Comments & Feedback

A suggestion. Since I am really tired of all this criticism of the government stepping ijnto private industry, I think a weekly scorecard might be appropriate, looking something like this

Government Scorecard

Bank Bail out cos Gov't loan Repaid/ not Gain/ loss

Citibank
B of A

etc

Gov't stock purchase

Aig
Chrysler
Gm

etc

And maybe a category for gov't involved business operations

Fanny Mae
Freddy Mac
Amtrak
US Post Office

Etc

Let's see just how much the gov't has lost on each of these decisions and track whether or not we are still involved in the various business operations that the gov't has assisted.

— James Craig

Steve,
After watching Paul Ryan on Squawk this morning I was desperately looking for a contact or email address - this was the best I could find. In a nutshell, you were correct; what Ryan describes no one can get although Joe K. nods his head like a bobble-head doll that he does because it is contra-Obama.

I am a Phi Beta Kappa graduate of the UNC Master of Accounting program and a director of tax for a Fortune 1000 company so I am not a complete dolt and will take a shot at what Paul Ryan was trying to make you (and us) believe.

We take away one tax benefit - tax exempt employer-provided health insurance benefits with another, a tax credit. As you point out, the latter costs the government money. Assuming that the same folks who received health benefits before get the credit after then it is revenue neutral. But no one is better off. You are just swapping one provision for another. If you say that everyone will get a credit even if they do not pay taxes (oh my, that will offend the sensibilities of Joe the Plumber, will it not?) then many more people will receive benefits than did not before, those who did not chose employer-provided health insurance or it was not available. But that cost money. No matter how Ryan spins it (and Joe K. nods vigorously in agreement) loss of revenue is the same effect as spending. This is all baloney designed to look like something fiscally responsible and revenue neutral when common sense tells you it is not. Like many folks, I am concerned with the big deficits and enormous government spending. I am all ears if the Republicans are ready to bring forward viable alternatives. Once again, they are providing nothing but posing.

Bottomline, you are right; you don't get it, I don't get it and, apparently Joe Kernan didn't get it.

Best,
Owen

— Owen West

I would like you to consider why vehicle dealers need state protection. Dealers have invested great deals of money in land, building and developing staff through investments in training. Many dealers have put more than 20 years into there business. It is unfair, after all that time for the manufacturer to come in and suddenly cut off product. The manufacturer can continue to supply vehicles to the dealer through these times. This helps the manufacturer sell slow moving stock and keeps factories busy. Any small expense the manufacturer may have is offset by just a few vehicle sales to the dealer. The dealer also offers support and service to the many customers that own the brand. I don't want to have drive to another town to get service. In closing, the dealers have supported the manufacturers all these many years by buying more product than the market could support and the dealer is thanked with a pink slip.

— OLlivin

Steve,

You are brilliant, and the sound, rational voice so frequently found between the bufoon apologists for Greedy Wall St otherwise known as Charlie Gasparino and Rick Santelli -- why, oh why, do you let them ridicule you without retort? Please, for the love of Pete, smack them down! I just watched Charlie show you no respect on tonight's Kudlow Report by interrupting you repeatedly and then not take a hit for his poor reporting.

— sanjai

Steve,

Do you think the Obama administration and the Fed are going in the right direction to fix the economy?

— Bruce Miller-978263

Mr. Liesman,

Do you think its time you stop putting down Rick Santelli on CNBC ?
In case you have not seen any of the tapes, it is very obvious it started
when Mr. Santelli spoke out about the Obama mortgage plan and then
went on the Today show the next day. You show your jealousy every day
on TV. It is not becoming.

Also, OBAMA is not the next coming of your other favorites Clinton, Carter
and others in the Democratic party.

After all, you are supposedly an Economist right ? You should act like one.

Chris Fumai
cjfumai@optonline.net

— Chris Fumai

3/02/09 8:55 pm et

What really needs to be looked into is the "crowd" that was behind the ballooning of the stock market late 90's, that transitioned into the housing market scam Up through the 2000's, that then shifted over to inflation of the oil market for the p&d, and then helped put Up the $$ to put the minion in the white house to get the gp to cover the debt incurred (left holding the bag)...while those that pulled the strings..are off watching the graveling...to their amusement....which after they get their market crash...will come in and buy Up the weakness!

and please...esp MCC...let your guests speak w/out interruption..and if there is not enough time..book fewer guests to a lot the time...

MMC and Larry needed to learn restraint!

but jmo

— David-932432

Hi Steve,

I just wanted to find a place to let you know that I appreciated your perspectives on Marginal Tax rates with Gasparino this morning. I'm a small business owner (micro small would probably be more accurate). There is one thing though that I have always understood about a business that seems to always be missed in this discussion. A business gets to take its gross income and lower that amount by its allowed expenses before tax is calculated. An employee, however, must pay tax on the gross of their income.

So, if a business wants to give less money to the government the easiest solution is to increase expenses and the largest expense you can incur is to higher more employees. I know my judgment about whether I should higher an employee is based on the amount of services my customers are buying, not on tax rates. On the other hand, an individual who is earning $1m/year wanting to have a $30,000 tax break is probably not going to turn around and hire someone with that extra 30k, they are going to pay for more luxury items. We need more dish washers, TVs, personal goods and services to be sold in this country, not diamond necklaces and Ferraris.

I remember back in the 90s when a conservative movement in my state passed legislation to lower property taxes. When I calculated my taxes that year, the reduction in property tax actually raised my marginal tax rate because having less to declare in property taxes moved me into a higher income tax rate which more than wiped out my savings and had the effect of taking money away from my state and instead sending it to the Federal Government.

I'm no fan of paying any more taxes than anyone else and I have dreams of my ideas carrying me into the level of the uber-rich, but at the moment I appreciate some recognition that what helps me is not having my mutual-fund manager get another 30k but me getting an extra 1k to buy some electronic products that I'd like to have.

— robr-1

Resolving the Housing Crisis
- Significantly reduce the inventory of homes. - Create construction jobs. - Reduce foreclosures. - Help the unemployed maintain their homes - Achieve this without giving money away (just make less profit). - Maintain house values.
If we cut the price of buying a house in half, we would clean up the inventory of new and foreclosed homes. We can do this without negatively affecting house values.
Cut mortgage rates to 3%.
Banks borrow from the Gov. at 1.25% and then lend to us at 6%. Most of these loans end up back in Fannie or Freddie which are basically owned/backed by the government.
So why can't the Gov. lend to banks directly with the specific purpose of financing mortgages at very low rates (3%) to eliminate the current inventory of homes (new homes and repos). The goal is not to maximize profits but to remove the excess housing inventory and get us back to a position of building new homes and getting people back to work.
If mortgage rates were lowered from 6% to 3%, the monthly cost of financing would be halved and at the same time maintain the value of homes. This would encourage people waiting on the sidelines or renters to finally commit to buying a house.
(a $300,000 mortgage payment would drop from $1500/mo. to $750/mo.---Buy or Rent?)
These 3% mortgages should be primarily used to buy the current inventory of homes (foreclosures, new homes….). It could be extended to other groups if this is not enough to resolve the problem. If the gov. doesn't want to hold these cheap loans for 30 yrs., they could be reviewed after 5 years and raised 50 basis points every year until they approach the market rate.
Who else should get these loans
-The Government could also offer the military (soldiers with tours in Iraq) these 3% mortgages on any home since they do so much for us and get paid so little.
-Unemployed: With one person in household still working. Re-finance at 3% for a year. If both are unemployed, capitalize the cost for a year. Review it after one year or if person becomes employed.

— Philip-744631

Steve,

Enjoy your commentary and perspectives on CNBC.....
Stick to your guns and your overall philosophy during this economic mess...you (and Mark Haynes sp?) are the only two that have a good view of what is going on.....Erin is pretty good too...

I'm 78 and a lifelong student of world, US, and economic history....

This mess is totally different than any past experiences......I think the bailout of Citigroup is a huge mistake......There is no bottom line dollar amount to secure a necessary "consumer" recovery....The past crisis had a "numerical number" that could be visualized and "bought" and paid for but this time I'm afraid that we have "bought the farm!"

Also we seem to be ready to placate those at the top of the heap that should have known better, but the heck with the common folk, "who should have known better."

I also believe that the "big three" auto makers have enough of a run for their money...they have failed for years to be "innovative" and more imaginative along with the UAW. (Qualifier: I am a lifelong union booster and have owned two small business and worked for a major food chain for the latter 31 years of my working life)

Anyway, I wanted to share my thought with you...

Stick to your guns....

Best Regards,

Bert Canepa
Groveland, CA
nonnocanepa@yahoo.com

— sierra-743909

Hi Steve,

You just told Gasparini that nobody knew how extensive these derivitives were. It was always out there. You guys just don't deal with it. The BIS reports on it regularly. I believe it's 1,100+ trillion at the moment. Here's Warren Buffett in 2002.
Warren Buffet on Derivatives:
Following are edited excerpts from the Berkshire Hathaway annual report for 2002.
I view derivatives as time bombs, both for the parties that deal in them and the economic system. Basically these instruments call for money to change hands at some future date, with the amount to be determined by one or more reference items, such as interest rates, stock prices, or currency values. For
example, if you are either long or short an S&P 500 futures contract, you are a party to a very simple derivatives transaction, with your gain or loss derived from movements in the index. Derivatives contracts are of varying duration, running sometimes to 20 or more years, and their value is often tied to several
variables. Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the creditworthiness of the counter-parties to them. But before a contract is settled, the counter-parties record profits and losses – often huge in amount – in their current earnings statements without so much as a penny changing hands. Reported earnings on derivatives are often wildly overstated. That's because today's earnings are in a significant way based on estimates whose inaccuracy may not be exposed for many years.

When Buffett bought General Re, the first thing he did was to spend millions to unwind over 14,000 derivitives embedded in the company.

When Paulson was GS CEO he went before Congress asking for 40-1 leverage and as CEO oversaw GS rolling out hundreds of exotic derivitives. These guys knew exactly what they were doing. LTCM to the nth power.

Citicorp spent $200 million lobbying in one year to get rid of Glass-Steagall.

To paraphase Archimedes, give me enough leverage and I'll move the world. These guys have destroyed it.

Read the following from the author of "Liar's Poker". These people are very callous and kind of amoral.

It seems the links aren't posting

— Kevin Helrich

Steve...you are absolutely right...mortage rates have gone through the roof...i was shocked when I heard Bernanke say that mortgage rates were down today! How could he be so out of touch on such an important matter? Rising mortgage rates are a huge problem, not only for housing and housing recovery but also for the overall economy. While it's true that many homeowners are underwater and can't refinance, there are still many millions who are not and who would greatly benefit if they were able to refinance their mortgages to rates in the low 5's...The extra cash flow that a lower mortgage refinance would provide would be far better and would go alot further in helping the economy than another "fiscal stimulus check" of $300! Consumers might even feel a little more comfortable about opening their wallets a little this coming holiday season! Heck...maybe they would even purchase a new GM or Ford car! And for those who worry that lower mortgage rates caused this mess...not to worry...there is no way that lower mortgage rates will have the same impact because subprime and interest only loans are dead and there has been so much contraction and tightening even in my market (Prime A) that it would be impossible for low rates to over inflate the real estate market at this point....and a little re-inflation of housing may be just what the doctor ordered to stop this delationary cycle! To be sure Steve, lower rates are no panacea...but they sure would help as was the case in the early 90's.

— joyce crowe

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