Cited: CNN

Fed Chairman Ben Bernanke said today that the economy is indeed improving, that the recession is indeed behind us, but things aren’t so rosy that the Fed is about to change its interest rate policy anytime soon; in fact Bernanke believes that the economy is still in such a critical stage of growth that he doesn’t see a change in the Fed Funds rate until sometime in 2014.

Presently, the fed funds rate, basically the liquidity spigot from the U.S. central bank to the financial community, is at historically low levels near zero percent. The fed funds rate is the rate charged on money that works its way around the banking system, the rate that one bank charges another for overnight loans, with the Fed keeping enough in the system to fund these loans. The rates on these loans now have been in place since 2008 when the full grip of the recession threatened to bring down the entire financial system.

The news, or lack of news, regarding interest rates was well-received by the U.S. bond market with the rate on 10 year bonds falling to just 1.9%, down from over 2% in yesterday’s trading session. Economists warn however, that while Bernanke did say that Fed Funds rates would probably not change until sometime in 2010, his words are by no means etched in stone. Should economic activity, and especially growth in the U.S. jobs market, start gaining a full head of steam, the Fed Chairman and the Fed Open Market Committee, the voting arm of fed policy, could reverse course quickly and start to let rates rise to cut off any possible inflationary effects of faster economic activity.

The Fed announcement follows its two-day meeting after which the central bank tells the world what they are thinking behind closed doors, or at least some of what they are thinking, regarding the economic outlook for the U.S., the global outlook, as well as some details about their approach to monetary policy, which is followed most closely by the financial community.

The FRB also changed a few members on the 10 member board of fed voters, a regularly scheduled happening at the Fed, with some governors considered to be more in line with Bernanke’s approach than some of the outgoing voters. The new faces will help to ensure that any additional measures taken by the Fed to keep the economy rolling will meet with little or no opposition when it comes to a vote.

My take:

No one expected any change in the Fed’s interest rate policy from the conclusion of today’s meeting. It would certainly be nice to see that in providing the financial community with virtually limitless funds at no cost they would also make some mention of getting the banks to open their wallets a little and to put more of this money….our money….to work getting more people back to work. While it is not the job of the fed to use the bully pulpit to manipulate behavior, it wouldn’t be the worst thing for someone in a position of real power to acknowledge the problem, identify the culprits, and let them know that their behavior has not gone unnoticed.

Cited: MSNBC

Further to the ongoing efforts to stem the tide of childhood obesity and to get our kids eating healthy, at least while they’re in school, toady the U.S. Department of Agriculture published new standards for menus in the school lunch program. The Changes are aimed at improving nutrition by changing what the kids are served. Out, or at least less, are fats and sweets, and in are more fruits and vegetables. Getting the kids on a better diet is the first critical step in improving the overall health of our school children, the most glaring sign of their poor health being the obesity epidemic.

This is the first major change in the school lunch program in fifteen years, despite the problem being around for quite some time, and will effect over 30 million school children that eat in their schools. The new regulations will take over three years to fully implement into the entire school system after it is launched in the fall of 2012.

School officials nationwide are hailing the new standards as an important first step toward getting our kids back into shape and in improving their overall health. Under the new standards, schools will be required to offer their students fruits and vegetables every day. They will also have to increase the whole grain products served to children – meaning more whole grain breads and cereals, as well as reducing fat and sodium (salt) in their diets. The new standards will also require that schools only serve low-fat or reduced fat milk.

As anyone on Weight Watchers knows, portion size is also a key element in staying healthy and fit and this point is also being emphasized by the USDA in their new mandate. Menus offered in the schools will now be required to pay strict attention to portion sizes to ensure that kids are getting the right caloric in-take for their size and age. The efforts put forth by the USDA are part of the Obama Administration, and in particular First Lady Michele Obama’s, campaign Let’s Move as well as the Healthy, hunger-Free Kids Act, which is a law passed last year. The most recent studied conducted on childhood obesity show that over 17% of American children are obese.

Part of the challenge will get kids to “buy into” the program. Just because they have healthier choice doesn’t mean that they will necessarily eat them. White House chef Sam Kass has been working with school chefs around the country to make sure that the new menus are tasty and healthy. For example, while the kids will still get their favorites like pizza and fries, now they will get whole wheat pizza and sweet potato fries instead.

School districts in Seattle are taking the new guidelines a step further by partnering with local farmers and also planting gardens in schools for kids to learn more about food, and eating the food they grow. Many school nutritionists have said the new diets won’t be as big of a challenge as will be trying to reduce sodium in the kid’s food while still making it appealing to them.

My take:

My first question is why on Earth did it take 15 years to revamp the school lunch program when the obesity problem in the U.S. has grown to epidemic proportions? Well, better late than never. To some extent the schools will have to get some help from home too to ensure that the kids understand why the changes are being made and how they can live a better life if they eat better…..at home too. In fact, it probably wouldn’t be the worst idea to have some kind of program for the parents so that they can learn how to prepare more healthy meals for the whole family.

Cited: MSNBC

The Chevy Volt, the all-electric car manufactured by General Motors, finds itself in the middle of a Washington D. C. firestorm, the political type that continues to engulf much of the district these days. One side of the aisle is accusing the Obama Administration of purposely hiding manufacturing defects in the vehicle that some say has fire safety issues. Republican Jim Jordan, chairman of the House Oversight regulatory subcommittee, opened this can of worms with questions as to why U.S. safety regulators delayed a formal investigation into the potential fire hazards posed by the battery pack in the Volt for over six months. He then went on to posture that the reason may very well be that the Obama Administration has been hiding the potential problems in the Volt for its own interests; those being the U.S. government stake in G.M. and the Volt being something of a poster child for the Administration’s advocacy for the electric car industry.

The head of GM, Dan Akerson, suspects that the Volt is being used as a political football by the Republicans and Mr. Jordan for the purpose of making the Administration look bad for it’s support for the technology behind the Volt and for its close financial ties to GM and the auto industry in the wake of the economic meltdown in 2007/2008. The National Highway Traffic Safety Administration conducted its own investigation into the Volt after its tests showed that the battery pack in the Volt can be the source of fires if breached in an accident. However, GM spokesmen note that not one on-the-road incident involving a fire from the Volt battery pack has ever been reported.

The NHTSA was satisfied with GM’s response to the issues with the Volt battery and the proposed remedies, and closed their probe into the matter last week. Head of the NHTSA, David Stricktland came under relentless fire from Jordan and other GOP lawmakers on the committee but he held firm to his agencies findings that the Volt battery pack posed no serious threat to the public safety and that over the course of six months, and without the benefit of any real world data, his agency and engineers did everything possible to probe the Volt for potentially hazardous fire safety risks but found no reason to issue any warnings about the electric vehicle.

Some lawmakers have accused the Obama administration of pressuring GM into hiding information about the fire risks posed by the Volt battery so as to save face for their support and subsidies for the electric car industry. GM head Akerson, a Volt owner, said that no such pressure was ever put on him or anyone at GM by the Obama Administration, further adding that the reputation of the Volt would be the only thing that has to be rebuilt after coming under attack for political purposes by the Republicans on the committee.

My take:

Yet another example of the logjam and take no prisoners mentality of politics in Washington these days. If one side found a cure for cancer, the other side would accuse them of undermining the health care industry. If there are problems with the Volt, then let’s hear about them, address them, and move on. If not, the suits in D.C. should get back to doing the job they were sent there to do and stop all the grandstanding and agenda driven non-sense.