The Observer was born on December 4,2008.After 336 posts,it will now be put out to pasture.
A little background.I created this blog to essentially be a diary.In the fall of 2008,I found myself a bit overwhelmed as to what was happening with the economic meltdown.For far too many years,I did as so many others do.Just live each day whistling dixie without a care about global events.Workin' and playin' and raising a family.Ignorance is only bliss to a certain point.
I remember being mystified as to what was happening when the economic 911 hit that year.How could our entire economy implode almost overnight?Of course,when you rely on the mainstream news for your info,you have no chance of ever understanding what's really happening.
So,I dedicated myself to researching what happened.It starts with understanding the Constitution and a whole new world opens up after that.It quickly dawned on me that I had alot to learn.That led to finding a way to take notes on what I was learning and the result was the Observer.A perfect way to put your thoughts and opinions down.
I'm certainly different compared to the average blogger out there.Most are committed to gaining as many followers as possible,while this never motivated me.I didn't want to get stuck in that trap of always being concerned with site traffic and how to get my blog linked to yet another.Kinda like betting on sports.It takes the fun out of it for me when I'm watching the end of a game only concerned with the final score beating the spread.
Again,I realize I'm not the norm here and I don't have any problem with those that have different motivations for blogging.The point is that I accomplished what I set out to do.I have learned much and got to throw out my two cents on a variety of topics.
I haven't yet decided where I will go from here.I'm looking at creating a new blog that will focus more on in-depth,magazine style investigative reporting.Lord knows,there are more than enough bloggers out there covering current events.Fact is,I simply don't have the time to keep up posting on any type of regular basis.Certainly,I could keep on posting my opinion on the endless opportunities provided by Obama and his charade.I just think I would prefer to explore other avenues at this point.
So,thank those of you who have linked or commented in the past.Much appreciated.A very special thanks to Steve at the Motor City Times.He has gone way above and beyond in linking to my blog without reciprocity since the beginning.I encourage everyone to check him out everyday as he does a great job of linking and posting on topical events.I will post a link here when I decide on what's next for me.
No more to come!
Friday, May 21, 2010
Sunday, May 16, 2010
Dio-did he choose Heaven or Hell?
Heavy metal heavyweight Ronnie James Dio is dead from stomach cancer at age 67.Here is the link to the story.
http://www.breitbart.com/article.php?id=D9FO5PJO1&show_article=1
Here is a sampling of his hits.
More to come...
http://www.breitbart.com/article.php?id=D9FO5PJO1&show_article=1
Here is a sampling of his hits.
More to come...
Saturday, May 15, 2010
Austerity in America
Austerity.One of those words you probably had to look up in the dictionary until recently.The Greek financial crisis has made it a household word lately.In short,it means that once a countries debt to GDP ratio exceeds a certain limit,their bond rating is cut forcing them to adopt strict measures of higher taxes,reduced spending,and diminished entitlements for its citizens.
It also means that the citizens pay the price for irresponsible government spending since that is what gets a country into this position to begin with.Usually,it leads to violence such as is occurring in Greece today.The main reason is because government employees and unions are forced to accept reduced pay,pension and health care benefits to help balance the budget.You then get the resulting strikes and protests leading to things like burning banks.
It's coming to your neighborhood.Write it down.Guaranteed.Checks in the mail.You can't stop it.The reason you can't stop it is that you can't stop your government from continuing their irresponsible spending policies.Drunk with power,they simply cannot stop themselves from spending our taxpayer dollars to save us from ourselves.
What can we expect to see and when?You can relax somewhat as it won't happen this year as an election is upcoming in November.However,December 1st is the deadline date for the Obama commission set up to find ways to reduce the debt.This is the out for Obama.The recommendations will come from the commission and poor Obama will merely be acting on their suggestions.Here are a few things you'll see.
•Extend the retirement age for social security benefits.
•Cut Medicaid and Medicare services and reimbursements.
•Institute a valued added tax (VAT) - a national tax applied to every economic transaction in the country.
•Require all wage earners to deposit a minimum of 2% of their pay into mandatory savings accounts.
•Require a percentage of the funds in IRA's, 401K and new mandatory savings accounts to be held in US Treasuries. (As the smart money bails on US Treasury auctions, Americans will be forced to buy their own toxic debt.)
The key point is this.Spending cuts will be borne by the poor because they are the segment of society receiving the bulk of benefits.There will be a huge public backlash as we are now seeing in California.The same thing happens when tax cuts are announced.They are always promoted as tax cuts for the rich.Reason being is that these are the people who pay the bulk of the taxes so of course they benefit the most from any tax cuts.
Greece is a walk in the park.We would only need to shut down the federal government for a portion of one day to reduce spending enough to cover the Greek debt.If you'll remember,we already did that over the winter when a snowstorm forced D.C. to halt.We like to deal in debt in the trillions rather than those pesky billions.
It's too late.The train has left the station.Our debt is too great.Our spending is insatiable.The census bureau predicts we will add another 100 million citizens by the year 2050.Amnesty is on the table today to add millions of illegal immigrants.Does anyone think that the number won't explode from the reported 12 million once the illegals get wind of amnesty passage?
You can just plod along with your head in the sand if you think this will never happen here.Not in the greatest country in the world,right?If you aren't ignorant to what's coming and have the means,please take the time now to make preparations.Once the violence starts,martial law will be sure to be enacted at some point.Then your options will be eliminated.You'll also have to watch your back every minute as your neighbors who are worse off than you will be faced with desperation.No one is safe in that scenario.More to come...
It also means that the citizens pay the price for irresponsible government spending since that is what gets a country into this position to begin with.Usually,it leads to violence such as is occurring in Greece today.The main reason is because government employees and unions are forced to accept reduced pay,pension and health care benefits to help balance the budget.You then get the resulting strikes and protests leading to things like burning banks.
It's coming to your neighborhood.Write it down.Guaranteed.Checks in the mail.You can't stop it.The reason you can't stop it is that you can't stop your government from continuing their irresponsible spending policies.Drunk with power,they simply cannot stop themselves from spending our taxpayer dollars to save us from ourselves.
What can we expect to see and when?You can relax somewhat as it won't happen this year as an election is upcoming in November.However,December 1st is the deadline date for the Obama commission set up to find ways to reduce the debt.This is the out for Obama.The recommendations will come from the commission and poor Obama will merely be acting on their suggestions.Here are a few things you'll see.
•Extend the retirement age for social security benefits.
•Cut Medicaid and Medicare services and reimbursements.
•Institute a valued added tax (VAT) - a national tax applied to every economic transaction in the country.
•Require all wage earners to deposit a minimum of 2% of their pay into mandatory savings accounts.
•Require a percentage of the funds in IRA's, 401K and new mandatory savings accounts to be held in US Treasuries. (As the smart money bails on US Treasury auctions, Americans will be forced to buy their own toxic debt.)
The key point is this.Spending cuts will be borne by the poor because they are the segment of society receiving the bulk of benefits.There will be a huge public backlash as we are now seeing in California.The same thing happens when tax cuts are announced.They are always promoted as tax cuts for the rich.Reason being is that these are the people who pay the bulk of the taxes so of course they benefit the most from any tax cuts.
Greece is a walk in the park.We would only need to shut down the federal government for a portion of one day to reduce spending enough to cover the Greek debt.If you'll remember,we already did that over the winter when a snowstorm forced D.C. to halt.We like to deal in debt in the trillions rather than those pesky billions.
It's too late.The train has left the station.Our debt is too great.Our spending is insatiable.The census bureau predicts we will add another 100 million citizens by the year 2050.Amnesty is on the table today to add millions of illegal immigrants.Does anyone think that the number won't explode from the reported 12 million once the illegals get wind of amnesty passage?
You can just plod along with your head in the sand if you think this will never happen here.Not in the greatest country in the world,right?If you aren't ignorant to what's coming and have the means,please take the time now to make preparations.Once the violence starts,martial law will be sure to be enacted at some point.Then your options will be eliminated.You'll also have to watch your back every minute as your neighbors who are worse off than you will be faced with desperation.No one is safe in that scenario.More to come...
Monday, May 10, 2010
The State of Europe
It is now official.The European Union has now morphed into one single entity with 27 individual states.Sort of.With the actions taken over the weekend by the Eurozone to prop up the Euro,the European currency,they have effectively set up a national government structure not unlike our own.
In effect,the former individual countries of Europe had their own unique identities which are no no different than traveling from Ohio to Kentucky.You've merely crossed a state line,big deal.Of course,they will vehemently deny this is the case.It will take many years,and probably decades,for this to simply be accepted.
What you will see are transformative changes that all 27 members of the EU must accept or face being shut out from the permanent bailout fund now in place.Even though Germany was in the strongest position financially today,they also caved in so as to not waste the last half century's work in building up the Euro.
In essence,a new superpower has been born.The GDP of this new superpower is over $16 trillion dollars,making it the largest in the world.The U.S. now plays second fiddle at around $14 trillion.Europe has over 500 million citizens.
You may say,wait,what is the Eurozone?It comprises 16 member countries that use the Euro as their primary currency.These are the members that voted on the bailout package of nearly $1 trillion dollars over the weekend.What you'll see occur,however,is pressure for the other members of the European Union to fall in line and adopt the Euro.That's why I say this will take years or decades to fully implement.The European Union has already been evolving in this manner since its inception in 1993.The Eurozone will now follow suit.
What does this mean?Nothing good.But that will come later,probably years.But the groundwork has now been laid to expand the same bubble/bailout mentality across the entire continent of Europe as we have here in the United States.Meaning the crashes will be even larger with no one left to bailout the State of Europe.Also meaning the crashes from either side of the pond will be catastrophic as our global economy is now more intertwined than ever before.Hang on for the wildest ride the globe has ever seen.
Some will question whether Europe has now moved toward a more federal,state structure like the U.S. or if the Euro will crash.Take it to the bank that the Euro will crash.Will it be this year or many years no one knows.But the EU has taken the first necessary step to guarantee its demise.
However,today we will hear nothing of the sort.The stock markets will soar across the globe.Economists will crow about this being long overdue and that Europe is finally standing fully behind its Euro.No one can predict accurately when it will all come crashing down.We have history as our guide to illustrate the exact mistakes that will occur as the era of printing press fiat money has now come to the Euro.More to come...
Michigan Senate GOP ready to cave on school pensions
For the usual top notch reporting on financial issues in the state of Michigan,where do you go?The Michigan Capitol Confidential,of course.
Analysis: Senate GOP Fumbles, May Approve $25.9 Billion Taxpayer Liability to Satisfy MEABy Jack McHugh | May 10, 2010
Negotiations are continuing between the Republican majority in the Michigan Senate and House Democrats on a modest school pension reform proposal recommended by Gov. Jennifer Granholm to help balance next year's budget. Late reports suggest that GOP Senators may be ready to surrender on one particular demand from the Michigan Education Association that could load a new $25.9 billion liability onto taxpayers.
That's the amount the state would have to set aside to cover future school employee health care benefits under a union-supported provision. Unlike pensions, these benefits can be altered at will by the state and so under current law are not considered enforceable obligations. The MEA is demanding the law be amended in a way that, in effect, would convert them into real liabilities on the state.
Senate Republicans dealt themselves a weak hand for these negotiations beginning in March, when they took up their own version of Gov. Granholm's proposal. As described in Capitol Confidential at the time, several GOP Senators who have been recipients of MEA campaign cash and endorsements caused the removal of several reforms recommended by the Governor but opposed by the union.
This was unfortunate, because the measure cannot become law unless it is also approved by the MEA-friendly Democrats who control the House. Anticipating tough bargaining to come, rather than "negotiate with themselves" the Senate majority should have been staking out the strongest possible bargaining position. By doing just the opposite, GOP Senators ensured that the ultimate price for any reform would be much higher. Perhaps so high that the final bill is not worth adopting.
That's what appears to be happening now. In the words of Senate Majority Leader Mike Bishop, House Democrats have received their "marching orders" from the experienced teacher's union negotiators. Predictably, they not only tossed out all but one of the proposed reforms, but also loaded up the measure with "poison pill" anti-reforms. (See sidebar below for a full list of each side's provisions.)
Some of these House additions were "throw-aways," bargaining chips the MEA didn't really expect to get but could nevertheless use to cancel out something the other side wanted. A provision to force charter schools to enroll their employees in the underfunded defined-benefits pension system probably was one of these.
Other items appear to be real demands that carry huge long-term price tags, especially the one converting the non-obligation of retiree health benefits into an enforceable obligation and genuine taxpayer liability. As the process has unfolded it has become apparent that this is the real "pound of flesh" the MEA is demanding as the price of a modest 3 percent increase in employee pension contributions, which was the centerpiece of Gov. Granholm's original proposal.
The MEA is probably the most politically powerful special interest in this state. It all but "owns" the Democratic majority in the state House, and has a partial stake in the Republican-controlled Senate majority caucus as well. The union is also a world-class bargaining-table champ, for decades having rolled-over the amateur school boards of Michigan's 551 school districts, securing fringe benefits that far exceed private sector norms, and salaries that now make our teachers the highest paid in the nation relative to the income of the state taxpayers who support their salaries.
Compared to the MEA's bargaining savvy, the political careerists who comprise the Senate Republican caucus are relative amateurs at this game. That would explain late reports suggesting that they may now be negotiating the terms of a surrender of the state's flexibility in altering retiree health benefits — a provision that was not part of Gov. Granholm's original proposal.
GOP Senators will probably challenge this characterization, but statements suggesting that the measure will probably get more votes from Senate Democrats than Republicans undercuts their denials.
~~~~~~~~~~~~~
Sidebar: Blow-By-Blow of Pension Reform Negotiations
January 29: Gov. Jennifer Granholm proposes a modest pension reform package for school employees that includes:
•Increase of 3 percent in employee pension contributions
•Boost by 6.6 percent the cash pension benefits of eligible employees who retire this summer (which saves money [in the short term] by replacing high-salary veterans with [initially] lower-paid new hires)
•Prohibit employees from accumulating more than 30 years of service credit toward the calculation of their pension allowance, starting on Oct. 1, 2010
•Eliminate post-retirement vision and dental coverage for school employees who retire after Oct. 1, 2010
•Increase the retirement age for newly-hired school employees (but not replace the traditional "defined benefits" system with a defined-contribution 401[k] one)
March/Early April: Senate Republicans initially favor a substitute that contained all the governor's provisions except for the 6.6 percent early retirement "sweetener." However, as described in the April 2 Capitol Confidential, several GOP senators who have been the beneficiaries of MEA campaign cash and endorsements balked (see "School Pension Reform Stalls in Senate"). After weeks of "negotiating with itself," Senate Republicans finally agreed to, and the Senate passed, a bill that contained the following (bold print indicates rejected items or new demands):
•Increase of 3 percent in employee pension contributions
•NO 6.6 percent boost in cash pension benefits for eligible employees who retire this summer
•NO cap on the number of years employees can accumulate pension-boosting service credits
•NO elimination of post-retirement vision and dental coverage
•Increase the retirement age for newly-hired school employees
April 27: House Democrats reject the Senate version, and with just one Republican vote, pass one with the following:
•Increase of 3 percent in employee pension contributions
•13.3 percent boost the cash pension benefits of eligible employees who retire this summer
•NO cap on the number of years employees can accumulate pension-boosting service credits
•NO elimination of post-retirement vision and dental coverage
•NO increase the retirement age for newly-hired school employees
•Reduce the eligibility standard for the early retirement pension enhancement
•Force all charter school employees into the regular schools' defined benefit pension system, requiring charter operators to pay assessments that could force many to close their doors •Also force outside contractors who provide non-instructional services such as transportation, custodial and food services into the defined benefit pension system
•Allow some of the teachers who retire early to "double dip," collecting both a monthly pension and a paycheck for part-time work in the schools •Deposit the increased employee pension fund contributions into a segregated "irrevocable" trust fund to be used exclusively to pay retiree health benefits (rather than use the money to reduce school district contributions or bolster the underfunded pension fund), and declare these benefits to be contractual obligations
April 27 to Present: The Senate promptly rejected the House-passed version, and both sides appointed members to a conference committee to work out the differences. The current state of play is a moving target, but the latest reports indicate that the House has dropped the charter school provision, and is willing to dicker on the size and scope of the early retirement pension enhancement, but is fighting for health care prefunding and forcing third party school service contract employees into the pension system.
The Senate is also willing to dicker on the early-out pension enhancement, and may surrender on the health care trust fund in return for language stating that "in the aggregate" school retirees do have a contractual right to health care benefits, but not as individuals. What effect the distinction would make is unknown, besides assuring class action lawsuits rather than individual ones in the event of any benefits "haircuts." Either way, taxpayers would be on the hook for a new $25.9 billion liability.
More to come...
Analysis: Senate GOP Fumbles, May Approve $25.9 Billion Taxpayer Liability to Satisfy MEABy Jack McHugh | May 10, 2010
Negotiations are continuing between the Republican majority in the Michigan Senate and House Democrats on a modest school pension reform proposal recommended by Gov. Jennifer Granholm to help balance next year's budget. Late reports suggest that GOP Senators may be ready to surrender on one particular demand from the Michigan Education Association that could load a new $25.9 billion liability onto taxpayers.
That's the amount the state would have to set aside to cover future school employee health care benefits under a union-supported provision. Unlike pensions, these benefits can be altered at will by the state and so under current law are not considered enforceable obligations. The MEA is demanding the law be amended in a way that, in effect, would convert them into real liabilities on the state.
Senate Republicans dealt themselves a weak hand for these negotiations beginning in March, when they took up their own version of Gov. Granholm's proposal. As described in Capitol Confidential at the time, several GOP Senators who have been recipients of MEA campaign cash and endorsements caused the removal of several reforms recommended by the Governor but opposed by the union.
This was unfortunate, because the measure cannot become law unless it is also approved by the MEA-friendly Democrats who control the House. Anticipating tough bargaining to come, rather than "negotiate with themselves" the Senate majority should have been staking out the strongest possible bargaining position. By doing just the opposite, GOP Senators ensured that the ultimate price for any reform would be much higher. Perhaps so high that the final bill is not worth adopting.
That's what appears to be happening now. In the words of Senate Majority Leader Mike Bishop, House Democrats have received their "marching orders" from the experienced teacher's union negotiators. Predictably, they not only tossed out all but one of the proposed reforms, but also loaded up the measure with "poison pill" anti-reforms. (See sidebar below for a full list of each side's provisions.)
Some of these House additions were "throw-aways," bargaining chips the MEA didn't really expect to get but could nevertheless use to cancel out something the other side wanted. A provision to force charter schools to enroll their employees in the underfunded defined-benefits pension system probably was one of these.
Other items appear to be real demands that carry huge long-term price tags, especially the one converting the non-obligation of retiree health benefits into an enforceable obligation and genuine taxpayer liability. As the process has unfolded it has become apparent that this is the real "pound of flesh" the MEA is demanding as the price of a modest 3 percent increase in employee pension contributions, which was the centerpiece of Gov. Granholm's original proposal.
The MEA is probably the most politically powerful special interest in this state. It all but "owns" the Democratic majority in the state House, and has a partial stake in the Republican-controlled Senate majority caucus as well. The union is also a world-class bargaining-table champ, for decades having rolled-over the amateur school boards of Michigan's 551 school districts, securing fringe benefits that far exceed private sector norms, and salaries that now make our teachers the highest paid in the nation relative to the income of the state taxpayers who support their salaries.
Compared to the MEA's bargaining savvy, the political careerists who comprise the Senate Republican caucus are relative amateurs at this game. That would explain late reports suggesting that they may now be negotiating the terms of a surrender of the state's flexibility in altering retiree health benefits — a provision that was not part of Gov. Granholm's original proposal.
GOP Senators will probably challenge this characterization, but statements suggesting that the measure will probably get more votes from Senate Democrats than Republicans undercuts their denials.
~~~~~~~~~~~~~
Sidebar: Blow-By-Blow of Pension Reform Negotiations
January 29: Gov. Jennifer Granholm proposes a modest pension reform package for school employees that includes:
•Increase of 3 percent in employee pension contributions
•Boost by 6.6 percent the cash pension benefits of eligible employees who retire this summer (which saves money [in the short term] by replacing high-salary veterans with [initially] lower-paid new hires)
•Prohibit employees from accumulating more than 30 years of service credit toward the calculation of their pension allowance, starting on Oct. 1, 2010
•Eliminate post-retirement vision and dental coverage for school employees who retire after Oct. 1, 2010
•Increase the retirement age for newly-hired school employees (but not replace the traditional "defined benefits" system with a defined-contribution 401[k] one)
March/Early April: Senate Republicans initially favor a substitute that contained all the governor's provisions except for the 6.6 percent early retirement "sweetener." However, as described in the April 2 Capitol Confidential, several GOP senators who have been the beneficiaries of MEA campaign cash and endorsements balked (see "School Pension Reform Stalls in Senate"). After weeks of "negotiating with itself," Senate Republicans finally agreed to, and the Senate passed, a bill that contained the following (bold print indicates rejected items or new demands):
•Increase of 3 percent in employee pension contributions
•NO 6.6 percent boost in cash pension benefits for eligible employees who retire this summer
•NO cap on the number of years employees can accumulate pension-boosting service credits
•NO elimination of post-retirement vision and dental coverage
•Increase the retirement age for newly-hired school employees
April 27: House Democrats reject the Senate version, and with just one Republican vote, pass one with the following:
•Increase of 3 percent in employee pension contributions
•13.3 percent boost the cash pension benefits of eligible employees who retire this summer
•NO cap on the number of years employees can accumulate pension-boosting service credits
•NO elimination of post-retirement vision and dental coverage
•NO increase the retirement age for newly-hired school employees
•Reduce the eligibility standard for the early retirement pension enhancement
•Force all charter school employees into the regular schools' defined benefit pension system, requiring charter operators to pay assessments that could force many to close their doors •Also force outside contractors who provide non-instructional services such as transportation, custodial and food services into the defined benefit pension system
•Allow some of the teachers who retire early to "double dip," collecting both a monthly pension and a paycheck for part-time work in the schools •Deposit the increased employee pension fund contributions into a segregated "irrevocable" trust fund to be used exclusively to pay retiree health benefits (rather than use the money to reduce school district contributions or bolster the underfunded pension fund), and declare these benefits to be contractual obligations
April 27 to Present: The Senate promptly rejected the House-passed version, and both sides appointed members to a conference committee to work out the differences. The current state of play is a moving target, but the latest reports indicate that the House has dropped the charter school provision, and is willing to dicker on the size and scope of the early retirement pension enhancement, but is fighting for health care prefunding and forcing third party school service contract employees into the pension system.
The Senate is also willing to dicker on the early-out pension enhancement, and may surrender on the health care trust fund in return for language stating that "in the aggregate" school retirees do have a contractual right to health care benefits, but not as individuals. What effect the distinction would make is unknown, besides assuring class action lawsuits rather than individual ones in the event of any benefits "haircuts." Either way, taxpayers would be on the hook for a new $25.9 billion liability.
More to come...
Sunday, May 9, 2010
BP box epic fail!
So,the BP box didn't work.Explanation?Ice crystals formed making it bouyant.Hmmm,I'm not buying.How about you?Let's see,the water temperature at the wellhead is 42 degrees farenheit.Seem cold enough for ice crystals?Doesn't seem like it,but I'm not a scientist and don't play one on tv.
What I do know is that there is extreme pressure down there.The water pressure is 2300 pounds per square inch.The oil pressure in the well itself coming from the macondo oilfield is estimated at 135,000-165,000 p.s.i.,with an estimated 1.8 billion gallons of oil still there.
BP is on record stating that a worst case scenario could result in a daily release of 6.8 million gallons of oil.Daily!This is if the 24 inch wellhead completely fails and it is being sanded away internally every minute of every day.The official estimate right now is still 210,000 gallons per day.How much is that?About an olympic sized swimming pool every 3 days.
If the worst case scenario plays out and we see the full 6.8 million gallons per day,we're in for about 264 days of that until the oilfield runs dry.That's about the end of January,2011.Again,this is the worst possible scenario and assuming they can't come up with any solution at all.
The explanation just sounds fishy to me.Oil is being ejected from the broken wellhead at 135,000 p.s.i. and they're saying that slushy ice crystals are accumulating at the top of the oil box?So much that it is floating?A box weighing over 100 tons?Wouldn't you think that pressure like that would simply blow any slush to Kingdom Come?I don't think we're being told the whole story here.More to come...
Friday, May 7, 2010
Reality or illusion?
Reality today is merely an illusion.What used to be now means something different.Take unemployment.The rate increased in April to 9.9% and the President is quick to claim success.Here's to the new norm-cheers!
How about racism?It used to be sitting at the back of the bus.Today it is attending a rally protesting high taxes and wasteful government spending.Cheers again!
How about patriotism?Displaying the American flag was traditionally a source of great pride.Today it is reason for discrimination.Sorry,can't cheer that one.
All I can say is this.If the events unfolding today don't make your blood boil as a freedom loving American,then you are getting your just desserts.Reaping what you sow.As voters,when we are so reckless as to not do our homework before electing people who are anti-American and only wish to destroy what this country was built on,we pay the ultimate price.
Maybe you haven't experienced the types of events referenced above,but you will.It's spreading like cancer and will eventually affect all Americans.Wake-up and get off your ass before it's too late!Tomorrow is too late.Get involved today.You're already on the computer if you're reading this,so start contacting those elected officials.You could start with Ron Paul's Audit the Fed bill which the Senate is attempting to trash as I write this.Stop them!More to come...
How about racism?It used to be sitting at the back of the bus.Today it is attending a rally protesting high taxes and wasteful government spending.Cheers again!
How about patriotism?Displaying the American flag was traditionally a source of great pride.Today it is reason for discrimination.Sorry,can't cheer that one.
All I can say is this.If the events unfolding today don't make your blood boil as a freedom loving American,then you are getting your just desserts.Reaping what you sow.As voters,when we are so reckless as to not do our homework before electing people who are anti-American and only wish to destroy what this country was built on,we pay the ultimate price.
Maybe you haven't experienced the types of events referenced above,but you will.It's spreading like cancer and will eventually affect all Americans.Wake-up and get off your ass before it's too late!Tomorrow is too late.Get involved today.You're already on the computer if you're reading this,so start contacting those elected officials.You could start with Ron Paul's Audit the Fed bill which the Senate is attempting to trash as I write this.Stop them!More to come...
Market manipulation?
It was a wild ride on the markets yesterday to be sure.A 1,000 dive on the Dow in about 20 minutes time and then a 650 point recovery to close.The unofficial explanation to this point has been a trader error.Somebody fat fingered a computer key and sold off shares in the billions instead of the millions is the story as it was first floated out there.
Not so fast.It turns out that it was more involved than just a slip of the finger.Check out this link from CNBC that explores it a little further.
http://www.businessandmedia.org/articles/2010/20100506174136.aspx
No one is claiming to have the reason yet as there are more questions than answers.I hope we aren't left hanging in the breeze like the last time this happened.Could this be a hacker attack?Remember Sept. 11,2008?That was the infamous run on the banks that triggered the economic collapse and created the TARP monster.
It was an electronic run on the banks that saw $550 billion withdrawn from U.S. banks by 11am before the feds stepped in and stopped it.It is claimed that it would have gone all the way to $5.5 trillion had it run its course.
Yet,even today,we have no clue who was behind it.At least officially.There are lots of conspiracy theories floating around,but no official explanation and no one in government has any interest in investigating it.
So lets see how this plays out over the next few days.Hopefully,not just another unsolved mystery.More to come...
Not so fast.It turns out that it was more involved than just a slip of the finger.Check out this link from CNBC that explores it a little further.
http://www.businessandmedia.org/articles/2010/20100506174136.aspx
No one is claiming to have the reason yet as there are more questions than answers.I hope we aren't left hanging in the breeze like the last time this happened.Could this be a hacker attack?Remember Sept. 11,2008?That was the infamous run on the banks that triggered the economic collapse and created the TARP monster.
It was an electronic run on the banks that saw $550 billion withdrawn from U.S. banks by 11am before the feds stepped in and stopped it.It is claimed that it would have gone all the way to $5.5 trillion had it run its course.
Yet,even today,we have no clue who was behind it.At least officially.There are lots of conspiracy theories floating around,but no official explanation and no one in government has any interest in investigating it.
So lets see how this plays out over the next few days.Hopefully,not just another unsolved mystery.More to come...
Thursday, May 6, 2010
PIIGS are on the spit!
The Greece debt crisis has continued its global influence causing the Dow to plunge nearly 1,000 points in a matter of minutes.Now,it's likely that a trading error will be found to be the cause of such a violent sell-off,but it doesn't change the bottom line.The U.S. stock market is not reacting to the threat on the Euro currency as much as they are issuing a referendum on our own governments debt problems.The simple fact is that Obama is a systemic risk to our nation.His reckless spending,on purpose no less,with the goal of increasing taxes later to pay for it,is seen on a wide scale as unsustainable.
The PIIGS,as they are known,are Portugal,Italy,Ireland,Greece and Spain.Of the 27 members of the European Union,this group as a whole has the worst debt to GDP ratio.The austerity measures put in place today in Greece are being violently rejected by the citizens of Greece.Get used to seeing it.It's coming soon to a neighborhood near you.
The people are revolting because they are expected to bear the burden of their governments decades of poor fiscal policies which led to the debt crisis.Sound familiar?Well,it certainly should as we have followed the same path here in America and will soon have our chickens home to roost as well.Greece isn't even the worst in the EU as the U.K. is now surpassing them.We have our version here at home in the form of California.
The alarms have been sounding for some time now by hordes of people.Yet,our government doesn't hear them.They see green shoots and a recovery fueled by the Obama stimulus package.Rational analysis of our economy and debt situation can only lead to one conclusion and that is one of a severe crash ahead.
Freddie Mac announced today they will need another $11 billion dollar bailout with even more already forecast down the road.We are now on the hook for over $100 billion in bailing out Fannie Mae and Freddie Mac.
These events are only a sampling of what the future holds.What is sure is that our government will label all of it as 'unexpected' and that no one saw it coming.Worst of all,they will be there as the savior ready to extend a helping hand in exchange for what's left of your liberty.More to come...
The PIIGS,as they are known,are Portugal,Italy,Ireland,Greece and Spain.Of the 27 members of the European Union,this group as a whole has the worst debt to GDP ratio.The austerity measures put in place today in Greece are being violently rejected by the citizens of Greece.Get used to seeing it.It's coming soon to a neighborhood near you.
The people are revolting because they are expected to bear the burden of their governments decades of poor fiscal policies which led to the debt crisis.Sound familiar?Well,it certainly should as we have followed the same path here in America and will soon have our chickens home to roost as well.Greece isn't even the worst in the EU as the U.K. is now surpassing them.We have our version here at home in the form of California.
The alarms have been sounding for some time now by hordes of people.Yet,our government doesn't hear them.They see green shoots and a recovery fueled by the Obama stimulus package.Rational analysis of our economy and debt situation can only lead to one conclusion and that is one of a severe crash ahead.
Freddie Mac announced today they will need another $11 billion dollar bailout with even more already forecast down the road.We are now on the hook for over $100 billion in bailing out Fannie Mae and Freddie Mac.
These events are only a sampling of what the future holds.What is sure is that our government will label all of it as 'unexpected' and that no one saw it coming.Worst of all,they will be there as the savior ready to extend a helping hand in exchange for what's left of your liberty.More to come...
Wednesday, May 5, 2010
Being PC will get us killed
This is the picture of a white,middle aged,right wing extremist teabagger.No really,it is.Just keep looking at it long enough and you'll see it.At least that must be how it works for the political left in this country because they so dearly wanted this guy to be their straw man.He is Faisal Shahzad,the terrorist who nearly blew up Times Square.
See,they're having a hard time actually locating the real person that fits their profile of a tea party activist.They know he's out there right now plotting to blow up Americans.Racist,violent,extremist.The lefts WMD-a white,middle aged dude.Just like Bush in Iraq,they are acting on bad intelligence.Unfortunately,it's their own bad intelligence that is leading them astray.
Take the immigration stink in Arizona.On the surface,a rather simple scenario.The Feds already have the law in place with the INS tasked to enforce it.Arizona has simply extended the enforcement authority to the state and local level.The Feds were failing in their job to enforce it,so the state took matters in their own hands to see that they have the legal authority to enforce the federal law.
The opposition might want to be careful what they wish for.As they attempt to magnify the issue on a national scale with their violent rallies,they are essentially opening a Pandora's box.If they succeed in overturning this Arizona law,they are succeeding in getting the feds to agree that states do NOT have the legal authority to enforce federal law.
Think about that for just a minute.What a precedent to set.States are not allowed to enforce a federal law.Imagine the implications.For example,trucking regulations.Time allowed behind the wheel.No longer would states be able to enforce this.The left acts on emotion.This is what drives them.They don't always think things through.
In their zest to wish to appear as standing up for the little guy,they make misguided decisions.Gitmo is just another example in this.They have no long term idea of how to address these important security decisions facing us.
Think back to the cold war.MAD.Stands for mutually assured destruction.This is what kept a superpower with nuclear capabilities that match our own in check.They knew they couldn't pull the trigger,because it would result in their own extinction.Not much to gain with that philosophy.
Now we are faced with the constant threat of terrorism.You never know when or where it will happen.It may be large scale like 9-1-1,or just a small,backpack bomb in a subway station.What is our response?Political correctness.No profiling.Don't offend anyone who may possess the same skin color or race or religion,etc.
Terrorists operate under this umbrella of freedom provided by our government and the skewed logic of the left in this country.Until we realize this and correct it,they will continue unimpeded to do as they wish.You could increase the Dept. of Homeland Security 100 times and it wouldn't matter.Not with those type of built-in handicaps.
Profiling is what police work is based on.Serial criminals are caught in this manner.We have 308 million people in this country.If you had to start with a clean slate of 308 million suspects for every criminal activity,you would never catch up to any of them.
Profiling is imperative in narrowing down the likely suspects in order to quickly apprehend them before they can act again.If we must consider granny to be just as likely a suspect as a radical Islam jihadist,then we are screwed.The time wasted tiptoeing around political correctness regulations will insure that the actual criminal will have more than ample opportunity to get away.
Organizations like the ACLU are directly to blame for the success of the terror organizations.They are the enablers that allow them to operate safely.You must separate profiling from racism as this is basis of their claim.
No one wants to go back to the days of being sent to the back of the bus because of your race.Nor do we want it to play in role in hiring decisions or other things of that nature.That's pure racism and it shouldn't be tolerated.
However,profiling plays a necessary role in effective security.Call it a necessary evil if you must,but without it,our defense against terrorism is neutralized.We will always be responding to a terrorist action rather than preventing it.Human traits and behavior patterns are reliable indicators of people.It may,in fact,be culture or religious views that are driving those behavior patterns.It is irrational and irresponsible to not take these factors into account when fighting terror.Lives are at stake.Innocent lives.
Recent events clearly illustrate this.The Times Square bomber absolutely was successful.No,his bomb didn't detonate,but he had it in place and had set the fuse and left the area successfully.The Christmas day airline bomber in Detroit was exactly the same.Only their ineptness saved us from disaster.Richard Reid,the original shoe bomber was another and there are many more examples to choose from.
All left a trail that was exposed after the fact.Had our security forces been allowed to use their instincts along with the capabilities our modern technology makes available,we would have a far better chance to prevent these incidents from becoming near misses.More to come...
Sunday, May 2, 2010
Could this be the 'big one' Katrina only hinted at?
I just reviewed my post from last Sunday entitled "Dumb Economists".At the end I wondered what the unknown factor would be that would trigger the economy to plunge over the cliff.I think the gulf oil disaster just may be the answer.
Little by little,we are finding out more about the true scale of this disaster.Unless they pull a rabbit out of their hat in short order,it appears we are witnessing the greatest environmental and subsequent economic disaster of our time.Check out this link for a possible outcome-http://pesn.com/2010/05/02/9501643_Mother_of_all_gushers_could_kill_Earths_oceans/.As always,we must consider the source as people have agendas and may simply be trying to furthur their own cause which in this case is alternative energy,but it certainly is eye-opening.
Fear mongering?Not when the sources are scientists,not conspiracy theorists.There certainly is no consensus on the release rate of the crude oil.Estimates range from 5,000 barrels a day and up.There is a very real possibility that the sand mixed with the crude is disintegrating the well casing under fantastic pressure.If the wellhead blows,the open well may release an estimated 100,000 barrels per day.That's 4.2 million gallons per day!
It's estimated that drilling the relief well to intersect the well casing to seal it underneath the seabed will take months.What is clear is that no matter how or when or if they seal it,the damage will be astronomical.Some projections are already out for $100 a barrel oil by the end of the week.I've also read that current demand only dictates oil in the $60 a barrel range,so a supply shortage can be absorbed for some time.Take your chances.
It simply doesn't take wild speculation to see that even moderate consequences from this will result in long-term detrimental effects on commercial fishing and the very sensitive biology of the gulf coast.Ocean currents may even spread the problem globally just as how a volcanic ash fallout can traverse the entire globe.
Here is another link to a story that contains many photos of the accident-http://wattsupwiththat.com/2010/05/01/the-gulf-oil-rig-explosion-on-the-scene-photos/.
We are set-up for a chain reaction event that could deliver a kick to the fragile economy that it can't absorb.Still early and much is only speculation,but we may see a drastically different landscape by Memorial Day.The Memorial may be for our economy.Let's hope this entire event is overblown as is often the case,but the fact is that after 20 years Alaska is still dealing with the after effects of the Exxon-Valdez disaster.More to come...
Little by little,we are finding out more about the true scale of this disaster.Unless they pull a rabbit out of their hat in short order,it appears we are witnessing the greatest environmental and subsequent economic disaster of our time.Check out this link for a possible outcome-http://pesn.com/2010/05/02/9501643_Mother_of_all_gushers_could_kill_Earths_oceans/.As always,we must consider the source as people have agendas and may simply be trying to furthur their own cause which in this case is alternative energy,but it certainly is eye-opening.
Fear mongering?Not when the sources are scientists,not conspiracy theorists.There certainly is no consensus on the release rate of the crude oil.Estimates range from 5,000 barrels a day and up.There is a very real possibility that the sand mixed with the crude is disintegrating the well casing under fantastic pressure.If the wellhead blows,the open well may release an estimated 100,000 barrels per day.That's 4.2 million gallons per day!
It's estimated that drilling the relief well to intersect the well casing to seal it underneath the seabed will take months.What is clear is that no matter how or when or if they seal it,the damage will be astronomical.Some projections are already out for $100 a barrel oil by the end of the week.I've also read that current demand only dictates oil in the $60 a barrel range,so a supply shortage can be absorbed for some time.Take your chances.
It simply doesn't take wild speculation to see that even moderate consequences from this will result in long-term detrimental effects on commercial fishing and the very sensitive biology of the gulf coast.Ocean currents may even spread the problem globally just as how a volcanic ash fallout can traverse the entire globe.
Here is another link to a story that contains many photos of the accident-http://wattsupwiththat.com/2010/05/01/the-gulf-oil-rig-explosion-on-the-scene-photos/.
We are set-up for a chain reaction event that could deliver a kick to the fragile economy that it can't absorb.Still early and much is only speculation,but we may see a drastically different landscape by Memorial Day.The Memorial may be for our economy.Let's hope this entire event is overblown as is often the case,but the fact is that after 20 years Alaska is still dealing with the after effects of the Exxon-Valdez disaster.More to come...
Saturday, May 1, 2010
Bail or let fail?
Systemic risk.Too big to fail.Too small to bail.All buzzwords since the financial crisis began.Not as clear cut an issue as it may seem.
The cause of the crisis is clear cut.Loose monetary policies by the Fed for decades along with government enabling thru it's regulatory policies are what laid the groundwork.Investors simply walked right through the open door with the irresistible urge for seemingly unending,easy profits and we have our bubble/burst cycles.
The issue is how to deal with these scenarios in the future.Government is not going to stop meddling in private industry and it's policies of picking winners and losers.The Fed still has a deathgrip on monetary policy that will continue fueling the bubble cycles.In short,we are destined for a repeat of the crisis and it will be worse with each cycle if we don't completely implode on the next one.
The consensus amongst clear thinking people is that we would be better off without TARP and should let capitalism work by allowing businesses to fail.Agreed 100%.Where I part ways with most people is how to proceed when the government has created such a large scale problem.The so called systemic risk.
Take any particular business with a poor business model.Eventually it will fail.This is good.Let it fail and allow the market to work when other companies and investors move in to salvage any worthwhile remnants left over from the crash.Capitalism at work.
However,the government throws a monkey wrench into the formula.They involve entire industries in engaging in poor business practices.The housing market is the perfect example with the packaging of risky mortgages into financial instruments.All part of the master plan to create systemic risk on such a large scale.This creates the dilemma.You're not simply allowing a company to fail,you're allowing an industry to fail.Capitalism is not designed to work in this manner.
Capitalism supports letting a poorly run business fail and then having another succeed in it's place.The strong survive.But you can't do that with an entire industry.No one really knows what would have happened without TARP.But we can speculate.
The domino effect would have most certainly come into play.It's unavoidable due to the structure of the derivatives market.Mortgages were packaged together and resold in slices.Sometimes they were even sliced up more and resold again.You end up with a whole chain of investors dependent upon the homeowner making their mortgage payment.The fallacy was that housing would just continue to appreciate endlessly making these seem very safe investments.
This is why so many municipalities bought them.Municipal bonds are considered about the safest investment you can make.Little did the common investor realize that the bond they owned was built on such a shaky foundation.
This is the problem had we just sat back in Sept. of 2008 and let the chips fall where they may.A massive,global chain reaction crash due to the intertwined financial instruments would have brought down entire industries.I don't think anyone really disputes this.
The comparison is between what-ifs.Would we have been better off with a steep crash that allows the garbage to flush out all at once?Are we better off with the taxpayers on the hook for the TARP funding?Or is there a 3rd alternative as we are once again progressing toward another bubble burst cycle?
The best solution would be to elect an administration and Congress that would simply step aside and let the free markets work.However,that's not in the cards anytime soon.Even if you elect Ron Paul,he would have massive hurdles to overcome in the form of the entire progressive left opposed to such policies.
The fallout from allowing such a large scale crash is unknown.We already know the credit markets would freeze up.This would kill many businesses alone that rely on credit access for payroll.You would,of course,have massive unemployment with so many businesses going bankrupt.Factor in the state and local municipalities that had invested in the derivatives markets.
Remember,unemployment is key.People stop working and the trickle down is wide.Consumer spending drops.Tax collections drop.Defaults and foreclosures increase.It's all an intertwined web that feeds on itself.
Not only do you have the shareholders of the failed companies losing everything,but the bondholders take a huge hit.If it's a bank,the FDIC only insured up to $100k at that point so those depositors in excess of that would have lost their money as well.
I don't see where it's possible to limit the effects to just the frontline businesses that would go bankrupt.There is simply too much weaved into the mix that is collateral damage.Again,all speculation and nobody knows just how far the entire economy would have fallen.
TARP is not the answer.The pending financial reform is certainly not the answer.Bean counters like to look at numbers in a black and white world.Economists solutions to this problem seem to be in the same vein.They don't properly factor in things like human behavior,or in this case,politics.Far to many politicians aren't concerned with the free market,only power and getting re-elected.
There are more that want the Fed dictating policy than do not.There are more that want government to have a bigger role in private markets.Thus,the problems created by the bubble cycles are sure to continue.
The holy grail here is to find a system that somehow accommodates both capitalism and politicians hellbent on destroying it and somehow protecting the common man who takes the brunt of the fall every time.It doesn't exist and I've never even heard it proposed.For now,simply more of the same.More to come...
The cause of the crisis is clear cut.Loose monetary policies by the Fed for decades along with government enabling thru it's regulatory policies are what laid the groundwork.Investors simply walked right through the open door with the irresistible urge for seemingly unending,easy profits and we have our bubble/burst cycles.
The issue is how to deal with these scenarios in the future.Government is not going to stop meddling in private industry and it's policies of picking winners and losers.The Fed still has a deathgrip on monetary policy that will continue fueling the bubble cycles.In short,we are destined for a repeat of the crisis and it will be worse with each cycle if we don't completely implode on the next one.
The consensus amongst clear thinking people is that we would be better off without TARP and should let capitalism work by allowing businesses to fail.Agreed 100%.Where I part ways with most people is how to proceed when the government has created such a large scale problem.The so called systemic risk.
Take any particular business with a poor business model.Eventually it will fail.This is good.Let it fail and allow the market to work when other companies and investors move in to salvage any worthwhile remnants left over from the crash.Capitalism at work.
However,the government throws a monkey wrench into the formula.They involve entire industries in engaging in poor business practices.The housing market is the perfect example with the packaging of risky mortgages into financial instruments.All part of the master plan to create systemic risk on such a large scale.This creates the dilemma.You're not simply allowing a company to fail,you're allowing an industry to fail.Capitalism is not designed to work in this manner.
Capitalism supports letting a poorly run business fail and then having another succeed in it's place.The strong survive.But you can't do that with an entire industry.No one really knows what would have happened without TARP.But we can speculate.
The domino effect would have most certainly come into play.It's unavoidable due to the structure of the derivatives market.Mortgages were packaged together and resold in slices.Sometimes they were even sliced up more and resold again.You end up with a whole chain of investors dependent upon the homeowner making their mortgage payment.The fallacy was that housing would just continue to appreciate endlessly making these seem very safe investments.
This is why so many municipalities bought them.Municipal bonds are considered about the safest investment you can make.Little did the common investor realize that the bond they owned was built on such a shaky foundation.
This is the problem had we just sat back in Sept. of 2008 and let the chips fall where they may.A massive,global chain reaction crash due to the intertwined financial instruments would have brought down entire industries.I don't think anyone really disputes this.
The comparison is between what-ifs.Would we have been better off with a steep crash that allows the garbage to flush out all at once?Are we better off with the taxpayers on the hook for the TARP funding?Or is there a 3rd alternative as we are once again progressing toward another bubble burst cycle?
The best solution would be to elect an administration and Congress that would simply step aside and let the free markets work.However,that's not in the cards anytime soon.Even if you elect Ron Paul,he would have massive hurdles to overcome in the form of the entire progressive left opposed to such policies.
The fallout from allowing such a large scale crash is unknown.We already know the credit markets would freeze up.This would kill many businesses alone that rely on credit access for payroll.You would,of course,have massive unemployment with so many businesses going bankrupt.Factor in the state and local municipalities that had invested in the derivatives markets.
Remember,unemployment is key.People stop working and the trickle down is wide.Consumer spending drops.Tax collections drop.Defaults and foreclosures increase.It's all an intertwined web that feeds on itself.
Not only do you have the shareholders of the failed companies losing everything,but the bondholders take a huge hit.If it's a bank,the FDIC only insured up to $100k at that point so those depositors in excess of that would have lost their money as well.
I don't see where it's possible to limit the effects to just the frontline businesses that would go bankrupt.There is simply too much weaved into the mix that is collateral damage.Again,all speculation and nobody knows just how far the entire economy would have fallen.
TARP is not the answer.The pending financial reform is certainly not the answer.Bean counters like to look at numbers in a black and white world.Economists solutions to this problem seem to be in the same vein.They don't properly factor in things like human behavior,or in this case,politics.Far to many politicians aren't concerned with the free market,only power and getting re-elected.
There are more that want the Fed dictating policy than do not.There are more that want government to have a bigger role in private markets.Thus,the problems created by the bubble cycles are sure to continue.
The holy grail here is to find a system that somehow accommodates both capitalism and politicians hellbent on destroying it and somehow protecting the common man who takes the brunt of the fall every time.It doesn't exist and I've never even heard it proposed.For now,simply more of the same.More to come...
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