers of the debt: veteran readers may recall that during the financial crisis, GE’s loss of access to the frozen CP/Money Market nearly resulting in a terminal liquidity crisis at the industrial conglomerate.
Since then, GE’s reliance on commercial paper was material, and in the second quarter, GE had on average around $16.6 billion of the debt outstanding – a sizable portion of its total $116 billion in debt.
A warning shot came in early October, when S&P cut GE’s short-term grade to A-2, a level below the top tier. That’s a rating of commercial paper that some classic prime money market funds are reluctant to buy. In fact, prime money market funds historically had to have at least 97% of their securities rated at least A-1 from S&P and P-1 from Moody’s, but those rules were loosened amid this decade’s money market reform. Even so, as Bloomberg noted, many funds would be far less willing to buy securities with a split rating, i.e., where at least one rating is below A-1 or P-1.