Applications to British universities are down after the government allowed universities to raise their fees. 

The Telegraph reports:

“The number of British students applying to university has plummeted by almost 44,000 following a sharp rise in tuition fees, according to new figures.”

An official with the universities’ association says:

“The more detailed analysis of application rates for young people takes account of population changes. This shows a fall of just one percentage point in the application rate in England, with little change across the rest of the UK.

“Our analysis shows that decreases in demand are slightly larger in more advantaged groups than in the disadvantaged groups.

“Widely expressed concerns about recent changes in HE funding arrangements having a disproportionate effect on more disadvantaged groups are not borne out by these data.”

In his challenge, issued in a Time Magazine interview last week, Buffett promises to match voluntary contributions aimed at reducing the deficit by “all Republican members of Congress, and I’ll even go three for one with (Senate Minority Leader Mitch) McConnell.”

Unbeknownst to him Rep. Scott Rigell, a Republican representing Virginia, “makes it a practice to donate 15 percent of his Congressional salary ‘to pay down the debt.’ That amounted to $23,103.33 in 2011 and about $26,100 in 2012.” So Warren Buffett, who made $62,855,038 in 2010 the last year for which the data is available,  will be writing a check made out to the United States Treasury for 0.00078% of his 2010 income.

What happened to the “match voluntary contributions”? Oh don’t be silly, he is matching the dollar amount, not the percentage amount. Just remember the drill, as a Democrat when proposing higher taxes you compare the percent amount between different tax brackets but when you have to pay up you compare the dollar amount.

No word  on when Buffett will send a cheque for the remaining $9,379,052.37, so that he can match Rep. Rigell’s contribution. No word either if Warren Buffet’s Berkshire Hathway, which owes just over $1 billion in taxes going back to 2002, has decided to help out in reducing the deficit by paying up.

Rating agency Fitch said on Tuesday that Greece would default on its debt, although it said that such a default was likely to take place in an orderly manner. “It is going to happen. Greece is insolvent so it will default,” Edward Parker, Managing Director for Fitch’s Sovereign and Supranational Group in Europe, the Middle East and Africa told Reuters on the sidelines of a conference in the Swedish capital. “So in that sense it shouldn’t be a surprise to anyone.”

Just because it isn’t a surprise doesn’t mean it will be orderly. Greek government and the general public are completely unprepared for default. A default, and the possible ejection from EU, will lead to a dramatic decrease in handouts to the Greeks and that is just for starters. Are there provisions at the moment for an alternative currency? How do they propose to borrow money to fund the economy when they have just defaulted? With recent public sector riots how do they propose to handle elimination of substantial number of public sector employees?

Perhaps Fitch is invoking the historical accomplishments of Xenophon, the Athenian warrior, who led one of the most famous retreats consisting of a five-month anabasis (upcountry march) to reach safety. But in the case of Greek default, this  “upcountry march” will be replaced by “up yours” to the creditors, as they will be forced to write-off substantial portion of the debt.

Papademos said that if Greece did not receive 100 percent participation in a program in which bondholders would voluntarily write down $130 billion from Greece’s $450 billion debt, the country would consider passing a law to require the holdouts to take losses.

Perhaps the creditors can use the “voluntary” write down as a credit toward renting some ancient Greek sites.

According to a ministerial briefing dating from the end of December, a commercial firm could rent the Acropolis for a professional photographic shoot for as little as 1,600 euros a day ($2,046). Demonstrators could also rent the ancient landmark.

Just days before Christmas, the Obama administration gave Bank of
America a big lump of coal, levying a hefty $335 million dollar fine
on the company for discriminating against minorities in its lending
practices.

Supposedly Countrywide, a mortgage company bought by Bank of America in
2008, had not given out enough low interest rate loans to minorities
from 2004 to 2008.

Forget About Italy and Greece, Spain Next on Agenda

Spain has come to the forefront of the European markets agenda again this week as yields on its debt soared and it prepared for a new government.

“In a lot of ways it’s more worrisome than Italy,” Megan Greene, senior research analyst at Roubini Global Economics, told CNBC.com.

Well this is old hat as the bond vigilantes have utilized the flanking maneuver to go for France with Spain relegated for mop-up later. A few days ago FT reported as follows.

Bond vigilantes gun for France’s triple A

Fresh from claiming Silvio Berlusconi’s cosmetically enhanced scalp, and with Spanish yields firmly back above the painful 6 per cent threshold ahead of elections on Sunday, bond vigilantes are gunning for France’s prized triple A rating.

What caused this to happen? If you take a look at the graph, you see three periods in which the income of the top 1% took off. The starting date for these three periods is 1982, 1994 and 2002. Is it a coincidence that these periods coincide with significant changes in technology? 1982 was the start of personal computer revolution, 1994 was the start of Internet I, the first step in connecting computers together and launch of the Web, and 2002 coincided with Internet II, start of social networking and other internet application build on top of the infrastructure created in Internet I. Is it just the case that the top 1% consists of group that assiduously adopted new technology?

It does seem to be the case as the periods of accelerated income disparity coincide very well with periods of accelerated technological displacement. Surely there are other factors, such as globalization which has narrowed the gap between blue collar workers in first world and third world and led to lagging income for lowest quintile during the 80s as their income fell below the 1979 level, but the above seems to be a compelling explanation of the surge in income of top 1% with three different presidencies, Reagan, Clinton and Bush II, but one common theme.

“Chancellor Angela Merkel warned last week that euro failure threatens a thousand plagues. “No one should think that another half-century of peace and prosperity is assured”

“She has the matter backwards. The euro itself is has become an engine of destruction and bitter cross-border rancour.

“Europe will not be whole and happy again until the currency is broken into workable parts, and this misguided experiment is shut down for ever.”

And in the same paper, Ian Cowie reports that there are more Porsches in Greece than there are Greeks declaring 50,000 Euro incomes. In fact it is worse.

“Something can’t be right when the modest city of Larisa, capital of the agricultural region of Thessaly with 250,000 inhabitants, has more Porsches per head of the population than New York or London.”

Perhaps the penny – or the euro – is already dropping, because Professor Polemarchakis writes that Larissa “is the talk of the town in Stuttgart, the cradle of the German automobile industry, and, particularly, in the Porsche headquarters there”, since it “tops the list, world-wide, for the per-capita ownership of Porsche Cayennes”.

“The proliferation of Cayennes is a curiosity, given that farming is not a flourishing sector in Greece, where agricultural output generates a mere 3.2pc of Gross National Product (GNP) in 2009 – down from 6.65pc in 2000 – and transfers and subsidies from the European Commission provide roughly half of the nation’s agricultural income.

“A couple of years ago, there were more Cayennes circulating in Greece than individuals who declared and paid taxes on an annual income of more than 50,000 euros.”

Senate Democrats are rewriting portions of President Barack Obama’s jobs bill to include a new 5 percent tax on income above $1 million — a proposal that is sure to be blocked by Republicans.

Under Reid’s plan, the millionaire’s tax would cover the entire cost of Obama’s jobs bill — about $450 billion over the next decade. It also would take effect Jan. 1, 2012.

IRS data on tax returns of millionaires for 2009, the latest year for which statistics are available:

And, the data show, the 235,413 taxpayers who reported earning seven digits or more in 2009 took in a total of $726.9 billion — yet 1,470 paid not a penny of income taxes. In 2007, 959 Americans earning $1 million or more paid no income taxes.

If the millionaire are taxed at 5% on their income of $726.9billion it will generate $36.345 billion per year or $363.45 billion over the next decade which is 80.8% of the required amount. Perhaps Reid is looking for economic growth to increase the income of millionaire but wasn’t the goal to reduce their income, thus achieving higher levels of equality?

“Very rarely in political history has any faction or movement enjoyed such a complete and crushing victory as the Conservative Eurosceptics. The field is theirs. They were not merely right about the single currency, the greatest economic issue of our age — they were right for the right reasons. They foresaw with lucid, prophetic accuracy exactly how and why the euro would bring with it financial devastation and social collapse.”

“Now let’s turn to the BBC. In our Centre for Policy Studies pamphlet, Guilty Men, we expose in detail how the BBC betrayed its charter commitment, lost its sense of fair-mindedness and became in effect a partisan player in a great national debate — all the more insidious because of its pretence at neutrality.”

Sound familiar?

‘The defenders of sterling are, in the main, a group of elderly men with more stake in their past than in our future. They clothe their gut anti-Europeanism and Little Englandism in the language of rational economic argument.’

“Clothing your ______________ (racism, sexism, anything we don’t like) in the language of rational argument.”

Is that not the the essence of all leftist argumentation? Your soul is wrong, so we can ignore your rational argument.

Well worth the time to read.

US deficit (2010): $1.42 trillion

Source: http://www.dailyfinance.com/2010/10/15/federal-budget-deficit-below-expectations/

U.S. Motor Gasoline Consumption (2010): 9,034,000 barrels/day (378 million gallons/day)

Source: http://www.eia.gov/energyexplained/index.cfm?page=oil_home#tab2

Additional revenue from 10cent/gallon tax: 378,000,000 gallons/day * $0.10 = $37.8 million/day which equates to $13.397 billion/yr.

In sum the 10-cent/gallon tax will pay 0.94% of the federal deficit which is a far cry from “wipe out [of] the federal deficit”. Using just gasoline tax to wipe out the deficit will require gasoline tax to increase by $10.29/gallon, which highlights the extent of problem faced by US in balancing the budget.

According to Berkshire Hathaway’s own annual report — see Note 15 on pp. 54-56 — the company has been in a years-long dispute over its federal tax bills.According to the report, “We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (‘IRS’) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “The company has been short-changing the tax collection agency for much of the past decade.   Mr. Buffett’s company has not fully settled its tax bills from 2002-2009.  Yet he says he’d happily pay more.  Except the IRS has apparently been asking him to pay more going on nine years.”

Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch.  Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.

McCarty explained, “The rough translation of the report is that Berkshire Hathaway did not pay all the federal taxes that it was required to for 2002 through 2004.  The IRS examination team caught Berkshire Hathaway on at least some issues.  Instead of paying up, Berkshire Hathaway is threatening the IRS with protracted litigation and is in the process of cutting a deal with the IRS Appeals office.”

He continued, “For 2005 and 2006, Berkshire Hathaway again did not pay all the federal taxes that it was required to.  Again, the IRS examination team caught Berkshire Hathaway on at least some issues. Now, Berkshire Hathaway is again threatening the IRS with protracted litigation and is trying to cut a deal with the IRS Appeals office.”

McCarty concluded, “And, finally, the IRS has opened another examination of Berkshire Hathaway’s tax returns for 2007 through 2009, but has not officially sent Berkshire Hathaway the bill yet for taxes that Berkshire Hathaway failed to pay for those years.  One would expect they will find yet more issues.”

From Italy.

As stock and bond markets across the world tumbled on fears about Italy and Spain, it emerged that police acting on orders from prosecutors had raided the Milan offices of rating agencies Moody’s and Standard & Poor’s as part of continuing investigations into their role in the recent financial turmoil.

From US

The Justice Department is investigating whether the Standard & Poor’s credit ratings agency improperly rated dozens of mortgage securities in the years leading up to the financial crisis, The New York Times reported Wednesday.

From US

Deven Sharma is stepping down as president of Standard & Poor’s only weeks after the rating agency issued an unprecedented downgrade of the credit of the US, the company said.

Of course there are places where the rating agencies can downgrade sovereign debt without threats, but they are outside the reach of politicians from debt incurring nations.

China’s Dagong Global has cut the credit rating on U.S. sovereign debt to A from A+, Chen Jialin, general manager of the international department at the firm told CNBC on Wednesday. The agency has also put the U.S. on negative outlook.

The administration may also merge the Department of Commerce, the Office of the United States Trade Representative and some economic divisions at the State Department into a new agency, administration officials said. Possible names include the Department of Jobs or the Department of Competitiveness.

At least it follows the convention of naming a department after the objective it can never fulfill.

1600 Pennsylvania Avenue is in even more desperate need of adult supervision.

Update (by Glendronach)

A sampling of reactions via Instapundit.

In what could be a repeat of the easy-lending cycle that led to the housing crisis, the Justice Department has asked several banks to relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination, according to court documents reviewed by IBD.

Prosecutions have already generated more than $20 million in loan set-asides and other subsidies from banks that have settled out of court rather than battle the federal government and risk being branded racist. An additional 60 banks are under investigation, a DOJ spokeswoman says.