Tales from the Trail

Washington Extra – Easy money

Some great news for all you borrowers today from the Fed. Interest rates are likely to remain around zero until at least late 2014. That’s later than previously expected, and to put things in perspective, it’s nearly two years into the term of the president who will be elected in November.

What it tells us is that the economy is still very vulnerable. Ben Bernanke said as much today: “I don’t think we’re ready to declare that we’ve entered a new, stronger phase at this point.” He left the door wide open to further Fed stimulus via bond purchases.

And Bernanke was almost apologetic about what this interest rate outlook means for another large swathe of the population: the savers. Take Maggie Smith, not the actress but a 74-year-old from New Jersey who watches her interest income on savings stagnate while home and car costs go up. After more than five years of rock-bottom rates, it’s no wonder she feels like she’s “being punished” for being prudent.

Here are our top stories from Washington…

Bernanke says Fed pondering further stimulus

Federal Reserve Chairman Ben Bernanke signaled the U.S. central bank may consider further monetary easing, after the central bank announced interest rates would remain near zero until late 2014. Bernanke also suggested the Fed might be willing to tolerate inflation above its newly unveiled official target of 2 percent if it means putting a dent in high unemployment.

For more of this story by Pedro da Costa and Mark Felsenthal, read here.

For a snap analysis by Mark Felsenthal, read here.

Insight: Today it pays to owe money, while U.S. savers suffer

Sometimes Maggie Smith worries that she may outlive her savings.”It’s an uncomfortable feeling to realize that everything is going up except your income,” said the 74-year-old from New Jersey. Rising home and car insurance costs forced her to dip into savings which have been earning less than 1.0 percent. That isn’t likely to change for some years. The Federal Reserve said it is likely to keep its key interest rate near zero until late 2014.

Washington Extra – Timed release

Right before Mitt Romney and Newt Gingrich tangle in tonight’s debate, we are supposed to get details of Gingrich’s work for troubled mortgage giant Freddie Mac from his former consulting firm.

The disclosure could shed light on what work Gingrich did in exchange for $ 1.6 million in consulting fees. What it for his historical acumen, as he has claimed, or his influence in Washington, as rivals for the Republican presidential nomination charge?

It could be interesting fodder for the debate if it comes out by 9 pm EST. Or it might just disappear in the heavy news flowing from the debate, which suggests the former consulting firm is doing Gingrich a favor by coming out at this strategic time.

Romney presses Gingrich on Freddie Mac fees

Mitt Romney’s presidential campaign is turning the tables on Newt Gingrich, putting the squeeze on the former House Speaker to disclose details of his financial relationship with Freddie Mac.

The Romney camp scheduled a conference call Monday morning to talk to reporters about Gingrich’s work as a “historian” (quote marks supplied by the campaign) for the government-owned mortgage finance giant.

Romney campaign surrogates former Minnesota Governor Tim Pawlenty and Will Weatherford, Speaker Designate of the Florida House of Representatives, will be on the conference call — with the call code name “Definitely Not a Lobbyist.”

Gingrich rejects “open marriage” question, blames media

Republican presidential candidate Newt Gingrich got the Republican candidates debate in Charleston off to a lively start Thursday night with an angry denial of charges a former wife made in an interview that came two days before the South Carolina primary.

Here’s an excerpt from the debate on CNN:



Ex-wife Marianne Gingrich accused the former House Speaker of week of asking her
for an “open marriage” when he was having an affair.

Here’s an excerpt from her interview with ABC’s “Nightline.”

Washington Extra – Home alone

When it comes to fixing the housing market in this election year, it’s a battle between the “ineffective” and the “do-nothing.”

President Obama’s relief measures for homeowners facing foreclosure have fallen far short of objectives. Republican candidates, meanwhile, prefer to let the marketplace work its magic. Prices will then hit bottom and begin to recover.

The hands-off approach might not cause too much damage to Republicans in South Carolina. But when the race moves to foreclosure-heavy states such as Florida and Nevada, Republican candidates could find themselves having to explain why they don’t want to help any homeowners.

Gingrich camp heads off ex-wife interview

The Gingrich campaign launched a preemptive strike  as news spread that ABC plans to broadcast a potentially damaging interview with Newt Gingrich’s second ex-wife  on  Thursday –  just two days before Saturday’s crucial South Carolina primary.

Gingrich’s daughters (from his first marriage) Kathy Lubbers and Jackie Cushman came to their father’s defense in a letter released by his presidential campaign.

“The failure of a marriage is a terrible and emotional experience for everyone involved. Anyone who has had that experience understands it is a personal tragedy filled with regrets, and sometimes differing memories of events,” the daughters said in the letter addressed to ABC News Leadership.

Newt Super PAC imagines Romney-Obama debate

A Pro-Newt Super PAC posted an animated version of how a general debate between President Barack Obama and Mitt Romney as the Republican nominee would look.

The video titled “Obama’s Dream Debate” shows a cartoon Obama, voiced remarkably well, not only trouncing Romney in a debate but pointing out just how much the two have in common.

Winning Our Future is the same PAC that made a short campaign film attacking Romney as a “corporate raider” while head of Bain Capital, an ad Gingrich eventually asked to be pulled because of inaccuracies.

Washington Extra – The Keystone cudgel

President Obama had until the end of February to make a decision on the Keystone oil sands pipeline, but he made his move today. And, predictably, he rejected the $7 billion project. That keeps him in good standing with his environmental base for November 2012 but creates new tensions with his Republican foes.

Republicans had forced Obama to make a decision in 60 days as part of the deal for the two-month payroll tax cut extension. House Speaker John Boehner quickly reacted to the rejection by saying “all options are on the table” to craft a bill to fight for the pipeline.

But Boehner may not have many options. If the Republicans push for a bill to get approval for Keystone, the president can veto it. If they choose to make it a bargaining chip in talks for a full-year extension of the payroll tax cuts, they will likely meet fierce resistance from Democrats. We are hearing Boehner just wants to seal the payroll tax cut extension and move on after his painful capitulation in the December deal.

Santorum staffer questions whether God wants women presidents

A staffer in Rick Santorum’s presidential campaign is under fire for an email suggesting a female commander-in-chief could be at odds with the Bible’s teachings.

The Des Moines Register last week reported that Santorum’s Iowa coalitions director, Jamie Johnson, sent an email over the summer asking, ‘Is it God’s highest desire, that is, his biblically expressed will … to have a woman rule the institutions of the family, the church, and the state?”

Michele Bachmann, a social conservative who campaigned heavily in Iowa, competed with Santorum over the conservative evangelical vote in the Iowa caucuses. She dropped out of the race after a dismal finish in the Iowa race.

Perry stands ground on Turkey

Given an opportunity to revise (back down or retract) his comments he made in Monday’s Republican debate linking Turkey to “Islamic terrorists,” Texas Governor Rick Perry stood his ground on Tuesday.

The Republican presidential candidate made no apology for nearly touching off an international incident with his take on the long-time U.S. ally. Perry defended his view in a CNN interview, hours after Turkey’s response.

Here’s the video: