By James Freeman - The Wall Street Journal
Convicted fraudster John Beale did more than just steal from taxpayers. Plus are rich people expecting low inflation?
CONVICTED CON MAN LED CREATION OF POLLUTION REGS
In his ongoing investigation of fake EPA spy John Beale Sen. David Vitter (R. La.) is increasingly focused on Beales role in leading a 1997 rewrite of federal rules on air quality. Beale not only forced a quick conclusion based on questionable data. He also pressured the Clinton Administrations Office of Management and Budget to stop criticizing the new rules known as the National Ambient Air Quality Standards (NAAQS) for Ozone and Particulate Matter.
In a draft report Sen. Vitter also places the Beale rules in context: Since the 1997 standards were issued EPA has steadfastly refused to facilitate independent analysis of the studies upon which the benefits claimed were based. While this is alarming in and of its self this report also reveals that the EPA has continued to rely upon the secret science within the same two studies to justify the vast majority of all Clean Air Act regulations issued to this day. In manipulating the scientific process Beale effectively closed the door to open scientific enquiry a practice the Agency has followed ever since.
HOW FAR WILL PUTIN GO?
A
Journal editorial notes that Vladimir Putin consolidated his hold on Crimea Sunday by forcing a referendum with only two choices. Residents of the Ukrainian region could vote either to join Russia immediately or to do so eventually. The result was a foregone conclusion midwifed by Russian troops and anti-Ukraine propaganda.
Next up for conquest may be eastern Ukraine adds the editorial. Russian troops on Saturday crossed from Crimea and occupied a natural gas plant on the Ukrainian mainland. Scuffles and demonstrations in the eastern Ukrainian cities of Donetsk and Kharkiv egged on by Russian agitators could create another trumped up pretext in the words of John Kerry.
ARE RICH PEOPLE BETTING ON LOW INFLATION?
Perhaps they are simply betting on another housing boom that will allow them to flip homes financed with increasingly popular adjustable-rate mortgages (ARMs).
The Journal reports that ARMs one of the main culprits of the housing crisis are back in vogue. But banks say this time is different.
The loans offer low initial rates which can rise later. And the Journal says that some ARMs are cheaper when compared with fixed-rate mortgages than they have been in more than a decade...The tactics are reminiscent of the period before the 2008 crisis when ARMs exploded in popularity as banks and mortgage brokers touted their low initial rates to consumers. Now though financial executives say they are focusing on borrowers with strong credit who are using the loans to take out large jumbo mortgagesand not so-called subprime borrowers who used the loans to stretch their buying power as far as it could go.
The Journal adds that ARMs comprised 31 of mortgages in the $417001-to-$1 million range that were originated during the fourth quarter of 2013...up from 22 a year earlier and the largest proportion since the third quarter of 2008.
MAYBE THIS TIME WILL BE DIFFERENT
Bipartisan leaders on the Senate Banking Committee unveiled their draft bill to dismantle Fannie Mae and Freddie Mac while maintaining a federal role in insuring the mortgage market. Mortgage guarantors would be required to maintain a 10 capital buffer against losses and to have that capital extinguished before the federal insurance would be triggered
reports the Journal.
BUSINESS OPTIMISM RISES
Less policy uncertainty from Washington and better analytical tools to forecast demand are
giving business leaders more confidence about future growth. Overall policy uncertainty has dropped down to normal levels and this is a key factor helping to restart growth in the U.S. and Europe according to Nicholas Bloom a Stanford economist and creator of an uncertainty index.
BUT BUSINESS LEADERS WONT BE HAPPY TO READ THIS
In a
Journal op-ed today Edward Lazear says the latest government jobs report shows employment is falling. The hidden rot is a decline in hours worked.
FALLING EMPLOYMENT ISNT THE ONLY REMINDER OF THE 1970s
The University of Virginias mens basketball team
won the ACC tournament Sunday for the first time in 38 years.
This report is available every day at wsj.com/morning.
