Wednesday, September 30, 2009

$76.8 billion-is it helping?

Pro Publica,the liberal news site,has a tracking feature for bailout recipients.Michigan based companies have received $76.8 billion for its 14 recipients so far,or 13.4% of the total bailout funds.Here is the link.

We might as well tack on a couple more billion and balance the state budget while we're at it.More to come...

Congress is a crack dealer!

A good,industrious crack dealer gives away free samples to the neighborhood.People get addicted and then become perpetual customers.Sales is the basis for criminal industries as well as conventional business.Congress seems to follow this concept.

They bailout an industry such as banking,yet now they vilify it for having the audacity to make profits.Obama plays along publicly chastising the industry.Apparently they are supposed to make profits,just not too much,or they then become evil and greedy.

The execs at GM and Chrysler should shudder at the thought that they become profitable as they will then be attacked as the health care companies currently are.Of course,other industries have fallen prey to this stamp of evil previously.The tobacco industry comes to mind.

Wall St. gets berated in the press but this is simply for public consumption.Behind the scenes in the boardrooms,business is as usual.They are so entrenched with the politicians financially,they are insured of the status quo.New regulations and oversight will be announced with much fanfare,but the enforcers are part of the team.Sort of like having the fox watch over the henhouse.

In the future,the commodities markets will be overwhelmed by cap and trade credit traders.It will surely become the dominant player once the floodgates open up making oil look like small potatoes.Once the massive profits become common knowledge,they are sure to be classified as evil as well.

The only suckers in the whole process are the taxpayers.We sit on our porch and watch the addicts pay the dealers not realizing that they stole the money from us while we were sitting there watching the show.

This scenario is played out like an endless loop.The causes change.The reform targets change.The crisis will change.But the formula stays the same.Today it might be energy and healthcare.Tomorrow it might be social security and medicare.Climate change,education,poverty.Certainly the debt crisis will befall us.We will always be told that we need Government to solve it.

None of this is news to many.Yet,far too many more muddle along blindly believing in the system or simply ignorant to it.But,I like the Bernanke assessment.Green shoots.You can definitely see them and they are still growing.The version I like is the revolution,however.Obama will do his best to show the economy in a positive light despite the facts not supporting it.Consumer confidence is a key number he needs to validate his agenda and keep his political capital well stocked.If he can twist and distort the numbers just enough to keep the wolves at bay,he can fire up the weedeater to trim the green shoots.He doesn't need to keep the green shoots cut down like a putting green,just stop them from growing into a lush lawn.More to come...

Tuesday, September 29, 2009

Wishful thinkin'

I see that Sarah Palin has moved up her book release,'Going Rogue', to Nov. 17th.I'm hardly going out on a limb here,but I think this will be a huge seller,probably exceeding all expectations.She will feed off the momentum from recent releases from Mark Levin,'Liberty and Tyranny',Glenn Beck,'Common Sense' and Ron Pauls' 'End the Fed'.

People are craving this right now with the current state of discontent that is so prevalent.So I had this thought that would absolutely put the Libs over the edge.

Let's elect an all female administration.Here's a potential line-up.
President-Sarah Palin
Vice President-Michele Bachmann
Press Secretary-Ann Coulter
Secretary of Defense-Liz Cheney
Secretary of State-Michele Malkin
CIA Director-Hannah Giles
Civil Rights Director-Carrie Prejean

No other appointments would be necessary as the Libs would all flee for France.More to come...

Monday, September 21, 2009

A teachable moment is upon us

It appears we have another teachable moment upon us.The lesson is being delivered by Merriam-Webster.We seem to have a problem with 2 words-tax and recession.Here are the entries direct from the online dictionary.

Main Entry: 1tax
Pronunciation: \ˈtaks\
Function: transitive verb
Etymology: Middle English, to estimate, assess, tax, from Anglo-French taxer, from Medieval Latin taxare, from Latin, to feel, estimate, censure, frequentative of tangere to touch — more at tangent
Date: 14th century
1 : to assess or determine judicially the amount of (costs in a court action)2 : to levy a tax on3 obsolete : to enter (a name) in a list 4 : charge, accuse ; also : censure5 : to make onerous and rigorous demands on job taxed her strength>
— tax·able \ˈtak-sə-bəl\ adjective
— tax·er noun

Main Entry: 1re·ces·sion
Pronunciation: \ri-ˈse-shən\
Function: noun
Date: circa 1652
1 : the act or action of receding : withdrawal2 : a departing procession (as of clergy and choir at the end of a church service)3 : a period of reduced economic activity
— re·ces·sion·ary \-shə-ˌner-ē\ adjective

Tax is at the center of healthcare reform.Is forcing everyone to carry health insurance the equivalent of a tax?The President uses the argument that we all must carry auto insurance so that if we get in an accident,everyone else doesn't pick up the tab.Wrong.First,not everyone drives an auto and thus doesn't carry auto insurance so the apples to apples comparison is out the window.Second,insurance is simply a formula of risk/reward.You aren't mandated to carry collision coverage to repair your vehicle.You must carry liability on property damage and personal injury to protect yourself from a lawsuit should you injure someone else or damage property.Nowhere in that do you see the rest of society picking up the tab if you get in an accident.The comparison to health insurance in which an uninsured person requires care they can't pay for is paid by all other policy holders in the form of higher premiums.Again,no apples to apples comparison.

Even our income tax system doesn't compare as it only applies to wage earners.Should you receive benefits from a social program,you may be taxed depending upon the program.The point is there is no all encompassing program in existence in which every American adult pays something.This would qualify as the first one to force every single adult citizen to pay.So,in that respect,it's even worse than a tax.Should you be forced to buy insurance and be fortunate enough healthwise to never use the healthcare system,you would receive absolutely no benefit whatsoever.

Recession is another term that may need to be revisited.Generally,2 consecutive quarters of negative GDP growth qualifies as a recession.Just one quarter of positive GDP growth ends it.GDP is a measure of the goods and services produced.We know that we can have jobless recoveries.It's happened in the past and is happening now.Simply relying on the GDP number to determine the state of the economy in totality is folly.Look at what's not being accounted for when Bernanke tells us the recession is over "technically".The unemployment rate is still rising.The housing market is pitiful and hasn't bottomed,only paused awaiting the other shoe to drop.Commercial real estate is starting it's bubble bursting.Unsecured credit is still waiting in the wings for it's trigger to collapse.The dollar is tanking with international pressure mounting to replace it and our Fed policies will be the enablers to make it happen.The FDIC is about to tap it's line of credit.The banks are still saddled with their toxic assets on their books.The stock market is way overheated without merit and is unsustainable.Interest rates are still artificially being suppressed by the Fed.And of course the debt.We're accruing debt to pay on our debt.Like using one credit cards cash advance option to make the payment on another.

Obama is nowhere near done with his social overhaul of America so the debt is only going to worsen.Obama and Bernanke must speak in positive tones as our economy is 70% based on consumer spending.Consumer confidence must be positive.Americans need to spend and buy on credit for the Fed induced artificial economy to function.

There are many more negative numbers out there.No one with any semblance of integrity can simply ignore them and declare the recession is over.So,I guess we go back and revisit what the meaning of "is" is.Because tax and recession have been revised in the Obama revision of the dictionary.More to come...

Sunday, September 20, 2009

Here's an idea for you GM

It didn't take long for the desperation ads to begin at the new GM.The 60 day return policy is just throwing something up against the wall to see if it sticks.The script leaves me with a question."May the best car win" is the motto.They speak of satisfaction guaranteed and the fact that GM is putting their money where their mouth is.Why then does this program only run through Nov. 30th?

I actually like the ad and the spokesman is very convincing as a "trustworthy" convert to the new GM.But if this is the new direction and the GM execs are so sold on themselves,why is the program just another temporary sales promotion?

I would think if you want consumers to buy into the notion that this new GM has really changed and will be here for the long haul,you need to get away from the incentive based,temporary promotions.I mean,come on,you wrote off your debt and have the Government backing you.Why not put something out there groundbreaking to instill the type of confidence required?

Here's some free advice.You need customers for life to increase market share and insure stable long range forecasting.How about offering a program that will do just that.Buy a GM car.Agree to give it back after a predetermined number of years.Buy another GM car.In exchange,you would have received a substantial discount on your monthly payment.Don't buy another GM car and you are responsible for a balloon payment.Sounds like a lease?There are differences.No mileage or condition restrictions on your trade-in.You'll simply receive a fair market value based on it's condition and apply it toward your next car.GM can then dispose of it however they wish.With a lease,you simply turn the vehicle in and account for mileage and damage and are free to shop anywhere you wish.With this promotion,you would a strong incentive to buy another GM or face making that balloon payment.

The bean counters can work out the details on discounts and penalties.But the idea is to put fannies in a GM vehicle with the discounted monthly payment incentive and to let them experience the fact that GM is putting out a quality vehicle.That will make it a moot point at turn in time to buy GM again.They would have to be extremely disappointed to eat the balloon payment and shop elsewhere.That's my 2 cents anyway.More to come...

Monday, September 14, 2009

100 days has arrived-600,000 new jobs?

Tomorrow will be the 100th day since Obama made his pledge on June 8th that he would create 600,000 new jobs this summer.How'd we do?Fantastic!Exceeded estimates by far!We were just told that including the original 150,000 the stimulus saved or created,we have now surpassed the 1 million mark!This is great news!

Nice to see your friends,family and neighbors are all going back to work,gas prices are still relatively low,mortgage rates are way low,the stock market is jammin'.Nothing but blue skies.There,I've promised to try to be more positive and now I've done it.

Friday, September 11, 2009

Reclusive Detroit tycoon stepping aside?

This story broke on Muckety

Detroit’s quiet tycoon steps into limelight
By Laurie Bennett
September 9, 2009 at 9:44am
For someone who’s almost fanatical about his privacy, who’s doing business in a city with a surfeit of news and a dwindling supply of journalists, Detroit billionaire Manuel “Matty” Moroun sure is grabbing a lot of headlines.
Moroun owns the Ambassador Bridge, which connects Detroit with Windsor, Ontario, and carries an estimated one-fourth of the commercial traffic between the U.S. and Canada. He also presides over a complex conglomerate of trucking, real estate and insurance interests based in suburban Detroit but with worldwide reach.
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Moroun is known as a steely competitor who built an empire through aggressive acquisitions. Starting with Central Cartage, the trucking firm owned by his father, Moroun snatched up foundering truck companies. He purchased the bridge in 1979, and then bought up much of the surrounding Mexican-American neighborhood of Detroit to expand bridge operations.
In March, Forbes ranked Moroun as No. 701 on the world billionaires list, putting his worth at $1 billion. However, Moroun confounds attempts to pinpoint the size his fortune. Most of his tangled network of corporations is privately held. He tends to dissolve and reorganize companies, changing names slightly or resuscitating names of previous ventures.
Now 81, Moroun has been grooming his son Matthew as his successor. The younger Moroun, 35, chairs two publicly traded companies - P.A.M. Transportation Services and Universal Truckload Services. When Universal went public in 2005, the Morouns reportedly raked in $50 million.
But there’s new competition on the horizon, and the elder Moroun has stepped into a more public role.
A project called the Detroit River International Crossing, which is a partnership of American and Canadian federal governments, the state of Michigan and the province of Ontario, calls for construction of a new bridge about a mile south of the Ambassador Bridge.
Moroun, who wants to build a twin span next to the Ambassador, has sued the Federal Highway Administration to block the crossing project, saying it would reduce traffic on his bridge by 50 to 75 percent.
He has also sought help from Rep. Carolyn Cheeks Kilpatrick of Detroit, who is a member of the House Appropriations Committee. And he has paired up with a political consultant named Adolph Mongo, who is pushing for the recall of a Michigan state representative who supports the new crossing.
Planning for the government project, meanwhile, continues. As does the news coverage of the normally secretive Matty Moroun.

A new buzzword to learn

It's always a challenge for us lay people to keep up with terminology.We now have a new addition to the list.Re-Remic.Learn it.Live it.Love it.

It stands for "resecuritization of real estate mortgage investment conduits".This is the lipstick on the pig for the toxic debt that brought about the housing industry collapse.Remember CDO's,or collaterized debt obligations?We had to learn that one as well.All of these financial vehicles are simply ways to repackage risky debt and make it attractive to investors.Toss in a willing accomplice in the form of a bond rating agency that will rate it "AAA" and we're off and running again down the road to re-inflating the housing bubble.

Now,they mix in some good mortgages with the bad to spread the risk.In theory,those buying the riskiest bets are made aware of this and realize they get paid last.Gee,wasn't that the way it was supposed to work with the automaker bankruptcies?Except that the senior bondholders were thrown out on the keesters thanks to Obama.

At any rate,let's give the benefit of the doubt just for arguments sake.Let's say everyone knows what they're buying.Fine.Can someone explain to me how that reduces the risk?The only difference between now and prior to the bubble collapse is awareness of risk.We had pension funds and local governments worldwide investing in what they thought were safe bets due to the AAA ratings.Now these same investors will know that are buying the same old toxic debt that was never flushed out and removed from the books of these mortgage holding entities.And if these homeowners can't make their mortgage payments,the system collapses again.Only this time,investors should feel better knowing ahead of time that are losing their retirements with eyes wide open.Payday has to happen.The toxic debt must be removed from the system for it to ever heal.

We now know that it's not the subprime mortgages defaulting these days.It's the good mortgages failing due to unemployment.Unemployment is still climbing and projected to remain in double digits for years by everyone.So,it doesn't take a rocket scientist to see that the defaults will continue to escalate and trigger the next wave.And this doesn't even take into account the commercial mortgage crisis which is still awaiting.Do yourself a favor and read Harry Dents' "Great Depression Ahead".He predicted all of this ahead of time and it's falling into place quite nicely.More to come...

Sunday, September 6, 2009

Van Jones-R.I.P.

So,Van Jones slinks away so as not to be a disruption,he claims.Strange,he is in full blown denial about the claims against him and also claims to being overwhelmed with supporters encouraging him to fight on.I guess that makes him a quitter like Sarah Palin,right Libs?It's got to be tough to try to defend your stance when it's simply your own words being used against you.

At any rate,it's a small victory against the Chicago machine,so we'll take it.Particularly when it riles up the far left progressives.Just read a few of their blogs.They are hot.How can you own CBS,ABC,NBC,MSNBC,CNN,PBS,The New York Times,The Washington Post,The Boston Globe,The L.A. Times,The Associated Press,Reuters,both Houses of Congress,The White House,the Judicial system,the E.P.A.,the unions,have a massive non-profit funding network to funnel public dollars thru and still not be able to deliver on your agenda with ease?If this doesn't expose the weakness of the message,nothing will.I'll bet Chris Matthews,ala Hardball,is still getting that tingle down his leg.The difference now is it's simply his prostate medication working a little too well.

Friday, September 4, 2009


Apparently a solar flare has affected Joe Bidens' job creation calculator again.Now it's between 500,000 and 1,000,000 jobs saved due to the stimulus.Nice job narrowing that down to an error range of half a million jobs,Joe.Let's review,shall we?

Obama stated his goal for the stimulus was to create or save 3,675,000 jobs by the end of 2010.To be specific,total non-farm payroll employment was to go from 133,876,000 to 137,550,000.The range was to be between 3.3 and 4.1 million.He also predicted a rise in GDP of 3.7% from $11.77 trillion to $12.203 trillion.

He even released this silly chart showing that unemployment would be at 7% after 5 years with or without the stimulus.It's been updated,courtesy of innocent bystander,to reflect the actual numbers.Is it just me,or does that say that even if we didn't pass the stimulus,the result would be the same?

Currently,we have a total non-farm employment number of 131,223,000.This means we have lost 2,653,000 since the stimulus was passed.So,we only need to make up 6,327,000 jobs by the end of September,2010.

Joe,my man,are you listening?The highest unemployment rate in 26 years,now at 9.7%.The highest teen rate ever recorded,at 25.5%.The highest ever marginal rate,at 16.8%.216,000 more jobs shed in August.We now have 14.9 million unemployed total,not including any marginally employed.All the numbers have exceeded your worst case estimates by far.Yet,you stand there with a straight face and tell us the stimulus is working?Please keep in mind that we must create 127,000 jobs per month simply to keep pace with the population growth in this country so even at the starting line we have a handicap of 127,000 jobs per month.

You claimed 150,000 saved back in the spring.You claimed 600,000 more would be created in the 100 days of summer.Tomorrow will be day 90 since the June 8th announcement,meaning we should be at 540,000,or 690,000 total due to the stimulus.

Care for some credibility?Identify these 690,000 jobs that have been saved.We know they weren't created,so they must have been saved.Which industries?Which companies?And most important of all,which specific parts of the stimulus plan were responsible for saving those jobs?Certainly,you must know this information or you couldn't make the claim,right?I mean,the salt marsh mouse in Pelosi's backyard must have jobs tied to it.The checks sent to the prisoners must have ties somewhere.Gee,what if you ever get an audit,shouldn't you know this stuff?

All right,I've had my fun.We all know that Biden is just an idiot and he's lying to anyone who will listen.Just wait until September,2010 when we hear how bad it would have been if not for the stimulus.More to come...

Thursday, September 3, 2009

Opportunity is knocking

Michigan is finally on the brink of breaking free from the tired,regressive policies of the Granholm era.Suffice it to say if the Republicans can't step up and take back the state this go-round,well,I really don't want to think about that.Instead,we just need to get behind the Conservative that will lay out a plan with boldness and conviction.Who is this person?I've got to be honest,the jury is still out.

So,how about a few suggestions for the contenders.First,more of the same is obviously where we don't want to go.I would skip the band-aid approach thinking that we simply need to tweak things to turn it around.It's time to clean house and work with a clean slate.The people have spoken and want change,just not the Obama version.

Without question,the economy tops the list.The best place to start?Scrap the MEDC and MEGA.They are batting less than 30% on delivering the jobs that are announced.Nobody likes a taxcut more than me,but the results have to be there to realize the benefit of reducing the tax rate.The biggest reason I see is that the target industries are wrong.The film industry?High profile but low results.The goal is to generate growth and expansion locally,not sending the profits back to Hollywood.Employment numbers are minimal for shooting a film and there is no residual value.Once production wraps,the sets and crew are gone.We need to incentivize industry growth that creates a sustainable employment base after the investment is made.

I've always been a proponent of making our business tax rate too expensive for businesses to pass up.It must be clearly more expensive for them to take their business to other states or countries than it is to bring it here.Just like the commercial for the scrap metal guy on the radio where he says,"if you don't bring your scrap metals to me,we both lose money".The difference here is a permanent low tax rate as opposed to an incentive based program which businesses realize is only temporary.Study your history of economics and the results are clear.Low tax rates lead to increased tax revenue.This is the result of success as businesses have the required capital to expand and invest due to the low tax burden.The winners extend up the entire chain from the workers to the employers to the good old tax collector.

Regulation is another key expense.We must have regulation to protect the consumer.Shady characters abound and would thrive without regulation.But,excessive regulation is a huge expense.Things like duplicate regulations at different levels of government.Look at the hoops the car dealers are having to jump thru just to submit a clunker deal.And they are still waiting for their money which is death for a high cash flow business.We hear the call to drill for oil off our shores.The red tape would turn this into a multi-year debacle to get any significant volume of oil flowing.

Entitlement programs are a massive strain on the state's budget.With our highest in the nation unemployment rate,we are particularly hard-hit.The call is to extend jobless benefits even further.Providing Medicare and SS to the sick and elderly is more or less an act of compassion from the taxpayer and certainly isn't going away regardless.I have to wonder about unemployment.Thinking outside the box may not be popular here,but with benefits now exceeding a year,would it be unreasonable to expect something in return for these benefits?These aren't the sick or the too old to work and we know that nobody is putting in 40 hours on a job search because we don't have any jobs to search for,remember?Why can't these people on the receiving end perform some level of community service in exchange for the benefits?Certainly,there must be things that are worthy that the funding isn't there for.It may make those that normally would decide to stay on the rolls until their benefits are exhausted to be a little more pro-active in their job hunting.

Just a few thoughts on moving significantly away from the course we are now on.More to come...