Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford F-150 and Chevy Silverado "” along with Ford's Escape midsize SUV "” climb into the Top 10 most-popular vehicles purchased with the government rebates.
In at least 145 cases the government reported consumers traded old vehicles that got better than or the same mileage as the new vehicle they purchased. A driver in Negaunee, Mich., traded a 1987 Suburban that got 18 mpg for $3,500 toward a new Silverado pickup that got only 15 mpg. An Indianapolis driver traded a 1985 Mercedes 190 that got 27 mpg for $3,500 toward a new Volkswagen Rabbit that got only 24 mpg. In at least 15 deals in nine states, owners of large pickups cashed in old trucks for between $3,500 and $4,500 toward new Hummer H3 SUVs that got only 16 mpg.
3. Double secret probation - Former banking regulator William Black writes at MichaelMoore.com out the absurdity of the US Treasury's plan to regulate 'systemically dangerous institutions', but not to tell anyone who they are.
I'll put aside for a later time discussing the obscenity of proposing that the American people be kept from learning which banks are SDIs and can secretly tap the U.S. Treasury and the Fed for unlimited funds. I'll also mention only in passing the hilarity of Congress proposing that we can successfully create a super secret society of those, including some members of Congress, who will know which banks are on the list "“ and will never leak. Here, I want to emphasize the investor. The drafters have forgotten that the SEC mandates the disclosure of material information to investors. The fact that a bank is on the secret list is extraordinarily important to investors. So, the bill as drafted would create a system in which the banking regulators and Congress must keep the DOUBLE SECRET PROBATION list secret "“ but the banks must publicly disclose that they are on the list. Of course, it's possible that the Treasury and the Fed "“ you remember, the folks that tell us constantly about their commitment to "transparency" "“ are actually so insane that they will propose amending the securities disclosure laws and destroy the entire concept of mandating that publicly traded companies disclose material information to investors.
4. Ludicrous - A Wellington artist has been forced out of business making diaries by a bigger competitor who complained that the artist was getting his diaries made cheaply in China, Stuff reports. HT BK Drinkwater and Eric Crampton at Offsetting Behaviour.
Michael McCormack, an artist of Irish extraction living in Island Bay, found success when he produced a diary featuring his works of Wellington scenes in 2008. But when he had another run made in China for 2009, he was surprised to find he could not pick them up until he paid a 53 per cent "anti-dumping" levy. Talks with the Economic Development Ministry revealed that, with a few select items such as diaries, a levy has been enforced to deter countries selling items in New Zealand at cheaper prices than they do at home.
5. Cannibal Capitalism - Here's a cartoon that speaks for itself from the Salt Lake Tribune.
6. The new depression - Now 'regular' Americans are having to compete with immigrants for piecemeal work in places like Home Depot in Las Vegas, the Las Vegas Sun reports. Here's the story of one guy. HT Mish
In the Las Vegas Valley, where the most recent unemployment rate was 13.9 percent, one face of this phenomenon is Ken Buchanan. The 50-year-old describes himself as a "food and beverage" guy, most recently working for four years at Renata's Sunset Lanes casino and, before that, 30 years in a string of restaurants, hotels and casinos here and in his birthplace, Chicago. But in 2006 Renata's closed for remodeling. When the casino reopened as Wildfire, the management did not rehire Buchanan, he said. In the months that followed, Buchanan discovered the difficulty of seeking work in his fifth decade, eventually winding up at Green Valley Car Wash, where he stayed for about two years, he said. The banks foreclosed on the house he was renting. In the attempt to grab his things two steps ahead of the constable, he wound up missing work. He lost his job. He became homeless. A Hispanic man Buchanan met in Renata's sports book told him he had picked up work standing outside the Home Depot on Pecos Road at Patrick Lane. One July day, Buchanan gave it a try. At first, he got nothing but sunburn. But then he started to get work. Now he's at the Home Depot six days most weeks.
7. The real value of gold - A man tries to sell a US$1,100 gold coin for US$50 and fails. It's a bit of a joke of course, but raises some interest questions about the real value of gold. Some people offered to buy it with a credit card... 8. Not sympathetic - Auckland University tax law academic Michael Littlewood has a good close look in a NZHerald column at the NZ$2 billion worth of tax that the big 4 banks didn't pay and decides he's not very sympathetic. Fair enough. I think they should stop appealing and repay the money now, particularly given they've all provisioned for it.
First, the banks and their advisers have blamed their problems on an alleged lack of clarity in the law. They have claimed, too, that this lack of clarity deters investment. But these complaints deserve no sympathy, for the law relating to tax is no less clear, and probably much clearer, than other areas of the law; and there is no reason why people seeking to escape tax should get any more clarity than anyone else. More importantly, it would be naive to think that rewording the legislation would reduce the problem. No matter what the legislation says, some taxpayers will attempt to escape tax, and the courts will have to decide whether they should be permitted to get away with it.
9. Momentum building - Simon Johnson at Baseline Scenario looks more closely at the split between Gordon Brown and Tim Geithner over Brown's Tobin Tax (a tax on international capital movements). Momentum seems to be building on this one, but I have my doubts. All it takes is one large country to opt out and it won't work. But I'd welcome a good debate in the comments on this. Is a Tobin Tax a good idea? Or are we more likely to see some sort of tax on 'excessive risk taking' that the IMF is working on?
After months of painful procrastination, Gordon Brown has finally recognized that Adair Turner "“ head of the UK Financial Services Authority (FSA) and astute critic of Big Finance "“ is on to something in this regard. At St. Andrews on Saturday, Brown actually proposed (and his mandarins briefed in private) on the need for a tax on financial transactions "“ a version of the "Tobin tax". Brown knows full well that such a tax is unlikely to get traction in the current environment, partly as it would be hard to implement (i.e., the scope for evasion through off-shore financial centers is enormous). But the point of his announcement was to shock and awe finance ministers "“ and this worked. Secretary Geithner was provoked into uncharacteristically sharp pushback, which came across as the sort of rebuke that a minister of finance seldom directs at a head of government. Brown and his team have at last understood that reigning in the financial sector needs to be front and center of the international agenda "“ and the troika structure of the G20 allows them (as outgoing chairs) to keep this issue hot. It also provides political cover for the IMF, which is working hard on a tax for "excess risk taking" in finance. Dominique Strauss-Kahn (head of the IMF and leading candidate of the left for the next French presidential election) astutely provided more details in the aftermath of the Brown remarks "“ thus making it harder for the US to oppose the IMF technocrats (and the French), who now seem so very moderate compared to Brown.
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