The next shoe to drop is Citibank!

And the beat goes on....

 

Citigroup has now become the next AIG to declare its unfitness to continue as an American institution. It has turned itself over to the US Government for AIG-style treatment including another $20 Billion USD and up to $300 Billion USD in toxic paper (remember its only toxic due to the Government's mark-to-market rule).

 

If I was the Big-3/UAW I would be screaming for fair treatment under the Amendment 14 wording. However, it is probably going to be a big political mess since the members of Congress from MI are going to be yelling, but everyone else is still very cool to the idea of a bail-out for Detroit.

 

This mess is continuing only because the Bush-43 administration WILL NOT cancel the mark-to-market ruling and, oh well, go see my previous post about solutions to this financial crisis. It is not impossible, just a bit of thinking and non-political dealing will solve this problem.

 

I don't know why the Bush-43 SEC/FASB will NOT revoke the mark-to-market rule that is causing most of this problem. Unbelievable, but BHO's ideas are not going to solve the problems either from what we are hearing. He is simply saying he is going to create 2.5 million new jobs (no details), he is going to deal with this financial crisis (no details), and get the economy back on track (no details).

 

He is now the President-elect and has yet to offer much of anything in the way of details of how he will deal with this issue which his group are blaming entirely on the Bush-43 team without any comment about how the Democrats in the 109-110th Congress stopped the oversight of the GSE's (Fannie and Freddie) due to the amount of lobbying money they were receiving from these particular mortgage companies.

 

Problems and solutions to Financial Crisis of 2008

Listening to the financial talking heads yell and scream about what is wrong with the economy, should the US Government bail-out the Big-3/UAW folks, should we distribute wealth, should we allow employees to lose the right to a secret ballot, or should everyone be guaranteed a living wage (yes, I heard that proposition being thrown around on MSNBC)?

 

To me, its unbelievable that we don't understand how we got into this problem and how we can get out of it without mortgaging our future. Let me see if I can explain it one more time.

 

First, we got into this problem because of over 30 years (beginning with the CRA of 1977) of government attempting to social engineer the US society. The Great Society was an extension of the FDR "New Deal", and when it didn't move fast enough, liberals figured out that they had to write specific legislation, not blanket conceptual, "feel-good" bills.

 

Second, the Federal Reserve has been willing to use its monetary policies via the FOMC interest rate actions to attempt to stop the capitalistic cycles that this economy goes through instead of helping us to understand that we need to prepare to for "years of lean."

 

Third, legislative welfare from those entities being regulated to get Congress to look the other way has caused the whole financial crisis ball to get rolling.

 

So what are the solutions?

 

1. Revoke the "mark-to-market" ruling and Sarbanes-Oxley Act of 2002 immediately. This was not regulation, but extremely OVER-REGULATION that were prime example of LOUC (law of unintended consequences). Cost: $0

 

2. Backup all US depository accounts with FDIC-type insurance, not just the first $100,000.00. Cost: $0 since insurance paid for by insured institution based on credit rating.

 

3. Demand normalized mortgage underwriting standards of 10-15% down payment, income verification, and load-to-value limits. Cost: $0

 

4. For mortgages already underwater (a negative loan-to-value ratio), extend the mortgage term and stabilize the interest rate in exchange for future equity participation. Cost: $0

 

The problems are not impossible, nor are the solutions if one just stops to think and doesn't panic like the US Government did in October. The Bush-43 administration while it inherited the seeds of this financial crisis, they did everything possible to germinate and grow it into the global mess it is now. All US political parties are to blame as much as greedy corporate managers and incompetent state and local politicians who both couldn't manage their ways out of a wet paper bag.

 

How the market discounts future events - like BHO

Someone asked me how I could put all these market actions at the feet of BHO and his SMDC before they have even taken office?

 

Well, the stock market is a discounter of future events, in other words, it does not look back it looks forward and tries to determine where the economy will be 3-12 months from now. People don't invest for the past, they invest for the future so when someone buys a stock (goes long, we say) and then another and then another, we have a surplus of buyers over sellers and the price goes up as more buyers have to "pay up" for the stock to get sellers to give up their stock. It's that simple.

 

So what happens when the market falls? The reverse happens. Investors believe that their investments are going to be worse less tomorrow, next week, next month so they sell their positions ("close") to someone that thinks they are wrong. However, in a market crash like what we are experiencing these days, sellers largely outnumber buyers so the laws of supply and demand take over, and sellers have to lower their asking price (the offer) to get buyers to take a risk that the market will not materially continue down or else they will soon become sellers as well (a bull squeeze or trap).

 

So what does this market crash since BHO's victory 2 weeks ago mean? It's very simple: the market (all the investors rolled into one large, bio-economic mass) are discounting that he is not going to be able to solve the problems of this economy, and in fact, they believe that he is going to make it worse with his hand-outs, bail-outs, tax hikes, and generally socialistic ideas and agenda.

 

Thus, investors are taking their money out of the US markets and putting them in cash so that they get taxed at a lower capital gains rate that BHO promised he would "raise on the rich". Well, who are the only people that have large stock portfolios with lots of recent capital gains to protect? THE RICH!!!!!!

 

The market is simply doing what it has always done is prepare for the future 3-12 month from now. They are saying that its not going to be a pretty picture for investing in the USA so, "Asta la vista, baby!"

 

The market will find support wallow around for the next 6-7 months and then slowly begin to recover. Remember, those that are getting out of the market in droves are not going to be coaxed back into the market until they have assessed the damages and have licked their wounds. The public will take some time before they begin to recommit their retirement money to the market.

 

So, can BHO be responsible for this market crash? Yes, but only because of his talk and promises. If he follows through, its priced into the market, as we say. If he moves to the center (which I don't think he will) given that he is really, really smart (wicked smart) as many think he is, he will understand that by doing what he promised will only produce what Obamamanites are saying, "He is the new FDR", and give us the 2nd Great Depression.

 

Many believe we can't go into a Great Depression, but with all the liquidity being thrown around and interest rates near zero, we could something worse: hyper-deflation followed by hyper-inflation. The worst of all financial whipsaws! The proverbial 1-2 punch back to back.

Arrogance of the Big-3 and UAW

The UAW arrogance in the form of its President, Ron Gettelfinger, said that its not the union and its members fault that the Big-3 are in trouble that they should not have to take wage and salary reductions to get the bail-out from Washington.

 

He even went as far as to say he hoped that the Big-3 could hold out until the BHO administration came to Washington since the Bush-43 administration isn't interested in helping Detroit out of this problem.

 

I CAN'T BELIEVE THE CAHONES OF THESE PEOPLE!!

 

It sounds like they deserve the money and they need it to pay their non-competitive salaries and benefit packages. Google the auto industry problems coming from the union contracts if you want the details. They are all over the Internet.

 

Capitalism says companies fail because of either two reasons:

       Bad decisions by management

       Bad products and services

 

Public money should not prop up companies that find themselves in these situations. Let them go and let the remains be purchased and utilized by someone that can make it work. It's not impossible as other car companies have shown.

 

When a bail-out is NOT a bail-out!

When is a bail-out not a bail-out? When it called everything else but a bail-out.

 

Washington DC and its friends, I mean those that are coming "hat in hand" for money from the public trough are trying desperately to call this flood of government money, YOUR MONEY, anything but a bail-out. For example:

 

Henry Paulson on September 19, 2008 now refers to the $700 Billion USD bail-out ESA 2008 as a "Troubled Asset Relief Program."

 

Robert Nardelli, CEO of Chrysler, on November 19, 2008 called the $25 Billion USD he and his other two "compadres" from the failed Motor City want from the government a "Working Capital Bridge."

 

These 3 CEOs that flew into Washington, DC on their private jets have threatened law makers that if they are allowed to fail then 3 million jobs will go with them, ancillary industries like parts, and resources will fail as well, but don't touch the union job contracts!

 

What absolute arrogance!

 

Senator Harry Reid (NV-D) will put the vote off until the new SMDC comes into office after Jan. 20, 2009 when they do have the votes. Read this to mean that when we, the SMDC, take over, we can do what ever we want and you Republicans can't do a damn thing to stop us.

 

You think you have seen the markets slide today, wait until the inmates begin to run the asylum after January 20, 2009. I feel a real big ITYO (I told you so) coming in January.

 

 

The Generation of "Bread & Circus" has arrived

The USA is now completely divided without any hope for a reversal due to the split being felt along several fault lines. Unlike schisms in the past, these splits are along both the age, faith, cultural, and self-determination lines.

 

The baby boomers born between 1945 and 1965 were the last generation to be taught somewhat of a work ethic, self-responsibility, and self-determination. The X-generation born from 1965-1988 was the beginning of the entitlement generation where the baby-boomer parents were so busy with their own careers that many of them did not instill a work-ethic or self-discipline into their children. How do I know this? Personal experience.

 

I have been a small business owner for over 20 years, and I have had to hire and fire several youngsters who simply didn't understand that you have to show up for work, do your job and help your company contribute to the bottom line over and above what it costs to pay their salary and benefits.

 

They were never taught this! They think that money grows on trees. They don't understand that a company takes a risk in providing a product or service, hires employees that don't take a risk, and hope that the productivity of the employees is above what it costs to keep them employed. These kids are what I call the "MTV Generation."

 

Doesn't money just come in when you open your doors? Don't customers just come in with all kinds of money to buy your products and services? Don't I deserve more money even though I have no idea if I am helping the company to make a profit? What's profit anyway?

 

This generation has lost its sense of self-worth, self-determination, and self-reliance. They don't know that they are suppose to work hard, save, and increase one's value to their employer. They believe that employers are there to support them regardless if they cost more than they make for the company.

 

It's going to be the generation of "Bread & Circus," and the USA will follow the Roman Republic into the anneals of history as a country that lost its way and become too bloated, too soft, and too weak to survive. The Romans thought that they were invincible, but they forgot about the "enemy within."

 

Ask yourself: "Did I teach my children to be self-reliant, self-disciplined, and self-controlled, or did my kids learn their work philosophy from the public schools and TV?" If it is the former, your kids will be part of the "B&C" crowd, if not, then my hat is off to you.

 

The auto makers bail-out analogy story. Good Read!

Here's the analogy of why the Big-3 auto bail-out is going to backfire; in other words, what are the LOUC (law of unintentional consequences) of this bail-out?

 

The setting is a classroom. The teacher has announced the test tomorrow in math that was scheduled at the beginning of the semester. There are 12 students in the class: 3 are big bullies from old, money families that run the town, 3 are cousins of the Big-3 bullies, and then there is another student that part of their gang now of 6, the proverbial beta-male (look up the pack mentality of wolves to understand the reference), and then there a 5 non-aligned, smaller students from newer families that just moved to the town.

 

The Big-3, their cousins and enabler (that's 7) hear about the test, have heard about the test, but have decided not to worry about studying or getting ready. They are the Big-3, they have clout, they have standing, they have been around for a long time, they have family connections, they don't need to change or study since the teacher would NEVER fail them for fear of the consequences. Remember, she got her job because of their families' help and support. She owes them.

 

The 5 newer students know that they have to study, prepare, and get ready for the test since they don't have connections or family or lineage to fall back on if they don't do well on the test. They have devised ways to study better, be more creative in learning the material, gotten together to form study groups, get home at decent hours all to make sure they do well tomorrow.

 

After the teacher announces the test, the Big-3, their cousins, and enabler come running up to the teacher and complaining that they weren't told about the test, they haven't prepared, they haven't learned the material, and its too late to do anything meaningful to prepare for the test. They therefore tell the teacher that she can't have the test tomorrow or they will fail, they will not get a good grade, they will not be able to get into a good school, the town will have to pay for them to get welfare and extra mentoring. In other words, they have to get special treatment like a free 20pts on the exams tomorrow or the teacher and the town will be trouble.

 

The 5 outside students hear this and listen for the teacher's response which from the teacher's frown is saying that she understands and that she will probably give them the 20pts since she doesn't want them to fail, get a bad grade, and not get into a good school.

 

The 5 outside students then get angry and run up to the teacher and demand the same treatment or they will tell everyone in the town and they have her fired when her contract comes up for renewal. Since the teacher did not get her job by the support of the 5 students' families, she says that she can't do that since she can't give everyone a favor.

 

The test day comes, the Big-3, their cousins and enabler do poorly, the teacher adds 20pts to their test scores and they all pass until the next big test in 2 weeks. The 5 outside students get angry and quit studying, preparing, and finally some fail and are sent back a grade. The Big-3 and their companions are passed up to the next grade, and the outside students, now only 3, leave the town and move to other places where they are fairly treated taking their incomes and allowances with them. The town gets less money, has to raise taxes on those that remain in the town, and finally like Vallejo, CA, the town has to fill for bankruptcy in another year.

 

The 20pts only held off the day of reckoning for a year. The results were the same. The town failed, the old families had to go on welfare, and the 3 outside students and their families moved to other places and did much better since the students were more fairly treated.

 

This is the tale of the extra 20pt bail-out of the town called Detroit.

 

GET THE POINT????

 

US Senators and Postmaster General sweetheart mortgage deals

More and more Democrats that helped to block the increased scrutiny of the now failed GSE's are coming into the public eye as even the USPS (US Postal Service) is beginning its own internal investigation about its own Postmaster General John Potter supposedly receiving a Dodd-like sweetheart deal from the failed mortgage lender, Countrywide.

 

These follow on the heels of the Democratic-headed Congress' failure to investigate their own in the persons of Senator Chris Dodd (CT-D) and Senator Kent Concord (ND-D) both heading mortgage oversight positions in the US Senate committee structures. The Congress appears does not want to know if these Senators were recipients of such sweetheart deals to keep the heat off Countrywide Financial.

 

Countrywide VIP loan officer, Robert Feinberg, says that it was his job to make sure all his VIP clients were fully aware that they were receiving preferential treatment. This is very interesting since both Dodd and Conrad were/are in positions of oversight for commercial financial institutes and thus receiving sweetheart deals, well, you draw your own conclusions on why the Democratically-held Congress does not want hearings on this matter.

 

Again, here is "Change we need", "Change we can believe in", "Change we can trust" and all that nonsense.

 

Folks, you voted for BHO and now you have to live with the same old politics and corruption. Its just now going to be from the south-side of Chicago. ;-)

 

 

Economic solutions without costing $3 Trilion USD

So how could the $1.3-2.0 Trillion USD savings spelled out in the previous post on Government savings be spent to stop the recession and begin the recovery?

1. Since banks are hoarding the money given to them under the ESA 2008, the Government should immediately rescind all monies given to financial institutions and put back into place the following financial procedures:
• Re-enact Glass-Steagel Act
• Remove the "mark-to-market" FASB/SEC accounting rules for mortgage operations
• Re-enact the Resolution Trust Corporation
• Rescinding of BHCA of 1956 to allow private equity to purchase GSE assets
• Return to no paid interest on FRS required deposits by banks (reserves)
• Dissolution of GSE's with assets sold to private equity & mortgage operations
2. With the successful implementation of action #1, the Government without any expenditure of taxpayer funds have shown the banks that they will lose there place in the financial system to the Government since now the Government can take over foreclosed properties, auction them to the highest bidders or lease them to qualified investors.
3. Guarantee mortgages to qualified buyers with 10-20% down payment and proper income requirements via the FDIC-RTC operations.
4. Exchange regulation of and listing of all CDS (credit default swaps).
5. Changes in corporation board membership and operation to provide transparency
• The CEO and Chairman of the Board (COB) can not be invested in same person
• Internal auditor function must report directly to COB not CEO/COO/CFO
• Internal auditors' report summary must be made available to shareholders
• The Executive compensation must be annually approved by shareholders
• Option-based pay must be expensed annually as regular compensation
• Executive performance must be "pay for performance" based & implemented
• Golden parachutes must not exceed 3X average last 3 years compensation
6. No bail-outs for private companies. Normal bankruptcy laws must be implemented.
• Failed corporate business models must be left to bankruptcy procedures
• Union contracts must be broken and compassionately renegotiated
• Assets of failed companies sold to entrepreneurs and innovators (capitalism)
• No government ownership of private company equities.

These actions will not have costs the over $2.5-3.0 Trillion USD that the current government operations are now moving towards, left the US as a capitalistic country, and reduced the size of the government largely expanded via the inept actions of the Bush-43 and Republican/Democratic Congresses of the last 3 decades from 1976-2008.

Solutions are simple, but not easy to swallow since most people in the US are not of traditional character, ethics or discipline. They have been swilled a steady diet of governmental hand-outs, welfare, and intervention. The US population is quickly adopting a "bread & circus" mentality which is the beginning of the end of the USA.

US Government savings could prevent recession

So, what can the USA soon to become the USSA do to restore its economy before its becomes entirely a "give-me, give-me..." society that slides into socialism?

 

First, the USA/USSA needs to stop all foreign aid for a savings of about $40 Billion USD for 2008 and beyond.

 

Second, pull all remaining military forces out of Europe and the Middle East, and station 2 US Navy aircraft carriers, 1 off the coast of Israel/Syria, and 1 in the Gulf of Oman. The savings will be about $120 Billion USD per year since we are spending about $120 Billion USD in Afghanistan and Iraqi today, and the cost of maintaining the 2 US Navy aircraft carriers would be only $1 Billion USD per year.

 

The US Navy carriers (Nimitz class) could handle ANYTHING the middle eastern regimes could throw at either Israel or Iraq/Afghanistan.

 

The protection of Europe should be the interests of the EU (European Union) and Russia. When the 1989 demise of the Warsaw Pact occurred, the US should have left NATO since its need was no longer necessary. It would defused the current problem with Russia and Eastern Europe.

 

We could have helped the old-USSR breakaway provinces with economic, trade, and technology programs that would have done more to show Russia that we were not interested in humiliating them which I am sure they believe it happening now.

 

Third, we legislatively prohibit all ear-marks in Congressional spending bills. This alone would save over $40 Billion USD maybe more per year according to the TCS (Taxpayers for Common Sense) 2008 earmarks database.

 

Finally, prevent the remaining ESA 2008 bail-out monies from being spent which would save over $400-500 Billion USD and maybe as much as $1 Trillion USD.

 

All said, the savings could be from $1.3 to 2.0 Trillion USD which could be better spent at home. The next post will specify how to spend the savings to immediately stabilize the economy and get the recovery back on track.

 

Market swings today were breath-taking.

Today's market action was simply awe-inspiring!

 

To see the market do 500pt loop-to-loops not once, but three times was simply something amazing. The market began with a pull-back off yesterday's close that continued down to set new lows around 11:00AM. From there the market rallied over 50pts to set new highs [918] and began a 45 minute dump of over 50pts to set lower lows right before the market closed for the weekend.

 

These moves in the SP 500 translated to over 500 pts swings in the DOW and did it several times. I am sure there were more than a few brokers and hedge funds that were caught on the wrong side of the market and lost a ton.

 

The volatility today was something that does not occur often, but when it does, and you happen to be working the charts correctly, you can make some big bling. However, if you caught on the wrong side, you could have coughed up a bundle. Remember, most markets today require a mark-to-market accounting that means when the day is over you losses are removed from your account, and your winning are added.

 

Futures, options and Single-stock-futures are all Zero-sum games. This means that money is never lost in these markets simply moved around. New money in the form of new accounts or added capital to existing accounts is the only way that money is created or added to these markets. Zero-sum markets means the $1 USD I made on a trade to taken from someone else that was on the other side of the transaction, and vice versa.

 

So when you hear that people lost money today in the markets, that's simply a misunderstanding of the market operation. It would be more accurate to say, I loaned the market $X USD today, and tomorrow the market may loan it back to me. You only lose if you quit or loan all your money to the market.

 

Have a great weekend.

 

Consumers are confused and reducing their spending

Sorry, folks, today has been such a day of unbelievable nonsense from the BHO announcing that it wants to get a stimulus package that includes another huge bail-out for the auto industry and rebate checks to people who don't even pay taxes to the speech that Bush-43 tried to give spinning that "I am a free-market guy..."

 

It was a day where the markets again are gyrating to take out the LOY as discussed and then reverse themselves and run almost 60pts straight up on nothing but speech making while the unemployment picture gets more and more bleak.

 

The consumers are in all areas cutting back, pawning their personal items in unprecedented levels, reducing their spending across the board to where Christmas time could be the worse holiday spending period in decades. People are simply scared, tired, and confused about many things:

1. How Wall Street gets billions while Main Street gets the bill
2. How auto company employees get their fat pensions saved while people without pensions get the bill
3. How banks get saved from bankruptcy while they force some tax payers into bankruptcy by jacking their interest rates
4. How banks get low interest bail-out taxpayer monies while jacking fees and charges to customers
5. How 40% of citizens in the US don't pay taxes, but are going to get their "taxes cut" through rebate checks
6. How small businesses that generate over 85% of the jobs will tax rate hikes

 

Any reason why people are confused and are just going to "hunker down?"

 

 

Pelosi picks Barney to write auto bail-out bill

The Dems are just making this too easy!

 

Speaker Pelosi (CA-D) just announced that she will be picking Rep. Barney Frank (MA-D) to write the new bail-out plan for the auto industry!!! Unbelievable!

 

Barney Frank, excuse me, Rep. Barney Frank was the one that took over $60,000 from the GSE (Fannie Mae and Freddie Mac) before he said on national TV that they were fine and a solid investment in 2005! He also blocked the oversight legislation through maneuvering in the House that would have put the GSEs on a shorter leash.

 

Interestingly, this legislation was offered by Senator John McCain, and here you have the Congressman that was one of the major architects of this financial crisis now doing the auto industry bail-out bill to pay back his union supports.

 

Again, the liberal/Democrats are showing they are not better than the Republicans. As someone very wise and forthright said recently:

 

A POX ON BOTH YOUR HOUSES!

 

So down we go with the demons in the lead ;-)

 

More on AmEx hypocrisy and Dems will blame others

More updates on the banks and credit card companies that have received tax payer monies while raising interest rates on their customers.

 

Well, its official, American Express is sending out notices that everyone's interest rates are going up and are even going to retroactive on existing balances to over 14% while they are allowed to send their losses to the tax payer via the Treasury and become a holding company so they can get out of paying some of their debts. This company is the epitome of the LOUC of the government action.

 

The government bails out American Express with our money instead of letting them go under as their poor management and performance should have done, and then allowing them to put some of their customers into forced bankruptcy by raising their consumer debt retroactively. What a "turn around is NOT fair play!"

 

This is how the government intervention causes LOUC (law of unintended consequences) to occur when they do A and get B instead. The government can not be trusted when either in the Republican or Democrat is in control the White House and/or Congress. It does not matter. They are very much the same.

 

Even the failing oil prices are not going to change things since every one is getting told the economy is going to hell and have been told this for over 2 years by the Democrats were trying to gain the White House. Well they did, and now they are facing their worse nightmare:

 

THEY WON, AND NOW THEY HAVE TO PERFORM!

 

I am sure when they fail, they are going to blame on everyone else than themselves as they normally did and do. Remember they blamed Bush-43 for the 2000 recession when it started on Bill Clinton's watch in March of 2000 almost 10 months before Bush-43 took office.

 

When this economy continues to tank and is made worse by the Dems in both White House and Congress, they are going to blame it on Bush-43 as it started under his watch. It's his fault. Just be ready to hear it soon.

 

No, BHO & Congress will sink this economy

I take it back, BHO and his Congress (Pelosi/Reid) ARE going to make the financial crisis worse. Just listening to Speaker Pelosi talk about bailing out this industry and that industry is just silly, and also, she is saying that we don't need to support or allow off-shore drilling now that oil is < $65/barrel!!!!

 

What a nit! Pelosi is going to dray BHO and his legacy into the history books as another Hoover and FDR beginning the next big depression. Bowing to his supporters: labor (unions, education, government, etc.), old age (AARP), and others will make BHO do things that are just going to sink this already unstable economy into fits of depression (pun intended).

 

I don't think he will be able to stop these people that are going to demand satisfaction for supporting "the one." He tried tell everyone he was taking contributions from small investors via the untraceable Internet so he would not be owing them anything once he won the election.

 

Well, he did, and now he does! It's the same old Washington politics all over since those that supported him are the same old Washington political operators and they know how to play this game and are going to keep it going as long as possible.

 

BHO and Congress could make crisis worse

Here is the next shoe to drop on creating the next Depression. It is now the American labor unions that are asking BHO when he takes office to reduce free trade and raise international tariffs and fees. This is exactly what Herbert Hoover did with the Smoot-Hawley Act in 1930 even though President Hoover did not want to sign the bill and over 1028 economists wrote to Hoover and pleaded with him not to sign the bill.

Hoover did however, and the global trade market almost dropped by 25% over the next 3-5 years. Canada, the UK, and many European countries retaliated by raising their tariffs on American goods taking the world into a trade blockage war.

If things all come together we could have a similar situation with BHO having to payback the unions for their support in his successful campaign. While this will not do exactly the same thing as it did in 1930, it could severely impact trade around the world in an already unstable global economic picture.

Tread carefully, BHO and Congress, your next acts could make this financial situation worse.

What am I saying??? I expect them to do the wrong thing and to make it worse. It's almost inevitable.

Banks & credit card companies to raise rates HIGH!

Another stupid move coming by American banks is about to make its way into your homes forcing more and more Americans into financial problems. It is now understood that many banks and credit card companies are going to raise interest rates even when the Fed has lowered rates to 1% which has lowered prime rate in order to make more money.

 

However, these interest hikes on those that are paying their bills and making it are going to be thrown into financial default thereby causing a huge increase in credit card failures and possible bankruptcies where the banks are not likely to get anything from those that they throw into this perdicerment. Very strange.

 

Now the little disclosure that will make your blood boil: these are the very same banks that received a government bail-out using your tax payer money so you are effectively paying to have these banks raise your interest rates and cause defaults.

 

HA! This is America for you.

 

BHO and team are part of the problem not solution

Alright, talking about BHO and how he is going to change the USA into the USSA is becoming boring and too easy a topic since BHO's actions already are clearly showing that he is going to implement his agenda regardless of the current financial crisis.

 

His lineup of financial giants behind him on his Friday economic press conference shows that he doesn't have a clue about how to fix the crisis. All those on the platform behind him were from the school that brought the crisis upon us with maybe the exception of big-time BHO contributor: Eric Schmidt, CEO, Google. I am not sure why he is there since he is a techie and has very little training in public finance, ethics or Wall Street operations.

 

The others while they do have all this training, experience, and supposed intelligence all come from the government (Carter, and Clinton administrations) and Wall Street that didn't see this coming. Is this intelligence for change?

 

Where are the people that were calling for action on this problem before it happened, the Wall Street and government types who's voices where drowned out by the financial and political bureaucrats that were giving and taking money to keep oversight from the failed GSE's and the oversight into the CDS?

 

I am speaking of people like Dr. John Rutledge, for one, who is not a partisan, but understand finances and markets, or Billionaire Ross Wilbur who has given specific ideas on how to get out of the mortgage WITHOUT $1 of government money, or Bill Fleckenstein, of Fleckenstein Capital, who called for Fannie and Freddie oversight and investigations in 2004-2005.

 

None of these people were behind BHO since they did not contribute to his campaign or "stroke his ego." BHO is showing that his administration will be just another politics as usual: position for money, payback for contributions.

 

I don't believe BHO will solve this crisis any more than FDR did in 1932. You can't solve a financial problem caused by political meddling by more political meddling. The reasons for the crisis have already been discussed in this blog.

BHO talks more about his new dog than economy

BHO spent more time at his first press conference discussing the dog he will be getting his family than how will try and fix the economy. Not a very good showing for the first press conference of "the one."

Also, he said that the first priority of his administration will be the passage of another stimulus package that most economists think do not work. The first $160 Billion USD stimulus package, borrowed from mostly Chinese banks (the Chinese government), simply helped out China more than it did the US.

BHO did nothing to calm the markets in that he did not give any more specifics about what his administration is going to do to create jobs (a function that no government has been able to do unless they are government jobs), how he is going to ease the credit crisis (getting banks to lend the over $400 Billion USD they have accepted from the Treasury), or how he is going to increase confidence in the financial systems.

The markets lost over 5% this week even after the election day rally gave way to the largest post-election dump in history. Not a very good showing, BHO.

Financial crisis will not stop BHO & his agenda

What can people do that did not vote for nor like the current President-elect's proposed agenda? Is there anyway that traditional, conservative Americans can stop, delay, influence the manner in which the BHO and his Congress are saying they are going to take the country?

 

Well, I will tell you...

 

NOPE! We are screwed since until the 2010 elections, the White House and the Congress are in the hands of extreme liberals with a socialistic agenda. By that time, between the White House and Congress aided by an impotent Republican Party of misfits and cretins, this country will be taken down a road that may not be salvageable.

 

The country has voted to put a liberal/socialist in the White House and give him the support of an extremely liberal Congress which some conservative talk show hosts and financial talking heads say he will not be able to satisfy due to the current financial crisis.

 

Well, how wrong they are? BHO and his Congress will not let something like a crisis of money stop them in their planned agenda of installing politically active jurists in the 44 vacant Article III (that's Article III of the US Constitution) courts so that the appointees will sway the balance of power in these key judicial positions.

 

Next, the BHO and his Congress will do the following in their first 100 days:

• approve another "stimulus package" of $100-160 Billion USD
• hike the minimum wage to over $7.50 now
• extend unemployment benefits to a FULL YEAR
• allow the Bush-43 tax cuts to expire resulting in a tax hike on 43 million American families
• set time table for Iraqi theater US troops thereby telegraphing our intentions to the enemy
• pass "card-check" pro-union legislation to eliminate voting by secret ballot
• enact "cap and trade" legislation to hamstring the energy industry
• start Bush administration members investigations
• raise the capital gains tax to 20% and income tax brackets to 39% to begin in 2010
• increase financial system regulation and oversight which will be used to put social engineering agendas later on

 

These will be just some of the agenda items pushed by the BHO and his Congress in order to payback his supporters. The current financial crisis will not stop or deter BHO from his agenda, he has too many campaign promises to fulfill. The moderate Republicans and financial talking heads are simply WRONG.