Jackson Hole speech

The Chairman seems to be well aware of the upturn in housing, which he mentioned twice. But he was careful to not reveal an upbeat attitude that he knows would cause rates to spike in expectation of the Fed ‘normalizing’ policy with ‘neutral’ being a Fed funds rate maybe 1% over the inflation rate, or something like that.

In other words, he wants longer term rates, and mtg rates in particular, to stay down for now, which causes him to guard any optimism he may have, and then some.

It falls under ‘managing expectations’ and my best guess is he’s waiting for unemployment to fall below 8% before he publicly becomes more optimistic.

“Key sectors such as manufacturing, housing, and international trade have strengthened, firms’ investment in equipment and software has rebounded, and conditions in financial and credit markets have improved.”

“Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.”

Gasoline Rising to Holiday High as Storm Surge Presses Obama

Headwind for consumers again:

Gasoline Rising to Holiday High as Storm Surge Presses Obama

By Asjylyn Loder

August 28 (Bloomberg) — Hurricane Isaac and a deadly blast at Venezuela’s Amuay refinery pushed gasoline to an almost four- month high and threatened to revive a debate about energy costs in the run-up to the presidential election in November.

Futures jumped yesterday in New York as Isaac forced closures of Gulf Coast refineries and reduced rates at others. That market is also reeling from an Aug. 25 explosion in Venezuela that killed at least 48 people and closed the country’s largest fuel-making plant. Futures are up 23 percent since their 2012 settlement low of $2.5501 a gallon on June 21.

Prices at the pump will be the highest ever for the U.S. Labor Day holiday, AAA said yesterday. The surge reignites an issue that has pitted President Barack Obama, who has called for the elimination of billions of dollars of subsidies enjoyed by the oil and gas industry, against the presumptive Republican nominee Mitt Romney. It also spurs speculation that Obama will release supplies from the Strategic Petroleum Reserve to ease prices for consumers.

“Given this administration’s belligerent rhetoric against the oil industry, it’s going to be very easy for Romney to pin the blame on Obama,” said Stephen Schork, president of Schork Group Inc., a consulting firm in Villanova, Pennsylvania. “The White House will be on the defensive. It makes an SPR release likely sooner rather than later.”

Gasoline for September delivery advanced 7.68 cents, or 2.5 percent, to $3.1548 a gallon yesterday on the New York Mercantile Exchange, the highest level since April 30. Futures fell 2.87 cents, or 0.9 percent, to settle at $3.1261 today.

Retail Prices

Retail prices for regular grade increased 0.6 cent to $3.756 a gallon yesterday, the highest level since May 7, according to AAA, the largest U.S. motoring group. Gasoline at the pump cost $4.138 in California yesterday, $4.008 in Connecticut and $3.973 in New York.

The nationwide average fuel cost rose to $3.75 a gallon on Aug. 26, the highest price ever for that day, Michael Green, a spokesman for AAA in Washington, said in an e-mail.

“We expect the national average price of gasoline for Labor Day this year to be the highest ever for the holiday,” he said.

Drivers could be paying $4 a gallon by the end of September, Schork said. The first presidential debate is scheduled for Oct. 3.

Winter-Grade Fuel

Gasoline futures for October delivery fell 0.6 percent to settle at $2.9333 a gallon, 19.28 cents a gallon below the September contract. The discount reflects speculation that demand will slip as peak driving season ends with the Sept. 3 Labor Day holiday, and the switch to winter-grade fuel that doesn’t have to meet as stringent emissions rules and is cheaper to produce.

Obama has described his energy strategy, unveiled in March, as an “all-of-the-above” approach that encourages fossil fuel development, energy efficiency and renewable technology. He has also called for a repeal of what he estimated is $4 billion in subsidies every year.

Romney’s energy plan, released last week, faulted Obama for discouraging drilling on federal land, stifling offshore exploration, imposing costly regulations and subsidizing uncompetitive technology that can’t survive without government backing.

Solyndra LLC, a solar-panel maker in Fremont, California, that received a $535 million U.S. loan guarantee, sought bankruptcy protection in September and fired its 1,100 workers.

Refinery Shutdowns

Gasoline advanced yesterday as refiners including Exxon Mobil Corp., Phillips 66 (PSX) and Valero Energy Corp. (VLO) said they are temporarily shutting down Gulf Coast plants as Isaac churns toward the Louisiana coast.

Six plants with a combined ability to process about 1.15 million barrels of crude a day are shut, according to data compiled by Bloomberg. That’s 6.7 percent of U.S. capacity.

In addition, plants including Motiva Enterprises LLC’s Norco, Louisiana, Exxon’s Baton Rouge operations and Marathon Petroleum Corp.’s Garyville facility are at lower rates. Valero’s Memphis plant was said to be operating at minimum rates after Royal Dutch Shell Plc shut the Capline pipeline that transports crude oil from the Gulf to the Midwest.

“Right or wrong, higher gasoline prices don’t help Obama,” Kyle Cooper, director of research for IAF Advisors, a Houston consulting group, and Cypress Energy Management LP, a $20 million natural-gas hedge fund based in Houston, said by phone yesterday. “All Obama’s rhetoric and all his propaganda can’t do a thing if the refineries are flooded. He can’t change physics. And Romney will take the other side of it, but this storm is not Obama’s fault.”

they know nothing…

G7 Urges Oil Exporters to Increase Production

August 28 (Reuters) — The Group of Seven finance ministers urged oil-producing countries on Tuesday to raise output to ensure the market is well supplied, while warning that Western nations were ready to tap strategic oil reserves to offset rising prices that could hurt global growth.

“We stand ready to call upon the International Energy Agency to take appropriate action to ensure that the market is fully and timely supplied,” the G7 said in a statement. “The current rise in oil prices reflects geopolitical concerns and certain supply disruptions. We encourage oil-producing countries to increase their output to meet demand.”

Oil prices have strengthened as Hurricane Isaac approached the U.S. coast and the administration of President Barack Obama said separately on Tuesday that it was still open to a possible release from the Strategic Petroleum Reserve.

“That option has been on the table for some time, and remains on the table, but we have no announcements to make today,” White House spokesman Jay Carney told reporters traveling to Iowa with President Barack Obama.

Earlier this year, the White House considered tapping the reserve but held off after oil prices fell. Reuters reported this month the White House was dusting off those plans, and some energy experts viewed Isaac as a potential trigger for such a move.

Oil production in the U.S. Gulf of Mexico was down more than 90 percent on Tuesday as Hurricane Isaac headed toward the Louisiana as a Category 1 storm. The storm was expected to make landfall as early as Tuesday night.

Energy analysts do not expect extensive damage to oil and gas infrastructure if the storm stays in line with current projections.

Still, any supply disruptions could raise pressure for a release of emergency oil supplies.

“We remain vigilant of the risks to the global economy. In this context and mindful of the substantial risks posed by elevated oil prices, we are monitoring the situation in oil markets closely,” the G7 said.

Finance ministers also noted that Saudi Arabia had committed at a G20 meeting of world leaders in Mexico earlier this year to use its spare oil production capacity to ensure adequate supply.

The comments from the finance ministers is a strong signal that a release may be imminent, said Jan Stuart, head of energy research at Credit Suisse in New York.

“A significant group of industrialized countries now appears to be ready to make reserves available — they know that when you make statements at this level, you also need to be ready to follow through,” Stuart said.

Ryan and Greenspan on Social Security

If any of you know Mr. Ryan kindly remind him of this exchange, thanks:

PAUL RYAN: “Do you believe that personal retirement accounts can help us achieve solvency for the system and make those future retiree benefits more secure?”

ALAN GREENSPAN: “Well, I wouldn’t say that the pay-as-you-go benefits are insecure, in the sense that there’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The question is, how do you set up a system which assures that the real assets are created which those benefits are employed to purchase.”

2013 TED Prize Nomination Acknowledgement

>   
>   (email exchange)
>   
>   On Fri, Aug 24, 2012 at 6:25 PM, Barry wrote:
>   
>   FYI.
>   
>   Cross fingers!
>   

Thank you for your 2013 TED Prize Nomination.
Your nomination and nominee will be reviewed over the coming weeks and you will be notified as to the success of your nomination by mid-September.

With best wishes,

The TED Prize team

http://www.tedprize.org


Best,
The TED Prize Team

interesting comment on my blog

Mosler knows!
Thayer knew!
Ruml knew!
Jim Lacey apparently knows, and so did a couple of economists that helped the USA prosecute and win WW2: Robert Nathan and Simon Kuznets.

Keep from All Thoughtful Men: How U.S. Economists Won World War II

I got to page 34.

“Orthodox economic thinking at the beginning of World War II held that taxes should finance wars on a pay-as-you-go basis.”

A fascinating book about what looks to be how MMT won the War. I’m still reading.
And I’m betting that we didn’t need to use all of Great Britain’s gold that they shipped to New York at the start of the war….

MMT in Italy

Translation:
The national launching of the book by W. Mosler – The Seven Deadly Innocent Frauds

MI – Feast of the Southern Italians (Meriondalisti italiani)
MMT Democracy
Modern Monetary Theory
To build an economy that saves lives, saves the state, and saves democracy
A state with sovereign money, legitimized by the citizens, that spends with a positive deficit for the benefits of us 99%, that is the only true democracy.
Daniele Basciu of MMT Democracy – Italy will be at the event in Vasto, CH
The national launching of the book by W. Mosler – The Seven Deadly Innocent Frauds