WHY HOUSE REBOOBLICANS AREN'T SWEATING THE SHUTDOWN AND WHAT ELSE IS NEWS

WALL ST JOURNAL MARKET WATCH

The public fingers Republicans for most of the blame over the government shutdown, but that doesn’t mean the GOP faces grave danger of losing power in the House come the 2014 midterm elections.
Two articles, one from the left-leaning New Republic and another from the right-leaning Weekly Standard, see slim to no chance that Democrats will capture the House in 2014. And by some accounts, Republicans face not-insurmountable odds of taking control of the Senate.
Can it really be possible? The latest Washington Post poll, for example, shows that 70% of Americans disapprove of Republican tactics in the budget impasse.

Yet as both the New Republic and Standard articles point out, Democrats face a number of tall hurdles to winning the House. First and foremost, they haven’t recruited enough good candidates to challenge the most susceptible Republicans, most of whom are entrenched incumbents with moderate voting records.
Americans also have notoriously short political memories. So the fiscal fights of 2013 are likely to have faded in the minds of most persuadable voters by November 2014 — unless the more dangerous stalemate over the debt ceiling triggers an economic calamity.
Consider what happened in 1996. Voters only threw out three Republican House members just a mere nine months after an extended government shutdown for which conservatives were widely blamed. The GOP even won two Senate seats to extend its majority in that chamber.



Another hurdle for Democrats is the once-a-decade redistricting process that took place in 2010. Republicans controlled more state governments than Democrats and they used their influence to solidify the GOP’s grip on the party’s more vulnerable districts. That helps explain why Republicans only lost eight seats in 2012 even though Democrats won 1.7 million more votes nationwide in congressional races.
By far the biggest obstacle is history: mid-term elections heavily favor the party not in the White House. The opposition party has picked up seats in 24 of the 28 midterm elections since 1900, in many cases making big gains. Read Stuart Rothenberg on why the House is not in play right now.
More crucially, the president’s party has never won control of the House after being in the minority ahead of the midterms. [Both of the above links are must-reads--Esco]

Put another way, Democrats are trying to do what’s never been done before. They need to win 17 seats to oust Republicans, but even in the four midterms when the president’s own party did well, the gains ranged from just five to 11 seats.
To make history in the midterms, Democrats probably have to emerge from the latest budget standoff smelling like roses. Yet the Washington Post poll also offers a warning to the White House and its allies.  A slight majority of Americans also disapprove of President Obama’s performance, while 61% disapprove of how Democrats in Congress are handling the dispute.
– Jeffry Bartash


What Else is New?


Amidst the chaos of a closed government, here comes another nomination process. President Obama is preparing to announce Janet Yellen as his pick to lead the Federal Reserve as soon as Wednesday. -



The off-duty undercover New York City police officer who rode with the biker gang that attacked a family in their Range Rover last month was arrested. Though he told investigators that he left the scene as soon as riders began attacking the vehicle, video of the incident showed the detective pounding his fists on the back of the vehicle. His arrest will mean automatic suspension from the Police Department. Four other men have been charged and police are actively searching for others.


One week after HealthCare.gov went live, the world hasn’t ended—but the website still has glitches. The White House insisted that it is working hard to fix the site where Americans can sign up for new coverage under the Affordable Care Act. The site has had an estimated 8.6 million unique visitors in the past week. But IT specialists told Reuters that the glitches could also be linked to flaws in the site’s architecture. White House spokesman Jay Carney insisted that although they are “increasingly moving more users through the system,” they are still “not satisfied with the performance.”

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Imagine a field of snow. A skier finds little resistance and glides easily across the snow.



A woman shuffles by on snowshoes and is slowed by the snow.




And a man in heavy boots plods along, slowed at every step.




While a bird flies over, untouched.




The Higgs field is like our field of snow.


Fan favorites win the Nobel. Britain’s Peter Higgs and Belgium’s François Englert won the Nobel Prize in Physics for predicting the existence of the Higgs boson, the so-called God particle that explains why elementary matter has mass. In a statement, the Royal Swedish Academy of Sciences gave credit for Higgs and Englert for discovering the particle that “describes how the world is constructed.”
The theory, elucidated in 1964, sent physicists on a generation-long search for a telltale particle known as the Higgs boson, popularly known (though not among physicists) as the God particle. The chase culminated last year with the discovery of this particle, which confers mass on other particles, at the Large Hadron Collider at CERN, in Switzerland. Dr. Higgs and Dr. Englert will split a prize of $1.2 million, to be awarded in Stockholm on Dec. 10.

The finding affirms a grand view of a universe described by simple and elegant and symmetrical laws — but one in which everything interesting, like ourselves, results from flaws or breaks in that symmetry.

According to the Standard Model, the Higgs boson is the only manifestation of an invisible force field, a cosmic molasses that permeates space and imbues elementary particles with mass. Particles wading through the field gain heft the way a bill going through Congress attracts riders and amendments, becoming ever more ponderous.

Without the Higgs field, as it is known, or something like it, all elementary forms of matter would zoom around at the speed of light, flowing through our hands like moonlight. There would be neither atoms nor life.

In Surprise, Fed Decides Not to Curtail Stimulus Effort. DOW Rises 147pts.

Ben S. Bernanke--[We can be heroes, if just for one day--Esco]


N.Y. TIMES

It turns out that the Federal Reserve is not quite ready to let go of its extra efforts to help the economy grow.

In a reversal that stunned economists and investors on Wall Street, the Fed said on Wednesday that it would postpone any retreat from its monetary stimulus campaign for at least another month and quite possibly until next year. The Fed’s chairman, Ben S. Bernanke, emphasized that economic conditions were improving. But he said that the Fed still feared a turn for the worse.

He noted that Congressional Republicans and the White House were hurtling toward an impasse over government spending. That was reinforced on Wednesday, when House leaders said they would seek to pass a federal budget stripping all financing for President Obama’s signature health care law, increasing the chances of a government shutdown.

And the Fed undermined its own efforts when it declared in June that it intended to begin a retreat by the end of the year, causing investors to immediately begin to demand higher interest rates on mortgage loans and other financial products, a trend that the Fed said Wednesday was threatening to slow the economy.

“We have been overoptimistic,” Mr. Bernanke said at a news conference Wednesday. The Fed, he said, is “avoiding a tightening until we can be comfortable that the economy is in fact growing the way that we want it to be growing.”

 

Investors cheered the Fed’s hesitation. The Standard & Poor’s 500 stock-index rose 1.22 percent, to close at a record high, in nominal terms. Interest rates also fell; the yield on the benchmark 10-year Treasury reversed some of its recent rise.

SUMMERS WITHDRAWS; PUSH FOR YELLEN TO LEAD FED RESERVE GATHERS STEAM.

N.Y. TIMES

With as many as five Democrats on the Senate Banking Committee ready to vote “no” on Lawrence H. Summers for the position of chairman of the Federal Reserve, the White House’s favored candidate faced long odds in winning Senate confirmation. On Sunday, Mr. Summers pulled out of contention, citing a potentially “acrimonious” battle that could harm the economy and Mr. Obama’s presidency.

In its search for a new Fed chairman, the White House had for months centered on Mr. Summers, who smarted after being passed over for the position when Mr. Obama decided four years ago to name Ben S. Bernanke to a second term as chairman. This time, with Mr. Obama determined to replace Mr. Bernanke after eight years in office, the administration considered Mr. Summers, who worked intimately with them during the financial crisis, by far the best candidate. Mr. Summers, a former Treasury secretary to President Clinton was Mr. Obama’s chief White House economic adviser through the height of the financial crisis and recession in 2009 and 2010. In those years he formed a bond with Mr. Obama and others in the White House despite a tendency toward arrogance.

But a number of Senate Democrats, rather than waiting for the nomination process to play itself out, raised concerns as soon as his name surfaced this summer: his reputation for being a divisive and abrasive colleague, his perceived role in coddling Wall Street and the lax regulation of derivatives, and complaints that he did not support smaller community banks as much as the nation’s giant financial institutions, among other issues.

The Senate Banking Committee consists of 12 Democrats and 10 Republicans. Every Democrat in the no column would have to be balanced with a yes vote from a Republican to win the support of the committee. By Mr. Merkley’s count, Mr. Summers might have needed as many as five Republican votes.




Ms. Janet Yellen, the Fed’s vice chairwoman, told friends in recent weeks that she did not expect to be nominated as the next chairman of the Federal Reserve. Although she had been the Fed’s vice chairman since 2010 and would make history as the first woman to hold the job, President Obama’s aides made clear throughout the summer that he wanted Lawrence H. Summers, his former chief economic adviser. Now, she has again become the presumptive front-runner, as she had been for much of the spring. Senate Democrats, for their part, have made their thoughts on her known. Despite lukewarm Republican support, she would almost certainly sail out of committee and clear a full Senate confirmation vote, too.

Supporters of Mr. Summers, including many of the president’s closest advisers, had raised some concerns about Ms. Yellen in recent months. Perhaps most potently, they said that institutions benefited from fresh leadership and argued that Ms. Yellen’s crucial role in creating the Fed’s current policies could inhibit her ability to make necessary changes.

Some presidential advisers also argued that Mr. Summers brought crisis management experience and a working knowledge of financial markets that Ms. Yellen lacks — although so did Ben S. Bernanke when President George W. Bush selected him as chairman.

 

Nonetheless, the president’s advisers insisted throughout the summer that Mr. Obama was not averse to Ms. Yellen but simply more comfortable with Mr. Summers. Administration officials and supporters acknowledged that the president would enrage his party’s base if he were now to reject Ms. Yellen and forfeit the chance to name the first woman to the most influential economic job in the world.She has long argued that markets benefit from regulation to prevent abuses and limit disruptions of economic growth. She also played a leading role in shaping what has become the conventional wisdom that central banks, for the sake of job growth, should seek to moderate rather than eliminate inflation.

 

Most important, she has led a committee devoted to improving the Fed’s communications with its primary audience, investors, and with the broader public, a goal she shared with Mr. Bernanke. Under Ms. Yellen, the committee built an internal consensus for changes, including Mr. Bernanke’s regular news conferences and the declaration that the Fed thinks 2 percent annual inflation is just right.

DOW DROPS 560 pts IN 2 DAYS. THANKS BEN.

THE GUARDIAN

US stock markets slump after Bernanke drops hint on ending stimulus

US stock markets plummeted Thursday amid fears that the Federal Reserve was preparing to scale back its $85bn-a-month stimulus program.
The Dow closed down 353.95 points at 14758.24, a 2.34% drop and the index's worst fall so far this year. The Dow closed down 206 points Wednesday.
The selloff follows a press conference on Wednesday at which Fed chairman Ben Bernanke gave his clearest indication yet that he intends to ease off on the so-called quantitative easing (QE) stimulus program.

Stock markets reacted badly to the news even as Bernanke made clear that the US economy is improving, and that he had no immediate plans to change tack. Bernanke said he would only cut back QE if and when US unemployment falls to 7%. It is currently at 7.6%.