‘2023 Was A Miraculous Year’

Nobel laureate Paul Krugman on Friday took exception to comments made by Republican presidential primary candidate Nikki Haley.

Haley offered a bleak take on the economy in a campaign speech in her home state of South Carolina on Wednesday. Criticizing her GOP rival Donald Trump for throwing a temper tantrum, Haley said, “He [Trump] didn’t talk about the American people once he talked about revenge. He didn’t talk about the fact that we’ve got an economy in shambles and an inflation that’s run out of control.”

Sharing excerpts of Haley’s comments from OK Magazine on X, Krugman said the economy grew 3% and core inflation was back at 2%. Haley repeated those claims on her Meet the Press interview on the Sunday January 28 program.

Krugman also said the six-month annualized rate of the core price consumption expenditure index should be considered as a more accurate inflation measure than the core annual inflation rate.

“Using annual core CPI puts you way behind the curve, for 2 reasons. First, annual: even core CPI was 4.6 in the first half of 2023, 3.2 in the second half. Second, known lags in official shelter prices lagging far behind market rents,” he said.

“So annual CPI creates a spurious impression of stubborn inflation, with a difficult last mile to cover.”

He observed that shelter receives a lower weight in the calculation of price consumption expenditure.

“The inflation battle is over. Now we need to worry that lagged effects of rate hikes will tip us into an unnecessary recession,” the economist said.

Do You Own an Offshore Bank Account?

I know that few of you do. One person that does is the Republican candidate for president, Mitt Romney. Just Google the above question and you will obtain quite a few responses. Google, “Romney’s secret offshore bank accounts.” You will see articles posted by Vanity Fair, Huffington Post, and the NY Daily News. I know what you are thinking. Those are all Liberal news companies. You would be wrong. The NY Daily News is owned by one wealthy businessman, Mort Zuckerman. The same Mort Zuckerman who also owns U.S. News & World Report. The same Mort Zuckerman who has been appearing as a guest on many political talk shows and slamming Barack Obama.

This is the New York Daily News report.

Mitt Romney’s massive fortune – estimated to be as high as $250 million – is held in a complex and opaque network of offshore havens that are impossible to penetrate, according to a report in Vanity Fair.

By Kristen A. Lee / NEW YORK DAILY NEWS

Mitt Romney’s massive fortune – estimated to be as high as $250 million – is held in a complex and opaque network of offshore havens that are impossible to penetrate, according to a report in Vanity Fair.

Romney had a Swiss bank account and has interests in tax havens like Bermuda and the Cayman Islands. The Romney campaign has insisted he does not use the havens to avoid paying U.S. taxes, but Vanity Fair wrote it is impossible to confirm that he is not seeing a savings.

The Republican candidate paid a 14 percent tax rate on $21.7 million in income in 2010 – far lower than the rate paid by many Americans because his earnings comes from investments rather than wages.

Vanity Fair noted that Romney has continued to receive large payments from Bain Capital since leaving the private equity firm in 1999.

Romney has personal interests in at least a dozen of the 138 or more funds organized by Bain in the Cayman Islands. Vanity Fair said the Romney-related funds are worth as much as $30 million and hidden behind confidentiality disclaimers.

The report also raised questions about Romney’s blind trusts, which are used by politicians to remove conflicts of interests by turning investment control over to an independent trustee.

Romney’s financial disclosure form lists 25 such investments in an open-ended category labeled “over $1 million,” Vanity Fair reported. Many of them are set up in tax havens like the Cayman Islands.

Meanwhile, the Romney campaign is distancing itself from the CEO of Barclays, who stepped down from the British bank Tuesday amid an interest-rate fixing scandal.

Robert Diamond will no longer co-host a London fundraiser scheduled for July 27 when Romney will be in town for the Olympics.

“Mr. Diamond decided to step aside as a co-host for the upcoming London reception to focus all his attention on Barclays,” Romney spokeswoman Andrea Saul told The Financial Times. “We respect his decision.” The fundraiser will go on without the former CEO.

Barclays was fined $453 million last week by U.S. and British regulators for submitting false reports on interbank borrowing rates between 2005 and 2009.

Facebook Folly

How many website do you subscribe to?

The say 800 million people have Facebook accounts. Those accounts are free. I am one of those subscribers and most likely so are you. I have never purchased anything as a result of having that account. I only go onto the account when I am bombarded by e-mail messages telling me that I have messages that require my response. Usually the messages are from people I do not know but want to be my friend. These are people who “maybe” did meet me somewhere but I can’t remember where and their faces are not familiar to me.

I must agree with Betty White when she presented her monologue on SNL. “I really have to thank Facebook … I didn’t know what Facebook was, and now that I do know what it is, I have to say, it sounds like a huge waste of time. I would never say the people on it are losers, but that’s only because I’m polite. People say ‘But Betty, Facebook is a great way to connect with old friends.’ Well at my age, if I wanna connect with old friends, I need a Ouija Board. Needless to say, we didn’t have Facebook when I was growing up. We had phonebook, but you wouldn’t waste an afternoon with it.”

Betty White Monologue

Apparently Mark Zuckerberg convinced himself and millions of others that his free social media site could be a marketing tool. Betty White is correct. He is trying to sell access to the telephone book.

Buy a share of Facebook? Why? How many people will reach their purchasing decision based upon the things they see on that site. Facebook’s number three advertiser, General Motors, has discontinued their advertising on the site.

Citigroup Stock Holders had Their Say

At Citigroup’s annual meeting, owners of the stock voted 55 to 45 against a $50 million executive pay package, including $15 million for CEO Vikram Pandit.

This is all thanks to the Dodd-Frank financial overhaul law.

Buried in its 2,300 pages is a requirement for public companies to hold “say on pay” votes for executive compensation.

Unfortunately the vote is non-binding (Democrats wanted it to be binding), but the chairman of Citigroup Dick Parsons said he took it seriously, and promised the board would consider it carefully.

Shareholders have every right to be upset with Vikram.

Over the last decade, Citigroup has had the worst stock price performance of the big banks, but consistently had some of the highest executive compensation.

Citi shares are down more than 80% since the financial crisis hit.
They’re down 93% from 2006.

Last year, Pandit got a $1.7 million salary, plus a $5.3 million cash bonus, and he got a $40 million retention package that pays out through 2015.

Getting a bonus should be a piece of cake for these execs, too, since the standard for the payout is an earnings track record half of what it was in 2009 and 2010 when the economy was in the tank.

Whoa! Don’t get too ambitious!

Look, to be fair to Pandit, for 2009 and 2010, he accepted just a buck in salary.

But to be fair to shareholders, Citi’s quarterly dividend is one penny.
Citigroup has announced its first-quarter profit had fallen two percent from a year earlier on a paltry one percent rise in revenue.

The Federal Reserve turned the company down on its request for a share buyback or dividend after Citi flunked the central bank’s stress test in March. And don’t forget the bank was one of many bailed out during the financial crisis.

Some people bridle at anyone earning millions of dollars a year. I am one of them.

If you can grow sales, boost the bottom line, raise the share price, then by all means you’ve earned a fat paycheck.

But what we can’t do is reward mediocrity and failure.

Last year shareholders voted down just two percent of executive pay plans. Maybe this is the start of a new trend.