Okay Congress… let me get this straight – You give AIG one hundred fifty billion because they say that it is what they need to continue doing the same things that they have been doing prior to discovering that they need a few billions. You pass twenty-five billion to CitiGroup and guarantee three hundred twenty billion dollars of bad debt without questioning what they are going to do with that money. In all you mete out over a half a trillion dollars without one request for a business plan to ensure that you be giving these beggars more of the same.
You, being Congress, have got a lot of nerve! To say that you are showing favoritism is evident. You bailout some of the Wall Street Investment brokers, but let others go under. You have yet to ask one Wall Street recipient of these ‘free dollars’ for an agreement as to how they will use this money, but insist on all of the above from the Automotive Industry. Why? Considering the ramifications of the automotive industry going away forever, you decide to play Russian roulette with one of the few remaining manufacturing industries left in the United States. I don’t get it?
What is even more disturbing is that the individuals playing hardball with the American economy are subsidizing the foreign car manufacturers in their States to the tune of billions of dollars. Toyota, Honda, Hyundai, Mercedes Benz, Volkswagen, Nissan, and BMW are all entrenched within Southern States with the Senators of those States in the forefront of the opposition to a ‘loan’ to the American Automotive Industry. It should be apparent to the dumbness of Republican constituents that the Republican Party led by these imbecilic individuals is gambling with the welfare of the United States of American.
Let me set the record straight by stating that I have always been against anyone receiving any form of a bailout when it is obvious that every company in financial peril is there because of choices that were made by the CEOs and Board of Directors of those companies. Surely we can all agree that the automotive industry refused all request to upgrade the products they were presenting for sale to the world-wide market, but what of the others that were given bailout money? Weren’t they too advised against the practices that put them in the same financial situation? Didn’t they too, know that they were doing the ‘nasty’ with no regard for integrity? You betcha!
So why is it that these Republican Senators have decided to dig in their heels and refuse to even consider help for the automotive industry? These Republican Senators claim that American autoworkers are getting seventy-one dollars an hour as oppose to thirty-one dollars an hour on the part of the foreign manufacturing automotive workers in their respective States. The notion that UAW workers are getting seventy-one dollars a hour is a categorical lie! The figures that were used to compile that hourly wage include the benefits of every retired worker, not the actual wage of current United Autoworkers at the big three.
The Republican Senators took the word of an entry in the Saint Petersburg Times by Mr. Robert Trigaux and ran with it as a fact. Mr. Triguax has since renounced his original statement as one that is in error as this writer has pointed out. UAW is making 27 dollars an hour, Toyota is making 31 dollars an hour, and Nissan is making 26 dollars an hour plus bonus. Technically, the typical UAW person is making less than the average worker for a foreign car manufacturer at a manufacturing plant that is being subsidized by each respective State. If you factor in the amount of the subsidy, workers at foreign car manufacturing plants are the ones getting close to seventy dollars an hour. How dumb can you get and still be considered a human being?
As is usually is the case, the Republicans have gotten it ass backwards (Senator Vitter) and simply don’t know how to come clean and alert the public to their error, which again points out the dumb and dumber attitude classically associated with the Republican Party.
Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Friday, December 12, 2008
Thursday, November 13, 2008
The Slippery Eel That Is The Economy
With each day I read the tea leaves in the bottom of my teacup and instantaneously I have a panic attack. I don’t know about you, but this is not looking good at all. The Stock Market is not my barometer as to what the economy is doing, but it is never far from wrong. I check the reports from Wal-Mart to get an indications of where the country is going – don’t laugh! Think about it, if Joe the Plummer isn’t buying the best that he can purchase for the lowest price that he can find, Wal-Mart is where he will be for the best price.
When the Republicans decided to give away the money in the bank, where did it show up in the realm of economical statistics – within the stats put out for Sachs-Fifth Avenue that Christmas. Sachs had a seasonal increase of five percent in sales while Wal-Mart had a decrease of one point five percent. Clearly those that have the money will spend it, and predictably so in the places where it is indicative of who is spending of the money. Rich guys don’t go to Wal-Mart!
Secretary Paulson and the SEC guy – Christopher Cox have said with emphatics that they need ‘Bailout’ money to buy the bad debt from the banks and make the world start to go around again. Noticing that the world has not started to go around as predicted since we gave those two ‘hamburglers’ the money, I have to wonder if they really intend to give banks any money. On yesterday, Henry Paulson said as much. With seven hundred billion dollars of our money that he promised that he would spend a certain way that we all thought would be the right plan as stated by them, this guy is suppose to be doing what he said he was going to do. But he isn’t and he is telling us that he isn’t going to do what he said he was going to do – to boot.
Hank Paulson and his department are blowing the money and we are all watching as these guys do it. No money is getting to Main Street. No money is being used to take the toxic debt away from the banks. No money is going to people that want to make loans. Money is going to all the wrong people… shareholders, to finance the buying of other banks, to banks that don’t even want the money, and to, of all people, AIG. Why is the Bush administration allowing this BS to continue without complaint? Why isn’t Congress lamenting this gross misuse of government funds for frivolous crap?
Well, you have been placed on ‘Red Alert’ regarding this issue and as usual no one will shout out to their Congressman about this until it is too late. When Congress comes back to ask for another trillion to rescue the banks, you will know that you have been robbed by a sly slick criminal while you watched daily!
When the Republicans decided to give away the money in the bank, where did it show up in the realm of economical statistics – within the stats put out for Sachs-Fifth Avenue that Christmas. Sachs had a seasonal increase of five percent in sales while Wal-Mart had a decrease of one point five percent. Clearly those that have the money will spend it, and predictably so in the places where it is indicative of who is spending of the money. Rich guys don’t go to Wal-Mart!
Secretary Paulson and the SEC guy – Christopher Cox have said with emphatics that they need ‘Bailout’ money to buy the bad debt from the banks and make the world start to go around again. Noticing that the world has not started to go around as predicted since we gave those two ‘hamburglers’ the money, I have to wonder if they really intend to give banks any money. On yesterday, Henry Paulson said as much. With seven hundred billion dollars of our money that he promised that he would spend a certain way that we all thought would be the right plan as stated by them, this guy is suppose to be doing what he said he was going to do. But he isn’t and he is telling us that he isn’t going to do what he said he was going to do – to boot.
Hank Paulson and his department are blowing the money and we are all watching as these guys do it. No money is getting to Main Street. No money is being used to take the toxic debt away from the banks. No money is going to people that want to make loans. Money is going to all the wrong people… shareholders, to finance the buying of other banks, to banks that don’t even want the money, and to, of all people, AIG. Why is the Bush administration allowing this BS to continue without complaint? Why isn’t Congress lamenting this gross misuse of government funds for frivolous crap?
Well, you have been placed on ‘Red Alert’ regarding this issue and as usual no one will shout out to their Congressman about this until it is too late. When Congress comes back to ask for another trillion to rescue the banks, you will know that you have been robbed by a sly slick criminal while you watched daily!
Tuesday, October 7, 2008
William Ayers and Obama - McCain and the Keating Five
Senator McCain and Governor Palin have gone on record in their speeches to the public that Senator Obama’s character is in question because of his association with Mr. Ayers whose was a member of the Weatherman, a group of individuals that committed crimes against the government from 1970 through 1974. Mr. Ayers was accused of these crimes during the time that Senator Obama was a child in grade school. Mr. Ayers was never convicted of any crimes and now serves on the faculty of the University of Illinois at Chicago.
Mr. Ayers and Senator Obama live within a few blocks of each other and served on the board of a charity organization - Woods Fund of Chicago between 1999 and 2002. Mr. Ayers, in addition to donating two hundred dollars to Senator Obama’s campaign during Barack Obama’s days as a State Senator, did hold a fund-raiser of sorts at his house for Senator Obama.
If there is a connection to corruption, or some other dastardly deed in the association between Senator Obama and Mr. Ayers, I don’t see it. It seems to me that a valiant attempt to smear Senator Obama is being attempted under that flimsiest of circumstances by the Republican presidential candidate when he himself is far more closely associated with a man that was convicted of crimes that did far more horrendous damage to the country than anything William Ayers is purported to have done.
The fact of the matter is Senator McCain did go to the offices of the regulators for the Savings and Loans financial industry and had conversations with those individuals regarding Keating and others. There is no question that he attended meetings that were focused on requesting changes to the regulations that governed the Savings and Loans. Senator McCain was cleared of any direct wrongdoing in the Keating Affair, but remanded for exercising poor judgment.
The Senate Ethics Committee exonerated John Senator McCain in 1991 from any wrongdoing in the Keating affair; however, he was found to have practiced questionable judgment. Did John Senator McCain learn a lesson from his involvement in the Savings and Loan debacle to become the anti-corruption stalwart that his campaign portrays him to be? Or does John Senator McCain still practice questionable judgment when it comes to his campaign contributors, and, if so, what could this mean for the U.S. economy?
The Savings and Loan debacle of the 1980s was one of the worst economic crises in the country's history; it caused the recession of the early -90s, an enormous deficit in the federal budget, and cost taxpayers an estimated $300 billion. The deregulation of the banking industry in the early 1980s allowed financial institutions to use federally insured deposits for previously prohibited high-risk investments. Loopholes created by deregulation were manipulated by loosely knit networks of industry high-flyers who used their savings and loans as personal piggy banks, and left taxpayers responsible for paying back the depositors. Bank regulators found that the majority of thrift failures in the Savings and Loan debacle, over 1,000 institutions, were the direct result of management misconduct, insider abuse, and outright fraud.
A key factor that contributed to the Savings and Loan debacle was political interference with bank regulators whose recommended actions against troubled institutions were consistently ignored. Corrupt Savings and Loan executives were frequent contributors to political campaigns, and used their political influence to stall the efforts of regulators, and continue their operations despite insolvency, which dramatically increased the cost of the eventual bailout. Charles Keating was a prominent figure in the S and L debacle. His CA based Lincoln Savings and Loan utilized banking techniques that were common throughout thrifts involved in the Savings and Loan debacle. The scandal that was coined the Keating 5 was emblematic of the political pressure that prevented bank examiners from doing their job, and exacerbated the crisis to monumental proportions.
Charles Keating was the founder of the Cincinnati, OH law firm Keating, Muething and Klekamp, which handled security work for Marvin Warner, and Home State Savings, responsible for another costly securities fraud case in the Savings and Loan debacle. In 1972, he left law to work for Carl Linder's conglomerate, American Financial Corporation, and, in 1976, moved to Phoenix, AZ, and bought the homebuilding division of Linder's empire, which he renamed American Continental Corporation. In 1984, he bought the CA based Lincoln Savings and Loan, and within 3 years involved the thrift with large investments in junk bonds, real estate projects, and other high risk ventures that benefited the American Continental Corporation. In 1986, San Francisco bank examiners noticed serious discrepancies in the financial records of Lincoln Savings and Loan. The political strings Charles Keating pulled in an effort to prevent a serious investigation resulted in the Keating 5 scandal.
Charles Keating was a large donor to political campaigns, and supported over 36 state and national candidates in their run for public office. He frequently used his political connections to influence legislation, and to prevent the Bank Board from adopting regulations that would harm his assets. In March 1987, Senators John Senator McCain (R-AZ), Dennis DeConcini (D-AZ), Alan Cranston (D-CA), and John Glenn (D-OH), all benefactors of Keating's campaign contributions, held a highly unusual meeting in DeConcini's office with the Chairman of the Bank Board, Edwin Gray, to inquire about the bank examination of Lincoln Savings and Loan.
There is a difference between Senator Obama and Ayers and Senator McCain and Keating... people lost everything as a result of the Lincoln Savings and Loan crash. The Lincoln Savings and Loan debacle is a precursor to the current bailout/buyout of the Real Estate industry fiasco. Is it possible that Senator McCain’s assertion that deregulation is the answer to saving our jobs and fixing the economy more of the same that we experienced in 1989?
Did Senator McCain learn anything from his previous position to deregulate financial institutions – it sure does not look that way?
McCain was forced to distance himself from his former campaign co-chairman, and chief economic advisor, former Senator Phil Gramm, due to his calloused remarks about the sub-prime mortgage crisis that many claim he had a direct role in creating. The sub-prime market crisis has been linked to the Gramm-Leach-Bliley Act of 1999, legislation sponsored by Gramm, which repealed provisions in the Glass-Steagall Act, enacted in the midst of the Great Depression, that paved the way for the formation of major financial conglomerates of banks, security firms, and insurance companies. Phil Gramm was the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs until he left the Senate in 2002. He has gone on to serve as the Vice Chairman of the Swiss investment bank, UBS, and in 2008 disclosed that he worked as a lobbyist for UBS, and attempted to influence legislation related to the sub-prime mortgage crisis while he simultaneously worked on McCain's campaign.
Gramm formerly resigned from the campaign in July, 2 months after the McCain campaign's public purge of staff with conflicts of interest, however, his economic advice remains influential. In a Sept. 14 Washington Post article with the headline "A Nation of Exaggerators"-, one of McCain's current economic advisers, Donald Luskin, stated that he agreed with Gramm's "mental recession"- comment, and felt that the gloomy outlook even McCain has adopted is uncalled for. Despite McCain's staff shake-up in May, his campaign is still riddled with staff who have lobbied on behalf of financial institutions connected to the sub-prime mortgage crisis. McCain's campaign manager, Rick Davis, responsible for drafting the campaign's conflict of interest policy, made headlines in mid Sept. for the continued monthly fee of $15,000 mortgage giant Freddie Mac paid to his lobbying firm Davis Manafort Inc.Newsweek reported that Davis had personally approached Freddie Mac in 2006 to arrange for a new consulting agreement that would allow payments to his firm to continue. Deputy Campaign Manager, Christian Ferry, is, also, a consultant for Davis Manafort.
In looking at the relationship between Mr. Ayers and Senator Obama, it seems to me that there is nothing that even remotely compares, in terms of criminality, to the association that Senator McCain had with Mr. Keating. Senator McCain seems to surround himself with questionable individuals who have been and still are key factors in the decision-making processes of Senator McCain.You be the judge, is Senator McCain barking up the wrong tree in a vain attempt to distract the voters from the real issues?
Mr. Ayers and Senator Obama live within a few blocks of each other and served on the board of a charity organization - Woods Fund of Chicago between 1999 and 2002. Mr. Ayers, in addition to donating two hundred dollars to Senator Obama’s campaign during Barack Obama’s days as a State Senator, did hold a fund-raiser of sorts at his house for Senator Obama.
If there is a connection to corruption, or some other dastardly deed in the association between Senator Obama and Mr. Ayers, I don’t see it. It seems to me that a valiant attempt to smear Senator Obama is being attempted under that flimsiest of circumstances by the Republican presidential candidate when he himself is far more closely associated with a man that was convicted of crimes that did far more horrendous damage to the country than anything William Ayers is purported to have done.
The fact of the matter is Senator McCain did go to the offices of the regulators for the Savings and Loans financial industry and had conversations with those individuals regarding Keating and others. There is no question that he attended meetings that were focused on requesting changes to the regulations that governed the Savings and Loans. Senator McCain was cleared of any direct wrongdoing in the Keating Affair, but remanded for exercising poor judgment.
The Senate Ethics Committee exonerated John Senator McCain in 1991 from any wrongdoing in the Keating affair; however, he was found to have practiced questionable judgment. Did John Senator McCain learn a lesson from his involvement in the Savings and Loan debacle to become the anti-corruption stalwart that his campaign portrays him to be? Or does John Senator McCain still practice questionable judgment when it comes to his campaign contributors, and, if so, what could this mean for the U.S. economy?
The Savings and Loan debacle of the 1980s was one of the worst economic crises in the country's history; it caused the recession of the early -90s, an enormous deficit in the federal budget, and cost taxpayers an estimated $300 billion. The deregulation of the banking industry in the early 1980s allowed financial institutions to use federally insured deposits for previously prohibited high-risk investments. Loopholes created by deregulation were manipulated by loosely knit networks of industry high-flyers who used their savings and loans as personal piggy banks, and left taxpayers responsible for paying back the depositors. Bank regulators found that the majority of thrift failures in the Savings and Loan debacle, over 1,000 institutions, were the direct result of management misconduct, insider abuse, and outright fraud.
A key factor that contributed to the Savings and Loan debacle was political interference with bank regulators whose recommended actions against troubled institutions were consistently ignored. Corrupt Savings and Loan executives were frequent contributors to political campaigns, and used their political influence to stall the efforts of regulators, and continue their operations despite insolvency, which dramatically increased the cost of the eventual bailout. Charles Keating was a prominent figure in the S and L debacle. His CA based Lincoln Savings and Loan utilized banking techniques that were common throughout thrifts involved in the Savings and Loan debacle. The scandal that was coined the Keating 5 was emblematic of the political pressure that prevented bank examiners from doing their job, and exacerbated the crisis to monumental proportions.
Charles Keating was the founder of the Cincinnati, OH law firm Keating, Muething and Klekamp, which handled security work for Marvin Warner, and Home State Savings, responsible for another costly securities fraud case in the Savings and Loan debacle. In 1972, he left law to work for Carl Linder's conglomerate, American Financial Corporation, and, in 1976, moved to Phoenix, AZ, and bought the homebuilding division of Linder's empire, which he renamed American Continental Corporation. In 1984, he bought the CA based Lincoln Savings and Loan, and within 3 years involved the thrift with large investments in junk bonds, real estate projects, and other high risk ventures that benefited the American Continental Corporation. In 1986, San Francisco bank examiners noticed serious discrepancies in the financial records of Lincoln Savings and Loan. The political strings Charles Keating pulled in an effort to prevent a serious investigation resulted in the Keating 5 scandal.
Charles Keating was a large donor to political campaigns, and supported over 36 state and national candidates in their run for public office. He frequently used his political connections to influence legislation, and to prevent the Bank Board from adopting regulations that would harm his assets. In March 1987, Senators John Senator McCain (R-AZ), Dennis DeConcini (D-AZ), Alan Cranston (D-CA), and John Glenn (D-OH), all benefactors of Keating's campaign contributions, held a highly unusual meeting in DeConcini's office with the Chairman of the Bank Board, Edwin Gray, to inquire about the bank examination of Lincoln Savings and Loan.
There is a difference between Senator Obama and Ayers and Senator McCain and Keating... people lost everything as a result of the Lincoln Savings and Loan crash. The Lincoln Savings and Loan debacle is a precursor to the current bailout/buyout of the Real Estate industry fiasco. Is it possible that Senator McCain’s assertion that deregulation is the answer to saving our jobs and fixing the economy more of the same that we experienced in 1989?
Did Senator McCain learn anything from his previous position to deregulate financial institutions – it sure does not look that way?
McCain was forced to distance himself from his former campaign co-chairman, and chief economic advisor, former Senator Phil Gramm, due to his calloused remarks about the sub-prime mortgage crisis that many claim he had a direct role in creating. The sub-prime market crisis has been linked to the Gramm-Leach-Bliley Act of 1999, legislation sponsored by Gramm, which repealed provisions in the Glass-Steagall Act, enacted in the midst of the Great Depression, that paved the way for the formation of major financial conglomerates of banks, security firms, and insurance companies. Phil Gramm was the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs until he left the Senate in 2002. He has gone on to serve as the Vice Chairman of the Swiss investment bank, UBS, and in 2008 disclosed that he worked as a lobbyist for UBS, and attempted to influence legislation related to the sub-prime mortgage crisis while he simultaneously worked on McCain's campaign.
Gramm formerly resigned from the campaign in July, 2 months after the McCain campaign's public purge of staff with conflicts of interest, however, his economic advice remains influential. In a Sept. 14 Washington Post article with the headline "A Nation of Exaggerators"-, one of McCain's current economic advisers, Donald Luskin, stated that he agreed with Gramm's "mental recession"- comment, and felt that the gloomy outlook even McCain has adopted is uncalled for. Despite McCain's staff shake-up in May, his campaign is still riddled with staff who have lobbied on behalf of financial institutions connected to the sub-prime mortgage crisis. McCain's campaign manager, Rick Davis, responsible for drafting the campaign's conflict of interest policy, made headlines in mid Sept. for the continued monthly fee of $15,000 mortgage giant Freddie Mac paid to his lobbying firm Davis Manafort Inc.Newsweek reported that Davis had personally approached Freddie Mac in 2006 to arrange for a new consulting agreement that would allow payments to his firm to continue. Deputy Campaign Manager, Christian Ferry, is, also, a consultant for Davis Manafort.
In looking at the relationship between Mr. Ayers and Senator Obama, it seems to me that there is nothing that even remotely compares, in terms of criminality, to the association that Senator McCain had with Mr. Keating. Senator McCain seems to surround himself with questionable individuals who have been and still are key factors in the decision-making processes of Senator McCain.You be the judge, is Senator McCain barking up the wrong tree in a vain attempt to distract the voters from the real issues?
Wednesday, October 1, 2008
I Failed Economics 101
The first time that I enrolled in Economics I failed because first of all, I wasn’t interested in economics, and secondly; I didn’t think that it applied to me. I actually didn’t know then what I know now – it does apply to me. Trying to make ends meet in your household requires that you get involved with economics, or you will not be living in your own house much longer. Knowing just the basics is enough to tell me that Congress is the last place that I would go to looking for help if I were in trouble financially.
In my house I pay the mortgage, the light bill, the telephone bill… you know the drill. I also have incidentals that I must pay – stuff that comes up suddenly. In a given month, after paying what I must pay, I try to save a few dollars for that emergency that comes up. Emergencies are – the water heater failing, the muffler fell off the car, or I had to have an operation. You have to have a few bucks saved to carry you through until you are better. When you are living from paycheck to paycheck you can’t respond favorably to a crisis, in fact, situations just as I have described are what take most of us out of our comfort zone.
The government is in the same situation and you have but to look under that rug to see that I am not wrong. All of the telltale signs are there. They can’t balance the budget because they are spending a gross amount of money fighting two wars. The tax base is shrinking every month as more and more workers are losing their jobs, so they don’t have any money. China and the Arabs own us because we have borrowed so much money to finance the war and all the other things that emerge as a result of those wars. If you don’t believe me, ask your Congressman to give you a list of all the programs that are being shorted support in the National Budget. Check with the GAO… they are the people that keep track of where we are spending the money.
Borrowing seventy billion dollars is not bad if you have a plan to get yourself out of debt with the money. Ideally, you want to pay off your debts and have a little left over so that you don’t go back in the hole. Is that the case with the bailout… oops buyout? No! It is not the case. I tell you that the real problem with our economy is that we don’t have cash flow. Others are telling you that we have a problem because we don’t have liquidity. What is the difference between liquidity and cash flow?
Liquidity, in economic terms, is: capable of covering current liabilities quickly with current assets. That would be the savings thingy… okay. If you don’t have cash, you can’t do anything without having to put everything else in a strain. The recovery strategy must take into consideration how to maintain cash flow. In the bailout/buyout scheme we are led to believe that if we give the cash to the people that flubbed the cash flow thing to begin with everything will be alright. In other words, the bank will have more money to loan to the people who will in turn default on the loan because they and their neighbors are losing their jobs and there is no cash flow.
Get my drift? You can’t absorb all of the delinquent loans by giving the banks more money and taking away the bad debt. That is not how you solve the liquidity problem.
Cash Flow – 1: a measure of an organization's liquidity that usually consists of net income after taxes plus noncash charges against income. 2: a flow of cash; especially: one that provides solvency
In this economy, it now works from the bottom up. ‘Joe Six Pack’ gets paid on Friday. He buys a case of beer from the liquor store, dip and potato chips from the 711, fills up his gas tank and heads home. His buddies got paid and they stop by the Meat Market for hamburger, the cleaners for their dry cleaning and what have you before continuing on over to have a cookout with their friends.
That ladies and gentlemen was a small example of cash flow. It is miniscule, but represents my point. Cash flow originates with ‘Joe Six Pack’ getting paid on Friday. He pays his mortgage – the bank gets cash! He pays his car note – the bank gets cash! He buys a case of beer – the retailer gets cash! The name of the game is ‘trickle up’ economics because the money is no longer flowing down as it did before big business out-sourced all of the jobs. Take a good look at the ISM Index and you will know without a doubt that we are in deep, er!!! you know what I mean!
The ISM Index is, for those of us that have never heard of it, the government’s pulse indicator for gauging the output of our manufacturers – the goods they are producing/manufacturing. It is also a good indicator as to whether the manufacturing community will be hiring. It does not lie! I am sorry, but I have to tell you that it is about to flat line. Yeah! We are not producing a darn thing that will make a difference when it comes to generating enough jobs to support the economy. You see, all of those fifty to sixty thousand dollar jobs went overseas to people willing to work for a fraction of that amount. You know - the sweat factories in places like in Myanmar.
I wish that I was wrong about this one, but I don’t think so! I jumped through hoops trying to tell everybody to say no to the 'big tax cut’. Everybody laughed at me as they went to the bank. Some of those same people have moved on to smaller, less pretentious dwellings because they don’t have that fat income tax refund anymore, nor do they have a job.
In my house I pay the mortgage, the light bill, the telephone bill… you know the drill. I also have incidentals that I must pay – stuff that comes up suddenly. In a given month, after paying what I must pay, I try to save a few dollars for that emergency that comes up. Emergencies are – the water heater failing, the muffler fell off the car, or I had to have an operation. You have to have a few bucks saved to carry you through until you are better. When you are living from paycheck to paycheck you can’t respond favorably to a crisis, in fact, situations just as I have described are what take most of us out of our comfort zone.
The government is in the same situation and you have but to look under that rug to see that I am not wrong. All of the telltale signs are there. They can’t balance the budget because they are spending a gross amount of money fighting two wars. The tax base is shrinking every month as more and more workers are losing their jobs, so they don’t have any money. China and the Arabs own us because we have borrowed so much money to finance the war and all the other things that emerge as a result of those wars. If you don’t believe me, ask your Congressman to give you a list of all the programs that are being shorted support in the National Budget. Check with the GAO… they are the people that keep track of where we are spending the money.
Borrowing seventy billion dollars is not bad if you have a plan to get yourself out of debt with the money. Ideally, you want to pay off your debts and have a little left over so that you don’t go back in the hole. Is that the case with the bailout… oops buyout? No! It is not the case. I tell you that the real problem with our economy is that we don’t have cash flow. Others are telling you that we have a problem because we don’t have liquidity. What is the difference between liquidity and cash flow?
Liquidity, in economic terms, is: capable of covering current liabilities quickly with current assets. That would be the savings thingy… okay. If you don’t have cash, you can’t do anything without having to put everything else in a strain. The recovery strategy must take into consideration how to maintain cash flow. In the bailout/buyout scheme we are led to believe that if we give the cash to the people that flubbed the cash flow thing to begin with everything will be alright. In other words, the bank will have more money to loan to the people who will in turn default on the loan because they and their neighbors are losing their jobs and there is no cash flow.
Get my drift? You can’t absorb all of the delinquent loans by giving the banks more money and taking away the bad debt. That is not how you solve the liquidity problem.
Cash Flow – 1: a measure of an organization's liquidity that usually consists of net income after taxes plus noncash charges against income. 2: a flow of cash; especially: one that provides solvency
In this economy, it now works from the bottom up. ‘Joe Six Pack’ gets paid on Friday. He buys a case of beer from the liquor store, dip and potato chips from the 711, fills up his gas tank and heads home. His buddies got paid and they stop by the Meat Market for hamburger, the cleaners for their dry cleaning and what have you before continuing on over to have a cookout with their friends.
That ladies and gentlemen was a small example of cash flow. It is miniscule, but represents my point. Cash flow originates with ‘Joe Six Pack’ getting paid on Friday. He pays his mortgage – the bank gets cash! He pays his car note – the bank gets cash! He buys a case of beer – the retailer gets cash! The name of the game is ‘trickle up’ economics because the money is no longer flowing down as it did before big business out-sourced all of the jobs. Take a good look at the ISM Index and you will know without a doubt that we are in deep, er!!! you know what I mean!
The ISM Index is, for those of us that have never heard of it, the government’s pulse indicator for gauging the output of our manufacturers – the goods they are producing/manufacturing. It is also a good indicator as to whether the manufacturing community will be hiring. It does not lie! I am sorry, but I have to tell you that it is about to flat line. Yeah! We are not producing a darn thing that will make a difference when it comes to generating enough jobs to support the economy. You see, all of those fifty to sixty thousand dollar jobs went overseas to people willing to work for a fraction of that amount. You know - the sweat factories in places like in Myanmar.
I wish that I was wrong about this one, but I don’t think so! I jumped through hoops trying to tell everybody to say no to the 'big tax cut’. Everybody laughed at me as they went to the bank. Some of those same people have moved on to smaller, less pretentious dwellings because they don’t have that fat income tax refund anymore, nor do they have a job.
Tuesday, September 30, 2008
The Republicans are playing the 'B' Card
So, Bailout 1 never got a chance and I am so glad for that. The Republicans are playing the 'Blame' card. Why should you or I have to pay for what some bozos on Wall Street and the man down there at 1600 Pennsylvania Avenue are responsible for having put in play? I am not interested in helping anybody that did not have my best interest at heart from the beginning. Show me where Wall Street ever did anything for the man on the street. Show me where all of the middle class jobs went and I will show you where ‘they’ need to go to get the help that ‘they’ need. I am using the word ‘‘they’’ liberally because it is a way of expressing just how far away these people are from me and reality. This situation is 'their' reality check. You can't scare me anymore because I don't believe you anymore.
Here is the cool skinner on how the Bailout went south in the Devil’s hand basket. Bear in mind that the Republican Party in the guise of Phil Graham set all of this up when ‘they’ changed the Commodity Futures Market Act in 2000. That set in motion all of the speculation that sent Enron, WorldCom, and the Electrical Utilities market in a tailspin. The futures market was manipulated and it was apparent to the people on Wall Street and ‘they’ took advantage of it. Everybody made money, bought fancy cars, and big houses in gated communities.
In addition, big business saw that ‘they’ could out-source jobs to wherever. We noticed it as a person that spoke English with a serious accent reading from a script answering the phone and fielding our questions with no idea as to what we wanted. Advanced technology took more people off of the assembly line, further reducing the middle class. With a fine chisel and a never tiring hand big business advanced its assault on our Unions, reducing them to ineffective street crowds. We loss every job that had a value-added tag and Wall Street smiled and said… “This is good”.
Wall Street and Big Business did everything ‘they’ could to strip every dollar from the hands of the very people that were needed to support the American economy. Without money in savings accounts, without people spending money, buying stuff and using stuff, cash flow ceases to exist. What did ‘they’ expect? Didn’t anybody think that this would happen? Drunk with the unbelievable influx of cash, Wall Street and Big Business could care less.
The next area of attack was the housing market. ‘‘they’’ applied the same philosophy to the housing market, giving over-appraised houses to people that wanted to live the American dream, but had no real money to buy into the dream. Mortgage lenders followed the game plan that Wall Street had polished into a money-maker and the boom was on. Everybody that could drag himself into the door was given a fat boy loan.
I say no to the bailout. Let all of those that raked in the big bucks return the favor. Give the money back. Straighten out those loans that you fraudulently put together. Stop the felonious practices that took all of our jobs and sent them overseas.
In response to those that blamed the Democratic Party for the failure of the Bailout to be a reality, let me tell you exactly what happened. The Democrats have enough votes in both the House and Senate to have passed this bill with no problem. The Democrats, and I, believe that since the Republicans are responsible for this mess, ‘they’ should share in whatever method of recovery that was devised. The Republicans would love to see the measure pass, but want no part of the blame if the measure should fail. So, the Democrats had a plan, we will allow so many of our votes to be recorded, but if the Republicans don’t match the vote count, thus insuring bi-partisan support, than we will instruct the rest of the Democratic vote to record a negative vote.
I don’t blame Pelosi for doing what she did. She is nobody’s fool. The Republicans and the ‘lame duck’ down the street had better come up with a plan for saving the economy, or history will not be too kind to ‘them’. The President should stop begging and demand a positive response from his Party!
Here is the cool skinner on how the Bailout went south in the Devil’s hand basket. Bear in mind that the Republican Party in the guise of Phil Graham set all of this up when ‘they’ changed the Commodity Futures Market Act in 2000. That set in motion all of the speculation that sent Enron, WorldCom, and the Electrical Utilities market in a tailspin. The futures market was manipulated and it was apparent to the people on Wall Street and ‘they’ took advantage of it. Everybody made money, bought fancy cars, and big houses in gated communities.
In addition, big business saw that ‘they’ could out-source jobs to wherever. We noticed it as a person that spoke English with a serious accent reading from a script answering the phone and fielding our questions with no idea as to what we wanted. Advanced technology took more people off of the assembly line, further reducing the middle class. With a fine chisel and a never tiring hand big business advanced its assault on our Unions, reducing them to ineffective street crowds. We loss every job that had a value-added tag and Wall Street smiled and said… “This is good”.
Wall Street and Big Business did everything ‘they’ could to strip every dollar from the hands of the very people that were needed to support the American economy. Without money in savings accounts, without people spending money, buying stuff and using stuff, cash flow ceases to exist. What did ‘they’ expect? Didn’t anybody think that this would happen? Drunk with the unbelievable influx of cash, Wall Street and Big Business could care less.
The next area of attack was the housing market. ‘‘they’’ applied the same philosophy to the housing market, giving over-appraised houses to people that wanted to live the American dream, but had no real money to buy into the dream. Mortgage lenders followed the game plan that Wall Street had polished into a money-maker and the boom was on. Everybody that could drag himself into the door was given a fat boy loan.
I say no to the bailout. Let all of those that raked in the big bucks return the favor. Give the money back. Straighten out those loans that you fraudulently put together. Stop the felonious practices that took all of our jobs and sent them overseas.
In response to those that blamed the Democratic Party for the failure of the Bailout to be a reality, let me tell you exactly what happened. The Democrats have enough votes in both the House and Senate to have passed this bill with no problem. The Democrats, and I, believe that since the Republicans are responsible for this mess, ‘they’ should share in whatever method of recovery that was devised. The Republicans would love to see the measure pass, but want no part of the blame if the measure should fail. So, the Democrats had a plan, we will allow so many of our votes to be recorded, but if the Republicans don’t match the vote count, thus insuring bi-partisan support, than we will instruct the rest of the Democratic vote to record a negative vote.
I don’t blame Pelosi for doing what she did. She is nobody’s fool. The Republicans and the ‘lame duck’ down the street had better come up with a plan for saving the economy, or history will not be too kind to ‘them’. The President should stop begging and demand a positive response from his Party!
Saturday, September 27, 2008
How To Rescue The Economy
I want to share with you my thoughts on this bailout situation. We don't need seven hundred billion dollars to repair this problem. In fact, we don't need any money at all. This is why...
1. We should renegotiate all of the loans that are sub-prime and get rid of the ARM forever. All of the loans that are delinquent, or borderline should be extended so that the borrower can meet the payments. In other words, if it takes more than thirty years to repay a loan at three hundred dollars a month, as oppose a fixed thirty year loan with payments of nine hundred, then restructure the loan so that the person can make the payments.
2. Identify all loans and the circumstances that are presently making the borrower delinquent in payments - resolve it by one of two ways. Re-finance the loan terms in such a way that the borrower can make payments, or place that loan at high risk for further evaluation and resolvement.
3. Those mortgage lenders that stretched the parameters for making loans to borrowers that were marginally qualified should be prosecuted for fraud.
4. No golden parachutes for CEOs and administrative officers that were at the helm of companies that failed - retroactive. In other words, if the culprit is gone, go get him! Limit the retirement package for all CEOs.
5. No money to investment banks that are going under.
6. Re-instate the regulations that were withdrawn with the Commodity Futures Market Act of 2000. Increase the transparency of all markets wherein there is the possibility for speculation - oil, electricity, etc. Severe penalties for violators.
7. Institute national projects that would create jobs (bridge and road repair, technical skills) Setup centers dedicated to the re-tooling of the job market so that individuals can make themselves employable. Make it a goal to reduce the pollutions of automobile by setting the bar for carbon reduction and using the money that was accepted by the auto industry to retool that industry.
8. Re-structure the tax code so that the taxes for those making less than fifty thousand are not taxed as much as those making between fifty thousand to one hundred fifty thousand, and those making more than one hundred fifty thousand will pay a little less than those making more than one hundred fifty thousand. Let's rebuild the tax structure in the shape of a vase - small at the bottom, fat in the middle, and somewhat bigger than the bottom at the top.
9. Increase Social Security taxes by raising the taxable group to those making two hundred seventy thousand.
Those in a position to set policy should began to understand that this economy is not trickle down, it is trickle up. The reason that you don't have cash flow is because the work force is reduced and can't spend enough money to support a substantial cash flow. With a reduction of the people that were making fifty to sixty thousand dollars a year, we lost cash flow.
We should, all as one, resist the notion that if we don't do something tomorrow, the world will cease to exist as we know it. The Bush administration has used 'fear' tactics more than enough times to let me know that it 'ain't so' folks. Bush lied about WMDs in Iraq. Bush lied about Al Qaeda in Iraq. He has not kept his promise to get Osama Bin Laden. The Bush administration cannot be trusted with seven hundred billion dollars just before they walk out of the door. Personally, I think Bush and Cheney and the rest of the gang are seeking their severance pay (golden parachute) before bailing out.
Here is your cue... the banking system was supposed to have crashed last weekend - it didn't. It was supposed to crashed on last Monday - it didn't. Now it is supposed to crash on this coming Monday (September 29, 2008); my prediction - it won't!
Don't believe the hype; we don't need a bailout! If you agree with me, send this letter to your Congressional representatives in both houses asap!
1. We should renegotiate all of the loans that are sub-prime and get rid of the ARM forever. All of the loans that are delinquent, or borderline should be extended so that the borrower can meet the payments. In other words, if it takes more than thirty years to repay a loan at three hundred dollars a month, as oppose a fixed thirty year loan with payments of nine hundred, then restructure the loan so that the person can make the payments.
2. Identify all loans and the circumstances that are presently making the borrower delinquent in payments - resolve it by one of two ways. Re-finance the loan terms in such a way that the borrower can make payments, or place that loan at high risk for further evaluation and resolvement.
3. Those mortgage lenders that stretched the parameters for making loans to borrowers that were marginally qualified should be prosecuted for fraud.
4. No golden parachutes for CEOs and administrative officers that were at the helm of companies that failed - retroactive. In other words, if the culprit is gone, go get him! Limit the retirement package for all CEOs.
5. No money to investment banks that are going under.
6. Re-instate the regulations that were withdrawn with the Commodity Futures Market Act of 2000. Increase the transparency of all markets wherein there is the possibility for speculation - oil, electricity, etc. Severe penalties for violators.
7. Institute national projects that would create jobs (bridge and road repair, technical skills) Setup centers dedicated to the re-tooling of the job market so that individuals can make themselves employable. Make it a goal to reduce the pollutions of automobile by setting the bar for carbon reduction and using the money that was accepted by the auto industry to retool that industry.
8. Re-structure the tax code so that the taxes for those making less than fifty thousand are not taxed as much as those making between fifty thousand to one hundred fifty thousand, and those making more than one hundred fifty thousand will pay a little less than those making more than one hundred fifty thousand. Let's rebuild the tax structure in the shape of a vase - small at the bottom, fat in the middle, and somewhat bigger than the bottom at the top.
9. Increase Social Security taxes by raising the taxable group to those making two hundred seventy thousand.
Those in a position to set policy should began to understand that this economy is not trickle down, it is trickle up. The reason that you don't have cash flow is because the work force is reduced and can't spend enough money to support a substantial cash flow. With a reduction of the people that were making fifty to sixty thousand dollars a year, we lost cash flow.
We should, all as one, resist the notion that if we don't do something tomorrow, the world will cease to exist as we know it. The Bush administration has used 'fear' tactics more than enough times to let me know that it 'ain't so' folks. Bush lied about WMDs in Iraq. Bush lied about Al Qaeda in Iraq. He has not kept his promise to get Osama Bin Laden. The Bush administration cannot be trusted with seven hundred billion dollars just before they walk out of the door. Personally, I think Bush and Cheney and the rest of the gang are seeking their severance pay (golden parachute) before bailing out.
Here is your cue... the banking system was supposed to have crashed last weekend - it didn't. It was supposed to crashed on last Monday - it didn't. Now it is supposed to crash on this coming Monday (September 29, 2008); my prediction - it won't!
Don't believe the hype; we don't need a bailout! If you agree with me, send this letter to your Congressional representatives in both houses asap!
Saturday, September 20, 2008
Will Bailing Out the Banking Industry Really Help?
The Bush administration continues to put forth a policy that will, in the end, bring down the house of cards surrounding Wall Street. As has been the case before now, Bush continues to protect big business and the rich at the expense of the consumer. Taxpayers are being asked to foot the bill once again; the same taxpayers whose jobs have been out-sourced overseas. Where is the logic in trickledown economics in a global economy?
Previously, I suggested that the way to recover from this dilemma is to simply renegotiate the loans of delinquent customers in such a manner that each of the delinquent consumers will again be able to make the payments on their respective loans. Notice that I didn’t make one reference to shelling out money to achieve this goal. This would improve the liquidity, to some degree, for local loan agencies. If every delinquent homeowner were allowed to keep his home, and if these marginal loans could be bungled for purchase by investors willing to take the risk, then we could see a two pronged attack to resolve the issues facing the banking industry overall.
The Secretary of the Treasury has this brilliant idea to immediately throw billions of dollars onto a fire that can only be put out over time with what I call ‘trickle up’ economics. If the money used to shore up the economy was done by printing more paper money as part of the buyout that will signal the devaluing of the dollar. Once the dollar, used by most of the free world as the currency of choice in trading loses its value, we will began to see the dollar swirl within the confines of the toilet bowl and disappear forever as the currency of choice in trading. China, the Pacific Rim investors, and the Arabs will have a terrific choice to make, one that we will have no say in the makeup of.
Instead of letting investors take the cream off of the top, the policy should be to allow the cream to rise to the top by supporting the consumer base. One can only hope that these educated individuals will began to realize that it has been the consumer that supported the American economy in the past, and only the consumer can return this economy to where it was previous to the mass deregulation instituted by the Bush administration. Yes, I do blame Bush and the Republican dominated Congress because none of the deregulation was done with Democrats in agreement of these new regulations, and you can point your finger at Phil Gramm – thanks for nothing Phil.
This writer and others with no measure of discipline in economics predicted that the Bush doctrine on economics would destroy the delicate balance held by the United States in the global economic arena. I complained to everyone that I could write to that we are about to, with this grand tax cut program that rewards the rich at the expense of the poor deal a death stroke to the United States economy. You simply cannot spend every dime that you have (surplus – from the Clinton administration), ring-up deficits by charging where possible (the selling of bonds) and mismanage your house (taxes received) the way that the Bush administration has done and survive.
I continue to warn that if the Bush administration continues to try to bring this problem under control by buying out every failed bank that we will be involved in the most volatile non-recoverable situation ever. It will surpass the 1929 crash of Wall Street in comparison like an anthill next to Mt. Everest.
Previously, I suggested that the way to recover from this dilemma is to simply renegotiate the loans of delinquent customers in such a manner that each of the delinquent consumers will again be able to make the payments on their respective loans. Notice that I didn’t make one reference to shelling out money to achieve this goal. This would improve the liquidity, to some degree, for local loan agencies. If every delinquent homeowner were allowed to keep his home, and if these marginal loans could be bungled for purchase by investors willing to take the risk, then we could see a two pronged attack to resolve the issues facing the banking industry overall.
The Secretary of the Treasury has this brilliant idea to immediately throw billions of dollars onto a fire that can only be put out over time with what I call ‘trickle up’ economics. If the money used to shore up the economy was done by printing more paper money as part of the buyout that will signal the devaluing of the dollar. Once the dollar, used by most of the free world as the currency of choice in trading loses its value, we will began to see the dollar swirl within the confines of the toilet bowl and disappear forever as the currency of choice in trading. China, the Pacific Rim investors, and the Arabs will have a terrific choice to make, one that we will have no say in the makeup of.
Instead of letting investors take the cream off of the top, the policy should be to allow the cream to rise to the top by supporting the consumer base. One can only hope that these educated individuals will began to realize that it has been the consumer that supported the American economy in the past, and only the consumer can return this economy to where it was previous to the mass deregulation instituted by the Bush administration. Yes, I do blame Bush and the Republican dominated Congress because none of the deregulation was done with Democrats in agreement of these new regulations, and you can point your finger at Phil Gramm – thanks for nothing Phil.
This writer and others with no measure of discipline in economics predicted that the Bush doctrine on economics would destroy the delicate balance held by the United States in the global economic arena. I complained to everyone that I could write to that we are about to, with this grand tax cut program that rewards the rich at the expense of the poor deal a death stroke to the United States economy. You simply cannot spend every dime that you have (surplus – from the Clinton administration), ring-up deficits by charging where possible (the selling of bonds) and mismanage your house (taxes received) the way that the Bush administration has done and survive.
I continue to warn that if the Bush administration continues to try to bring this problem under control by buying out every failed bank that we will be involved in the most volatile non-recoverable situation ever. It will surpass the 1929 crash of Wall Street in comparison like an anthill next to Mt. Everest.
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