What does change mean for a voter after the election?

My last post raised the issue that it wasn’t just that the economy could be worse, it should be worse. It was appropriate to give a break until after the election so now it is time to recap some of what has happened and look at where we go from here.

What I didn’t see happening was Paulson and Bernanke going in front of Congress and convince them the sky was falling. The economy, was, and is, in pretty grim shape. But did the way that DC handled the whole issue make it better or worse? No one wanted to look at that while there was an election coming up. For whatever reason, Congress and the administration did what they did. Passed a “stimulus” package and opened up the taxpayers checkbook, and in this case, signed the taxpayer to trillions in promissory notes. And that is just the beginning.

As of Nov. 5, this has been the Obama administration. Even if Bush didn’t have approval ratings that only are made better by looking at Congress’, his ability to function as anything other than the guy who will try to get his cleaning deposit back on the WH is over. And if you don’t want to believe that, just look at what GM, Ford, Chrysler, and the UAW did to get in line for their checks. They didn’t even make a courtesy call on the administration. They went directly to Pelosi who has the advantage of already having a position while Obama has to wait a while. This is an interesting turn of events as shortly before the election, Treasury basically turned down the auto makers requests and said that they will have to go for their share of the $25B retooling package, which doesn’t even have guidelines set up yet, and then go after the current Obama administration for a bigger handout. Now Pelosi under Obama’s direction could have brought back Congress for a lame duck session and force feed an auto bailout for those loyal Michigan and Ohio voters. That’s what those people sold their votes for after all. But instead, Pelosi reads that there is some feeling among the electorate that these bailouts may not be popular. So Pelosi thought it would be a good idea to have Bush take the heat for a quick check to the auto companies. And how did the Obama/Democratic administration negotiate this deal? They sent a letter to the WH and released it to the press last Saturday.

The letter asks for Bush to, on his own authority, add the auto cos. to the stimulus package so Congress doesn’t have to approve giving $15B to GM to make the payment due in Dec. to the UAW to fund the auto worker golden parachutes. If GM makes that payment, they will probably be in technical bankruptcy in the first quarter of 09. So they would really like the tax payer to make that payment. And the UAW is in total agreement. After all, if GM defaults on the package they negotiated in 07 to turn the pension liability over to the UAW (along with a total of $61B that they don’t have) the retirees will be looking at GM bankruptcy or having to go to PBGC. Either way, they get pennies on the dollar just like anyone else that depends on an insolvent pension fund. But that isn’t what the UAW wants or GM really. UAW workers tend to get somewhat vindictive and have the wisdom to take it out on the product they build. Something that GM can’t survive. The short term plan would have been for GM to make a deal with the Wall Street Cerberus fund to get the $11B in cash that ChryCo has. But Cerberus, with Larry Summers as its head and with such notables as spokesperson Dan Quayle, might not get this year’s bonus if the taxpayer didn’t also throw another, say, $10B at them on Wall Street. So GM has pretty much dropped the ChryCo deal and went straight to the deepest pockets they could find with the easiest to push negotiators in charge, the US taxpayer. Why exactly Bush would want to give the Obama administration and the Democratic Congress cover is not very clear. Not saying they can’t make a deal with him. But you don’t do it with releasing a letter to the press. And as of right now, it doesn’t seem like Bush has decided to rush the checks to Detroit.

But what is it that makes this all work? We are now in the post election period and there is business as usual and there is the hope of change. Business as usual would mean that the US taxpayer would now go into a coma after the election. We spent our energy picking experienced people who had all the right makeup to be president on a moment’s notice. Whether it is answering the red phone at 2AM or handling an economic problem. And we (with the medias’ help) poured over the plans that the experienced candidates would implement on day one to rejuvenate this economy. And now, historically, these competent, experienced people, with the right plan in hand, need time to figure out what to do and how to do it. Doing things the way we have for hundreds of years already means that the taxpayer needs to go into a come for three and a half years. At which time they can be reawakened when their vote is once again needed and told how well everything has worked out since they put the current administration in office. That’s the way things have always worked and exactly the way the Obama administration wants them to work now. And it wouldn’t make any difference if it were a McCain administration. They would be the same. But Obama got 62M votes for himself. It is time to ignore the 58M that voted for McCain.

So what would change look like? It would be an electorate that actually wants to see how competent these people are on day one. They convinced us they were ready to launch nuclear missiles at 2AM. They need to get to work right now. Not three months from now and surely not three years from now. And the electorate needs to watch everything they do with the same interest a month after the election as they had a month before the election. Trillions in bailouts to get the party going again on Wall Street but plans for credit card reform or mortgage assistant need to work their way through the system. Just as they have for the past several years. This is Obama/Democrat administration right now. No one needed to be reminded that the inauguration isn’t until January other than those who are now trying to buy as much time as possible instead of having to get to work immediately. California is already seeing the effects of “Just don’t say no” fiscal policy. Except they don’t have printing presses. But my guess is that with a Democratic friendly administration, the taxpayer in all those other states will get to pay many of California’s bills. And if the electorate does what the politicians want, and goes into snooze mode for three and a half years, they won’t even know it’s happening.

So, there’s the choice, US politics as usual for the past two hundred years or change. And change will involve having to dig for information and making your voice heard. Otherwise, don’t expect much to change. I wonder if we have the interest to hold politicians responsible every day or just sleep? As usual.

So how good is this economy?

So how good is this economy? Really?

No one doubts that there are issues with the economy. Home equity has disappeared before people’s eyes. Credit availability has really only begun to dry up. Unemployment is trying to persistently increase. Company’s are reducing revenue forecasts going forward and most everyone is stretching out estimates of when recovery will occur. But in light of the bad news it isn’t just a case that the economy could be worse. It really should be worse. But it isn’t.

Unemployment is by no means anywhere near historic highs. Most people would like to see a new trend of jobs coming back to the US and it is sporadically happening. But the global economy is with us because it is possible to fabricate goods in country’s that will subsidize manufacturing or have much lower labor rates and then economically ship them to consuming countries, such as the United States. As country’s evolve, the subsidies become unsustainable and slowly but surely, labor rates increase, and energy costs are causing the economics of bringing goods manufactured in far away places to market to become less attractive. Unemployment is a definite concern and one that the Federal Reserve is watching closely. But the strengthening of the dollar, not due to anything the US did, is really due to the weakening of other currencies will put the brakes on fears of inflation. The effect is just as real as if the US did strengthen the dollar instead of just talking about it. And that effect is no where more visible than in energy prices. As energy has fallen, so has inflationary pressures. It might not last but the odds are that the Fed will most likely do precisely nothing for some time. Benny and the Feds are probably very happy at that turn of events. Unless unemployment and inflation make some significant move, very unlikely, or the economy gets either much stronger or much weaker, also not very likely, the Fed can just sit back with their interest rate popgun firmly in its holster.

Are there trouble signs? Of course. While the economy is doing surprisingly well, it is also more on the fragile side than would be desirable. Increases in federal spending and tax increases are ill advised. But that soon depends on an election and will simply play out as the voters wish. Energy prices may be in for further declines and settle at a sustainable lower level. Or not. The most oil revenue needy countries will scream the loudest for a production cuts, think Iran and Venezuela, but the cooler heads in OPEC (relatively speaking) will probably let it just go at getting back to the quotas that are technically in place. Chavez and the ayatollahs who quickly got used to those revenues at $145/barrel aren’t going to see them return. And they are going to whine long and loud. But having said that, OPEC would probably be very comfortable with a $100/barrel floor and will try to see if the world will support that without either more exploration, alternative development, or demand destruction. None of those results are in OPECs interests but the genie may be out of the bottle and energy price stability may be valued more than seeking a path of least resistance. It might take another 50% energy price increase cycle or two for the world to get serious or it may have already happened.

As we all found out, energy prices work their way through the entire economy but this year’s crunch came on top of the sub prime mess, housing price collapse, and credit tightening. And yet, the economy is not only not in recession, it continues to grow at a difficult to ignore pace. As I said, by all rights, it should be doing worse than it is. Housing will inevitably sort itself out. The market is taking care of that more than the government. It is difficult to see a return to the market of just a few years ago but with housing prices first leveling off and then slowly appreciating, the impact of energy and inflation will be far less than they were this year.

Recent history has taught us little other than when bubbles collapse, most people involved really want the bubble to reinflate. For the US it would mean the return of the unfettered American Consumer, savior of the worlds economies. Many countries exporting to the US are counting on it. But the US would be better served to learn its lesson and have the American Consumer take a more sober look at reality and learn lessons about credit and its uses. There are few more painful adjustments than realizing that one has been living beyond their means and realizing what their incomes can support. Of course politicians will point to increasing poverty levels and the need to redistribute wealth but with the US quickly getting to the point where over 50% of taxpayers will pay no taxes at all, taxing to redistribute wealth rapidly achieves diminishing returns and incentivizes tax avoidance. Increasing spending on education should create a more educated work force that will be able to move into better paying jobs but without the jobs here, the education is creating a more educated class of un- and underemployed. Reinflating the credit bubble more than likely won’t, and shouldn’t happen. That would mean more pain than Americans have been exposed to for quite a while.

I don’t mean to minimize the pain right now in the United States. Those auto workers and suppliers to the auto industry that are losing their jobs in the Midwest are feeling real pain right now. But decades of mismanagement and union pandering aren’t going to be undone overnight without real pain. It’s not like the US auto industry was on the brink of a spectacular recovery. For years they played games with product and incentives to keep the American Consumer in gas guzzling, barely competitive product. A real energy shock and the industry found itself producing product that nobody wanted at any price. The steps being taken now will not create or save jobs in the short run and it is even questionable how successful they will be in the longer run. Of course if you believed your path to fame and fortune, well at least fortune, was to be made by leaving your job at McDonald’s flipping burgers and then flipping houses on weekends, you’ve found out that the people putting those late night infomercials out didn’t have any insight. They just made their money 19.95 at a time on a CD or seminar to “share their secrets”. Here’s a clue, people who can make millions in anything don’t share their secrets 19.95 at a time doing infomercials. They don’t have to. And as people made deals that were to bring them quick wealth and got caught, what did they do? Why they ignored their contractual obligations, walked away from bad deals, and hope their fellow citizens will bail them out. Some were defrauded, the majority weren’t and were actually the ones perpetrating the fraud. Coming to grips with your true financial situation should match your assessment of your abilities to manage money in investments. If you don’t understand the deal you are getting into, you have no business getting into it. Contrary to popular belief, successful business people are not glib talkers who have “people” take care of everything and they are just the “idea” person with contacts and profit taker. Those who don’t honor commitments, contractual or otherwise, don’t find themselves in business very long. Regardless of what popular wisdoms are about self worth, knowing your own limitations is a good start for life. The hit being taken from getting into deals that were too good to be true is painful and it isn’t over. But it shouldn’t be swept under the rug, denied, and minimized. It should be a learning experience.

So there really are a lot of negatives in American society that brought about a tough economic situation. But the economy is still doing quite well, much better than it should. We waste billions in federal spending. We have exported more high paying jobs than we appreciate. We are at the wrong end of the stick on energy from the producers to the speculators. Federal government spending has infected state and local governments who no longer have tax bases to support spending plans and bankruptcies for those who can’t print money are real possibilities. Retirement plans have turned into fantasies including Social Security which remains the crazy aunt in the closet that everyone wants to ignore. And yet, the economy is not only not in recession but has positive growth. It is fragile and could easily get to a really bad state. But it hasn’t. And every month that goes by gets us closer to the end of many of the negative factors that are floating around out there. So, how good is this economy? Better than most people want to take the time to think about and admit.

Why presidential candidate tax proposals mean nothing to me.

Once we get past the staged convention nonsense, the campaigns will turn back to issues, running ads pointing out the oppositions’ flaws, and then run ads saying how the opposition is lying. For many voters, the economy is the biggest issue in this election. But most of them haven’t got a clue as to what a president should, or can, do to help the economy. Tax policy will get a lot of play in the debates and those useless campaign ads but they don’t mean a thing.

Presidents can propose legislation and they can veto legislation but it is Congress where the action takes place. I don’t have numbers on how many campaign “promises” ever mean anything but my guess is that presidential campaign statements about tax policies have little, if any, connection to what really happens. So Obama and McCain can quote chapter and verse on the percentages of marginal tax rates applying to what income level and it will all mean absolutely nothing. The Democrats will surely control Congress and if you want to see what is in store, look at what someone like Charley Rangel has been talking about recently.

Do I believe Barack Obama will raise taxes? Yep, I sure do. Do I believe John McCain will raise taxes? Ditto. Do I believe that Barack Obama will raise taxes more than John McCain? Duh. But should McCain pull off maybe the upset of the decade, he is going to have to be very adept to keep the Dems under control. The more important question needs to be on the spending side but that just doesn’t appeal to the typical American voter. Do I believe Barack Obama will increase federal government spending? Once again, the answer is yes. Do I believe John McCain will increase federal government spending? Unfortunately, once again the answer is in the affirmative. Do I believe Barack Obama will increase federal government spending more than John McCain? I wish I could say yes but the Republicans have lost their way and McCain will have to be very adroit and get some help from the economy and world situation to rein in spending. So I guess the best I can answer is that I am hopeful that McCain might be able to hold back spending more than Obama, who won’t have any interest in keeping spending under control.  But, for just one example, whatever peace dividend there is from reduction in effort and spending in Iraq will be minimal as everything from Afghanistan to health care compete for increased spending. And that doesn’t even include Russia and whatever game they have decided to start playing.

The original projections on Rangels plans were for around a half a trillion dollars of increases. Currently, the numbers have escalated to around $1.3T. These numbers were based on what Charlie was talking about last fall and may not have any relevance as even they will change significantly once they get down to it in 09. But with Obama in the White House, there will be no reason for the Dems to restrain anything on what could be the largest tax increase in history. Whether they couch it in terms of tax reform or tax fairness the result will be a massive tax increase. Rhetoric that is going on in the campaigns as to limitations to increases only to those taxpayers making over 150 or 250 thousand dollars a year will be meaningless once they start to really push the numbers around. Just one example, Rangel wants a surcharge on those wealthy tax payers. Oh, don’t call it a tax increase as the brackets will “only” go up by a few percent but the numbers I have seen for the surcharge he wants is on the order of 4% on AGI over $200K and 4.6% for higher income tax payers. And please note that our Democratic friends are not even letting you have some deductions and using taxable income but AGI so it will potentially wipe out your mortgage deductions, charitable contributions, state and local tax deductions, etc.

Obama and McCain tax proposals? If you base your vote on how well a candidate will lie to you then you can pay attention. For me, their proposals mean nothing. The reality of what will happen once either of them takes office and works with a Democratic controlled Congress will be very different than any of the lies they are telling on the campaign trail. And for those of you who feel that it is about time that all the fat cats get their comeuppance and pay their “fair share” of tax bills, be careful what you wish for. You are going to find yourself paying more in taxes and you may also find that businesses, even with reduced corporate taxes as Rangel wants to put in for a red herring, will be far less able to make or keep jobs in the US. So when either candidate runs ads on their tax plan benefits, their opponents tax plan disasters, and then the ads pointing out how the other side is lying, just save your sanity and ignore them. Unless, of course, you want to vote for the guy who’s the better liar.

Obama / Biden

I heard this on CNN this morning and man did I laugh hard.

Biden really!? Its funny that a person that has 0 experience on anything in foreign politics or anything nationally really picks someone with Washington credentials and foreign policy experience. Which in the words of Obama “if I should not be able to lead this country can take my place”. So he picks Biden.

So to skip the whole “possibility” of Obama not being able to serve why not just choose McCain with the experience and is the Presidential nominee already?

I figured I’d hit the photoshop cave and pop this out before anyone else does, because the coincidence is way to to easy to pass up.

Osama Bin Laden

Venezuelans protest Chavez’s new socialist push

News Link

Riot police used tear gas Wednesday to block hundreds of Venezuelans protesting the latest moves by President Hugo Chavez to concentrate his power. The demonstrators said a blacklist of opposition candidates and a series of socialist decrees are destroying what’s left of their democracy.

Though the protest of about 1,000 people chanting “freedom!” was small compared to past marches, there is a growing public outcry over the sidelining of key government opponents ahead of state and local elections in November.

Chavez opponents also are outraged by 26 laws the president just decreed, some of them mirroring the socialist measures voters rejected in a December referendum.

“We said in the referendum that we didn’t want that, and now he’s put it in the decrees,” said protester Josefina Bravo, a 59-year-old who wore a sticker reading “No means no” on her baseball cap. “That’s the problem we have: All the powers are concentrated in the president.”

Chavez seems like he wants attention again.
Looks like after his stinging defeat last year he is coming back for more, only this time he doesn’t have to worry about defeat. He makes the rules.

This is the problem people fail to grasp with Socialist parties and their agendas. Its not what YOU the people think is right, its what the GOVT thinks is right for YOU. Its the same idealistic, mommy govt that is being pushed in this country only lots more subtle.

The movements in NYC to remove trans fat, because well, you don’t know any better.
The movements in LA to stop any fast food restaurants from operating, because you don’t know better. The proposals being highlighted by Obama for things to ‘change’ this country, because you don’t know better.

Morgan Stanley Said to Freeze Home-Equity Credit Withdrawals

News Link

Morgan Stanley, the second-biggest U.S. securities firm, told thousands of clients this week that they won’t be allowed to withdraw money on their home-equity credit lines, said a person familiar with the situation.

Most of the clients had properties that have lost value, according to the person, who declined to be identified because the information isn’t public. The New York-based investment bank will review home-equity lines of credit, or HELOCs, monthly from now on, the person said yesterday.

Wall Street firms including Morgan Stanley are ratcheting back on risks after the collapse of the subprime mortgage market and ensuing credit contraction saddled banks and brokerages with almost $500 billion of writedowns and losses. Consumers fell behind on home-equity credit lines at the fastest pace in two decades in the first quarter, the American Bankers Association reported last month.

“Morgan Stanley periodically reassesses client property values and risk profiles,” said Christine Pollak, a Morgan Stanley spokeswoman in Purchase, New York. “A segment of clients was recently notified of a change in the status of their home- equity line of credit, or HELOC, due to a change in the value of their property and/or their credit profile.”

Pollak declined to specify the dollar amount of the frozen credit lines. The firm’s global wealth management division, which doesn’t disclose how many clients it serves, had 8,350 advisers managing $739 billion of customer assets at the end of May, according to its second-quarter earnings report.

No Recovery Seen

“It’s evidence that they don’t think the economy is going to recover quickly,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York who rates Morgan Stanley shares “outperform” and who owns some of the stock. “The fact that they’re trying to get ahead of the problem is very good.”

Morgan Stanley has already taken about $14.4 billion of losses related to leveraged loans and collateralized debt obligations. The clampdown on home-equity loans mirrors similar efforts by commercial banks, said David Hendler, an analyst at Credit Sights Inc. in New York.

“All consumer lenders and home-equity lenders are reassessing the environment given the pressure on housing and the economy,” Hendler said.

JPMorgan Chase & Co., the second-biggest U.S. bank by market value after Bank of America Corp., has notified 150,000 customers about changes in their home-equity lines of credit since March, said Christine Holevas, a Chicago-based spokeswoman.

Changes Made

In some cases the lines have been reduced and in other cases they’ve been suspended, depending on the change in home values, she said. The changes affect about 15 percent of JPMorgan’s home- equity credit customers, Holevas said.

Bank of America and Washington Mutual Inc. are among the other lenders that have frozen home-equity credit lines this year.

“Morgan Stanley customers are typically coming out of their wealth management side, so typically a high net worth customer,” said Christopher Whalen, co-founder of Institutional Risk Analytics in Torrance, California. “This shows you they are under the same pressures as everybody else.”

This may be a good time folks to look at what you have in your line, access if you may need it for a rainy day fund (like I will be doing) and see if taking out some of that money now before it disappears is a good idea.

Don’t forget about the interest rate you will be paying to take that money out. Best thing to do to offset it, is to put that money into a structured CD or online savings bank account that will at the very least give you some 4% interest rate on it. Most people are paying 6-8% on HELOC’s. Access if a 3% loss on that borrowing is worth it for emergency funds that may not be there later.

Wal-Mart Warns of Democratic Win

Looks like even Wal-Mart sees that democrats controlling both branches of Govt is a bad idea.
They too see Obama’s socialist tendencies. Couple that with those of Pelosi and Reid and you have a situation that could very well bury this economy for good.

Sounds great right?

News Link

Wal-Mart Stores Inc. is mobilizing its store managers and department supervisors around the country to warn that if Democrats win power in November, they’ll likely change federal law to make it easier for workers to unionize companies — including Wal-Mart.

In recent weeks, thousands of Wal-Mart store managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if stores were to be unionized.

According to about a dozen Wal-Mart employees who attended such meetings in seven states, Wal-Mart executives claim that employees at unionized stores would have to pay hefty union dues while getting nothing in return, and may have to go on strike without compensation. Also, unionization could mean fewer jobs as labor costs rise.

The actions by Wal-Mart — the nation’s largest private employer — reflect a growing concern among big business that a reinvigorated labor movement could reverse years of declining union membership. That could lead to higher payroll and health costs for companies already being hurt by rising fuel and commodities costs and the tough economic climate.

The Wal-Mart human-resources managers who run the meetings don’t specifically tell attendees how to vote in November’s election, but make it clear that voting for Democratic presidential hopeful Sen. Barack Obama would be tantamount to inviting unions in, according to Wal-Mart employees who attended gatherings in Maryland, Missouri and other states.

“The meeting leader said, ‘I am not telling you how to vote, but if the Democrats win, this bill will pass and you won’t have a vote on whether you want a union,'” said a Wal-Mart customer-service supervisor from Missouri. “I am not a stupid person. They were telling me how to vote,” she said.

“If anyone representing Wal-Mart gave the impression we were telling associates how to vote, they were wrong and acting without approval,” said David Tovar, Wal-Mart spokesman. Mr. Tovar acknowledged that the meetings were taking place for store managers and supervisors nationwide.

Wal-Mart’s worries center on a piece of legislation known as the Employee Free Choice Act, which companies say would enable unions to quickly add millions of new members. “We believe EFCA is a bad bill and we have been on record as opposing it for some time,” Mr. Tovar said. “We feel educating our associates about the bill is the right thing to do.”

People really don’t see how damaging Unions have been do they?
Look no further than the Big 3 automakers. Whom are all swimming in pension debt that they are all too eager to get rid of as soon as possible. Its no wonder Detroit is in Shambles and the governor nor the Mayor for that matter have any sort of response other than increase taxes. Like that is the solution?

The bill was crafted by labor as a response to more aggressive opposition by companies to union-organizing activity. The AFL-CIO and individual unions such as the United Food and Commercial Workers have promised to make passage of the new labor law their No. 1 mission after the November election.

First introduced in 2003, the bill came to a vote last year and sailed through the Democratic-controlled House of Representatives, but was blocked by a filibuster in the Senate and faced a veto threat by the White House. The bill was taken off the floor, and its backers pledged to reintroduce it when they could get more support.

The November election could bring that extra support in Congress, as well as the White House if Sen. Obama is elected and Democrats extend their control in the Senate. Sen. Obama co-sponsored the legislation, which also is known as “card check,” and has said several times he would sign it into law if elected president. Sen. John McCain, the likely Republican presidential nominee, opposes the Employee Free Choice Act and voted against it last year.

Wal-Mart’s labor-relations meetings are led by human-resources managers who received training from Wal-Mart on the implications of the Employee Free Choice Act.

This bill is almost CERTAIN to pass with Obama in the white house.
I said it before and I will go on record saying it again.
Obama’s ‘economic’ and ‘social’ plans will destroy the US economy for SURE.
People think things are bad now, wait till the big O gets in there.

Obama’s ’emergency’ economic plan

Tax Oil companies.

News Link

Sen. Barack Obama (D-Ill.) on Friday announced an “Emergency Economic Plan” that would give families a stimulus check of $1,000 each, funded in part by what his presidential campaign calls “windfall profits from Big Oil.”

Details are in this six-page policy paper.

The first part of Obama’s plan is an emergency energy rebate ($500 to individual workers, $1,000 to families) as soon as this fall.

“This rebate will be enough to offset the increased cost of gas for a working family over the next four months,” Obama said. “Or, if you live in a state where it gets very cold in the winter, it will be enough to cover the entire increase in your heating bills. Or you could use the rebate for any of your other bills or even to pay down debt

Separately, Obama’s plan includes a $50 billion stimulus package that his campaign claims would save more than 1 million jobs.

Half of the money would go to state governments, which are facing big budget shortfalls, and half would be used for national infrastructure, including replenishing the Highway Trust Fund, rebuilding roads and bridges, and repairing schools.

Obama announced his plan 27 minutes after a Labor Department report showed unemployment hit a four-year high of 5.7 percent in July — the highest rate since March 2004, when it was 5.8 percent.

“We need to do more,” Obama said in a statement. “That’s why today I’m announcing a two-part emergency plan to help struggling families make ends meet and get our economy back on track.

McCain reacted to the surprisingly dour jobs report with a two-paragraph statement: “Across this country, Americans are hurting and today’s job numbers are just the latest reminder of the economic challenges we face. … Unlike Sen. Obama, I do not believe that raising taxes is the answer to our economic problems. There is no surer way to force jobs overseas than to raise taxes on businesses.”

Obama announced his plan for a windfall profits tax on oil companies on June 9 in Raleigh, N.C., as he launched a two-week economic tour after clinching the Democratic nomination.

Friday’s proposal says Obama “is proposing to offset the cost of his emergency energy rebates over the next five years by enacting a windfall profits tax on big oil companies.”

“Obama simply asks that big oil companies contribute a reasonable share of the windfall profits they receive from high oil prices over the next five years to pay for emergency assistance for families right now,” the campaign says.

That is Obama’s plan? To tax Oil companies to then give that money to Oil Consumers who will then buy more oil based products? HUH?

What is this Windfall profit that Obama keeps talking about?
Is there a margin rate that meets this requirement?

This is so ridiculous, I cannot believe that this man is really running for president.

Race Card…

Accepted at all major speeches and political functions as long as you are black.
Also easily spun away by the Messiahs followers.

Democrat Barack Obama, the first black candidate with a shot at winning the White House, says John McCain and his Republican allies will try to scare them by saying Obama “doesn’t look like all those other presidents on the dollar bills.”

Obama didn’t make clear what distinctions McCain was likely to raise regarding the presidents on U.S. currency, men who are white and, for the most part, much older than Obama when they were elected. McCain has not raised Obama’s race as an issue in the campaign, though he has said that Obama lacks experience.

Stumping in an economically challenged battleground state, Obama argued Wednesday that President Bush and McCain will resort to scare tactics to maintain their hold on the White House because they have little else to offer voters.

“Nobody thinks that Bush and McCain have a real answer to the challenges we face. So what they’re going to try to do is make you scared of me,” Obama said. “You know, he’s not patriotic enough, he’s got a funny name, you know, he doesn’t look like all those other presidents on the dollar bills.”

McCain spokesman Tucker Bounds declined to comment Thursday on Obama’s remarks.

Obama spokesman Robert Gibbs said the senator was not referring to race.

“What Barack Obama was talking about was that he didn’t get here after spending decades in Washington,” Gibbs said Thursday. “There is nothing more to this than the fact that he was describing that he was new to the political scene. He was referring to the fact that he didn’t come into the race with the history of others. It is not about race.”

Obama often makes references to his distinctions as a candidate, such as saying there are doubts among some voters because he has “a funny name.” At times he refers to his race as well, saying he looks different that any previous candidate but then adding that the differences are not just about race. Addressing supporters Tuesday night at a fundraiser in Springfield, he said, “It’s a leap, electing a 46-year-old black guy named Barack Obama.”

During a round of appearances in Missouri, Obama worked to link McCain to the unpopular Bush, saying the Republican senator from Arizona would serve the equivalent of a third Bush term if elected. He said the country can’t afford more of the same and expects different results.

“That’s a definition of madness, but that’s what John McCain is offering. He’s offering Bush economic policies and Karl Rove politics,” Obama said.

He pressed the theme later at a rain-soaked barbecue in Union, Mo.

“They’re going to say I’m a risky guy,” Obama said. “What they’re going to argue is I’m too risky. The real risk is that we miss the moment, that we do not do what’s needed because we’re afraid.”

For its part, McCain’s campaign on Wednesday released a withering television ad comparing Obama to Britney Spears and Paris Hilton, suggesting the Democrat is little more than a vapid but widely recognized media concoction.

“He’s the biggest celebrity in the world, but is he ready to lead?” the voiceover asks in the ad, which mixes images of Obama on his trip to Europe last week with video of the 20-something pop stars.

Obama’s campaign quickly responded with a commercial of its own, dismissing McCain’s complaints as “baloney” and “baseless.”

Throughout the day, Obama argued that McCain “thinks we’re on the right track,” drawing boos from his audiences.

“These anxieties seem to be growing with each passing day,” Obama said. “We can either choose a new direction for our economy or we can keep doing what we’ve been doing. My opponent, John McCain, thinks we’re on the right track.”

That elicited boos from some of the 1,500 people who filled a Springfield high school gymnasium. When an AP-Ipsos poll asked the “right track, wrong track” question this month, 77 percent said they thought the country was on the wrong track. The same poll set Bush’s approval rating at 28 percent. Both were records for the AP-Ipsos survey.

“It’s true that change is hard, change isn’t easy,” Obama said. “Nobody here thinks that Bush or McCain has a real answer for the challenges we face so what they’re going to try to do is make you scared about me.”

Obama also compared himself to western legend Wild Bill Hickok, who he said had fought a duel in Springfield.

“I’m ready to duel John McCain on taxes right here, quick draw,” Obama said, prompting a quick retort from the other side.

“If Barack Obama wants this so-called duel then why did he and his entourage run for the hills when John McCain challenged him to 10 town halls?” asked Bounds, the McCain spokesman.

Obama responded after shaking hands at a restaurant in Lebanon, Mo.

“I don’t hear very much positive from Sen. McCain,” he said. “He seems to be only talking about me. You need to ask John McCain what he’s for, not just what he’s against.”

Surge worked?

Get out of here, REALLY!
Someone tell Obama quick, so he can retool his position on the surge.

Eleven US soldiers were killed in Iraq in July, the lowest monthly toll since the 2003 invasion, according Pentagon figures, highlighting what US commanders say is a marked drop in overall violence.

The number compares with the deadliest month of November 2004 when 137 American troops were slain, an independent toll by icasualties.org showed. The previous low was in May this year when 19 soldiers were killed.

Since the US-led invasion of March 2003 that toppled now executed dictator Saddam Hussein, a total of 4,125 US troops have been killed in Iraq, according to independent website icasualties.org.

The downward trend began in the middle of last year after a US troop “surge”, although there were two spikes in bloodshed in March and April when fierce fighting erupted between Shiite militiamen and US-led forces.

Icasualties.org said the number of Iraqi civilian dead fell to 302 in July, the lowest since April 2005, from 373 in June while the toll among Iraqi security forces rose in July to 91 from 77.

The commander of US forces in Iraq, General David Petraeus, said in an interview published two days ago that overall violence was falling to almost “normal” levels.

But he warned that the trend could be reversed by “sensational attacks” such as two bombings on Monday that rocked Baghdad and the northern oil hub of Kirkuk in which about 56 Iraqis were killed and more than 200 wounded.

“If you could reduce these sensational attacks further, I think you are almost approaching a level of normal or latent violence,” Petraeus told USA Today.

“The fact that the levels of violence have come down so significantly and stayed down now for some two-and-a-half months… indicates there is a degree of durability.”

Icasualties.org estimates that a total of 42,922 civilians have died since it began tallying figures in March 2005, but warns that its count cannot be verified, and the actual toll is much higher.

The United States and Iraq are still trying to hammer out an agreement governing US troops levels in the country beyond 2008 when the UN mandate covering the presence of foreign soldiers expires.

In principle, Thursday was the deadline set in November by US President George W. Bush and Iraqi Prime Minister Nuri al-Maliki to sign a Status of Forces Agreement.

Maliki this month shook the White House by saying he was in favour of setting a date for the withdrawal of US combat troops in Iraq, where the US force currently totals about 142,500.

The White House said earlier this month it did not think Baghdad and Washington would meet the July 31 deadline for the pact, which could be a few days or a couple of weeks ago.

Iraqi Interior Minister Jawad Bolani said on Monday that he believed they were “moving in the right direction” towards concluding an agreement, despite some opposition in Iraq.

Radical anti-American Shiite cleric Moqtada al-Sadr said in a statement on Thursday that he objected to a deal with the “occupier” and urged Iraqis to stand up against the pact.

Asked whether Iraqi troops could fill the void created by a US withdrawal, Bolani said the issue was being evaluated by his ministry against factors such as experience and training of Iraqi forces.

To date 10 of Iraq’s 18 provinces have been handed over to the Iraqis.

“After all that perhaps we can determine, look into the issue of decreasing the forces or decreasing the amount of personnel there,” he said, adding that Iraqi forces had demonstrated their ability to contain the “threat of terrorism.”

Obama’s Germany Speech

In listening and watching this speech I wanted to give my analysis.
At about 4 Minutes he starts to talk about Germany and Proclaims:

The size of our forces was no match for the much larger Soviet Army. And yet retreat would have allowed Communism to march across Europe. Where the last war had ended, another World War could have easily begun. All that stood in the way was Berlin.

No one else sees the Irony of this statement?
The very man who is part of a party and an ideology that believes that the path to victory is through defeat and retreating.

At about 5 Minutes he continues to talk of Freedom.
Another bit of Irony since Obamas vision of freedom is one that removes the 2nd amendment from the people. That freedom is put in place for the individual against the possibly tyranny of the govt. The man speaks of freedom yet his goal is to create a large role for govt and govt programs then ever before.

At about 7 minutes he talks about the Berlin Wall.
The funniest thing about this portion of the speech is that at the time that the wall fell down, it was not a moment to be proud of the US for Obama’s wife. Nope not at all. Not till recently has she been proud of this nation and its efforts.

At 8 minutes he talks about global warming. Damn Boston with their industrial section. They are melting the polar ice caps! But he said something about droughts in Kansas. Kansas has had some of the wettest times in decades.

At 9 minutes he talks about Nuclear Weapons, yet by his own admission he would negotiate with terrorist organization and nations like Iran without precondition. Its not till recently that this position has been massaged differently in the MSM, to make people believe that it has always been his position.

So I am guessing at about 9:10 that we are going to be going into Darfur to stop that Civil War. Hmmmm, I thought we cannot go into Civil War and solve it militarily?

At about 9:45 he talks about more terrorists threats, yet many in his own party, the liberal wing which really is the base, do not believe these people to be massive threats as he states here. Sounds like more platitudes to me. Empty rhetoric and such. Hell a leader in his party and presidential candidate just months ago called Terrorism a Bump Sticker slogan. A man whom I believe will be the AG of the nation should Obama win.

At about 11:30 he talks about more Unity with the European nations. So which way is the unity going to swing? More towards the socialist tendencies of European nations?

At about 15 minutes, aside from my urge to sing the song “Give peace a Chance” I noticed that he again talks about terrorism and extremists terrorists. Oddly enough it was recently stated by a Judge in England that Shiite law can coexist with Modern British law. Is this the sort of unity that he speaks of?

At 16 minutes he again talks about Afghanistan and the terrorists in Afghanistan, but again he refuses to acknowledge the terrorists that are in Iraq, the ones that caused the sectarian split and amplified it. The ones that are being beaten back by Iraqi and US forces coming together in what has been termed as ‘the surge’ and the success that has come from that endeavor.

Fascinating how all that he is stating for Afghanistan cannot be said for Iraq for his supporters. Absolutely stunning really.

Also in the video, CBS missed the dude with the American Flag that was upside down (18:05 minutes)

18:45 he talks about:

This is the moment when we must build on the wealth that open markets have created, and share its benefits more equitably. Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favors the few, and not the many. Together, we must forge trade that truly rewards the work that creates wealth, with meaningful protections for our people and our planet. This is the moment for trade that is free and fair for all.

Which translation means. We better hang on for the new flood of Wealth Redistribution, which has shown time and time again never works, and never accomplishes the goals which they set out to achieve.

What Obama fails to grasp here is that the growth will not be possible if your goal is to increase the taxation on corporations, since what they will do is seek other locations that will be more receptive to less taxation.

20 minutes he talks about Iraq:

And despite past differences, this is the moment when the world should support the millions of Iraqis who seek to rebuild their lives, even as we pass responsibility to the Iraqi government and finally bring this war to a close.

Had it been up to Obama, we would not have had the surge to train the Iraqi forces to be able to take responsibility for their government. We would not have the stability that has come about to give breathing room for the political parties of Iraq to talk without a bomb going off outside.

That is the ridiculousness of Obama’s speech and his rhetoric. That even when wrong, he can’t seem to admit it, despite the overwhelming facts to the contrary staring at him in his face.

LOL I just realized he is wearing a Lapel pin. Where are the supporters now of him not wearing one? Good stuff.

23 minutes he talks about

Will we welcome immigrants from different lands

Just as a note, we do, just that they NEED TO follow the rule of law that he spoke about in that same little breath. Allowing a nation to be overrun with people that laugh in the face of the rule law isn’t the sort of immigrants that I want nor that people should accept into this nation.

Whoa Whoa… 24 Minutes in:

indeed, every language is spoken in our country

Just 2 weeks ago Obama was saying that all we can say in France was Merci Boucoup. WTF?

Lots of Platitudes and Lots of Ideology….
All that was needed from this video was the “Kumbaya” song.

Obama the Messiah has arriveth

This man is so presumptuous that this article fits perfectly.

News Link

He ventured forth to bring light to the world
The anointed one’s pilgrimage to the Holy Land is a miracle in action – and a blessing to all his faithful followers

And it came to pass, in the eighth year of the reign of the evil Bush the Younger (The Ignorant), when the whole land from the Arabian desert to the shores of the Great Lakes had been laid barren, that a Child appeared in the wilderness.

The Child was blessed in looks and intellect. Scion of a simple family, offspring of a miraculous union, grandson of a typical white person and an African peasant. And yea, as he grew, the Child walked in the path of righteousness, with only the occasional detour into the odd weed and a little blow.

When he was twelve years old, they found him in the temple in the City of Chicago, arguing the finer points of community organisation with the Prophet Jeremiah and the Elders. And the Elders were astonished at what they heard and said among themselves: “Verily, who is this Child that he opens our hearts and minds to the audacity of hope?”

In the great Battles of Caucus and Primary he smote the conniving Hillary, wife of the deposed King Bill the Priapic and their barbarian hordes of Working Class Whites.

And so it was, in the fullness of time, before the harvest month of the appointed year, the Child ventured forth – for the first time – to bring the light unto all the world.

He travelled fleet of foot and light of camel, with a small retinue that consisted only of his loyal disciples from the tribe of the Media. He ventured first to the land of the Hindu Kush, where the

Taleban had harboured the viper of al-Qaeda in their bosom, raining terror on all the world.

And the Child spake and the tribes of Nato immediately loosed the Caveats that had previously bound them. And in the great battle that ensued the forces of the light were triumphant. For as long as the Child stood with his arms raised aloft, the enemy suffered great blows and the threat of terror was no more.

From there he went forth to Mesopotamia where he was received by the great ruler al-Maliki, and al-Maliki spake unto him and blessed his Sixteen Month Troop Withdrawal Plan even as the imperial warrior Petraeus tried to destroy it.

And lo, in Mesopotamia, a miracle occurred. Even though the Great Surge of Armour that the evil Bush had ordered had been a terrible mistake, a waste of vital military resources and doomed to end in disaster, the Child’s very presence suddenly brought forth a great victory for the forces of the light.

And the Persians, who saw all this and were greatly fearful, longed to speak with the Child and saw that the Child was the bringer of peace. At the mention of his name they quickly laid aside their intrigues and beat their uranium swords into civil nuclear energy ploughshares.

From there the Child went up to the city of Jerusalem, and entered through the gate seated on an ass. The crowds of network anchors who had followed him from afar cheered “Hosanna” and waved great palm fronds and strewed them at his feet.

In Jerusalem and in surrounding Palestine, the Child spake to the Hebrews and the Arabs, as the Scripture had foretold. And in an instant, the lion lay down with the lamb, and the Israelites and Ishmaelites ended their long enmity and lived for ever after in peace.

As word spread throughout the land about the Child’s wondrous works, peoples from all over flocked to hear him; Hittites and Abbasids; Obamacons and McCainiacs; Cameroonians and Blairites.

And they told of strange and wondrous things that greeted the news of the Child’s journey. Around the world, global temperatures began to decline, and the ocean levels fell and the great warming was over.

The Great Prophet Algore of Nobel and Oscar, who many had believed was the anointed one, smiled and told his followers that the Child was the one generations had been waiting for.

And there were other wonderful signs. In the city of the Street at the Wall, spreads on interbank interest rates dropped like manna from Heaven and rates on credit default swaps fell to the ground as dead birds from the almond tree, and the people who had lived in foreclosure were able to borrow again.

Black gold gushed from the ground at prices well below $140 per barrel. In hospitals across the land the sick were cured even though they were uninsured. And all because the Child had pronounced it.

And this is the testimony of one who speaks the truth and bears witness to the truth so that you might believe. And he knows it is the truth for he saw it all on CNN and the BBC and in the pages of The New York Times.

Then the Child ventured forth from Israel and Palestine and stepped onto the shores of the Old Continent. In the land of Queen Angela of Merkel, vast multitudes gathered to hear his voice, and he preached to them at length.

But when he had finished speaking his disciples told him the crowd was hungry, for they had had nothing to eat all the hours they had waited for him.

And so the Child told his disciples to fetch some food but all they had was five loaves and a couple of frankfurters. So he took the bread and the frankfurters and blessed them and told his disciples to feed the multitudes. And when all had eaten their fill, the scraps filled twelve baskets.

Thence he travelled west to Mount Sarkozy. Even the beauteous Princess Carla of the tribe of the Bruni was struck by awe and she was great in love with the Child, but he was tempted not.

On the Seventh Day he walked across the Channel of the Angles to the ancient land of the hooligans. There he was welcomed with open arms by the once great prophet Blair and his successor, Gordon the Leper, and his successor, David the Golden One.

And suddenly, with the men appeared the archangel Gabriel and the whole host of the heavenly choir, ranks of cherubim and seraphim, all praising God and singing: “Yes, We Can.”

Media Political Slant?

Naaaa…

News Link

3 Anchors to Follow Obama’s Trek Abroad
The three network anchors will travel to Europe and the Middle East next week for Barack Obama’s trip, adding their high-wattage spotlight to what is already shaping up as a major media extravaganza.

Lured by an offer of interviews with the Democratic presidential candidate, Brian Williams, Charlie Gibson and Katie Couric will make the overseas trek, meaning that the NBC, ABC and CBS evening newscasts will originate from stops along the route and undoubtedly give it big play.

John McCain has taken three foreign trips in the past four months, all unaccompanied by a single network anchor.

Obama has “proven adept at generating excitement,” says David Folkenflik, media correspondent for National Public Radio. He said the anchors hope “a little bit of that excitement will rub off on their newscasts if they can convey an American phenomenon abroad, if that’s what it turns out to be. Senator McCain is not as magnetic a figure in that way.”

Jim Geraghty, a columnist for National Review Online, said Obama’s paucity of foreign travel as a presidential candidate makes the trip a natural draw for news organizations, while “McCain has been around forever, and he’s probably been to all these places before.” But, he says, “the networks will be acting as a PR wing for the Obama campaign if they treat any of these photo ops as truly newsworthy breakthroughs.”

The plan is for Williams, Gibson and Couric interviews to be parceled out on successive nights in different countries, giving each anchor a one-day exclusive. (Correspondents could have done the interviews instead, but a certain competitiveness sets in once one or two anchors agree to go.) The Washington Post is withholding the scheduled locations for security reasons.

Some 200 journalists have asked to accompany Obama on the costly trip, which will include stops in Iraq and Afghanistan, but the campaign will be able to accommodate only one-fifth that number. No itinerary has been announced.

The senator from Illinois has been drawing far more media attention than his Republican rival from Arizona. With this week’s Newsweek cover story on Obama’s religious beliefs, he has been featured on Time and Newsweek covers 12 times in the past three years, compared with five for McCain. This week’s New Yorker includes a 14,600-word piece on Obama’s political rise in Chicago. Obama and his wife, Michelle, were recently on the cover of Us Weekly and were interviewed — with their young daughters, which Obama later said he regretted — by “Access Hollywood.”

When McCain visited Britain, France and Israel in March and met with their leaders, no network anchors tagged along. NBC and ABC sent correspondents; CBS did not. None of the evening newscasts covered his trip to Canada last month. And McCain’s swing through Colombia and Mexico two weeks ago was barely covered, although NBC and ABC sent correspondents.

The upcoming Obama trip, by contrast, has already generated stories about how large his crowds will be and whether German authorities will allow him to speak at the Brandenburg Gate. “Europe Awaits Obama With Open Arms,” the Los Angeles Times reported yesterday.

Shutdown UBS?

That is the call today by Senator Levin.
As if the banking industry needs anything else to be jittery about.
Are these folks up in DC that stupid?

News Link

Federal regulators should consider revoking the US banking license of the giant Swiss Bank UBS because of its role in helping wealthy Americans evade billions of dollars in taxes, Sen. Carl Levin (D-MI) told ABC News today.

“I don’t think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act,” Levin said.

UBS’s role in arranging “undeclared” accounts for an estimated 19,000 US citizens was one focus of a hearing by the Senate Permanent Subcommittee on Investigations, chaired by Levin today. The role of the LGT bank, owned by the royal family of Liechtenstein, was also investigated.

Levin said UBS practices resulted in its U.S. clients maintaining undeclared Swiss accounts that collectively held “$18 billion dollars in assets that have been kept secret from the the IRS.”

“They wanted secrecy. UBS gave them secrecy,” Levin said.

Levin revealed a list of “secrecy tricks” he said the UBS bankers used to carry out their tax haven schemes.

The list includes code names for clients, using untraceable pay phones, encrypted computers, fake trusts, counter-surveillance training, and shredding files.

Levin said UBS hid behind Swiss bank secrecy laws to hide its misconduct, and offered services in the US it was not licensed to provide.

UBS is the world’s largest private bank catering to wealthy individuals.

One of its bankers, Bradley Birkenfeld, has already pleaded guilty in the US to tax evasion and fraud and is cooperating with federal prosecutors in Miami.

In a plea agreement, Birkenfeld detailed how he said he had been trained by UBS to help wealthy Americans evade taxes.

In one case, Birkenfeld told prosecutors he purchased diamonds using a US client’s Swiss bank account and smuggled the diamonds into the United States in a toothpaste tube.

He called for passage of new laws to end tax haven abuses.

“Tax havens,” said Levin, “are engaged in economic warfare against the United States and honest, hardworking American taxpayers.”

Maybe if you stopped taxing the living shit out of peoples accounts they would keep the money here and increase the savings amounts in the US!? In turn increasing deposits in US banks, increasing the availably capital banks need to stay liquid.

Naa that would be crazy talk, they need to tax you when you make the money, tax you when you pay the govt for the money, tax you when you save the money, tax you when you invest the money, tax you for living on your property and tax you when you die so that your heirs can pay more taxes on that as well.

Moron! Fix the taxing system not shut down a bank!

Fining companies for Illegals.

This is the right move.
More of this happens and that stem of illegals will drop off significantly!

News Link

A company that owns 11 McDonald’s restaurants in Nevada was fined one million dollars Wednesday after pleading guilty to employing 58 illegal immigrants.

The company, Mack Associates Inc., knew the employees were illegal immigrants and had offered them names and social security numbers belonging to other people, the US Justice Department said.

The company pleaded guilty in federal court in Las Vegas to conspiracy to encourage and induce an alien’s unlawful residence in the United States and aiding and abetting an alien to remain in the country, the department said.

The company’s director of operations also pleaded guilty to aiding and abetting an alien to remain in the country.

And the former vice president of Mack Associates pleaded guilty to inducing an illegal alien to remain in the United States and faces a possible sentence of up to five years in prison and a 250,000 dollar five.

About 30 of the illegal workers have returned to their native countries while the rest were allowed to stay in the United States until the case closes.

This is one of the many solutions I have proposed on this site. You clamp down on the crossings on the border. You start making it fiscally counterproductive for companies to hire illegals and you will solve this problem and never had to use a single bus.

Kudos to the prosecutors in this case seeking to fine the company for their actions, and not just some small amount either.

More Oil!

We need more oil. This is not secret. In fact it hasn’t been a secret for the last 30 years.
We’ve just been denying it:

News Link

The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.

That was Jimmy Carter speaking about the Oil Crisis then in 1979.
Carter was a horrible President, but he had that right at least. We are in an Oil Crisis. His solution though was about as dumb as the solutions by the Democrats today in Congress. Do nothing.

This week Bush stepped up the stakes in the Drilling for more Oil game.
He lifted the executive order by his Father Bush that placed a moratorium on drilling along our coasts. A moratorium that held for 18 years and even longer for congress. 27 Years has been too long.

Now, I nor anyone else for that matter is saying that it is the magic bullet. But the reality is that if 28 years ago we were drilling along the coast, we probably would not have this problem right now. Like most things though, people and govt all look at things in the NOW.

This from Obama a month ago:

It would have long-term consequences for our coastlines, but no short-term benefits, since it would take at least 10 years to get any oil,” he said.

There are so many arguments floating around that the drilling now won’t fix the current problem.
Reality check people (and Obama). NOTHING we do right NOW will fix the CURRENT problem. Well other than reducing our debt, but even that is not a NOW fix.

But it won’t get any better by doing nothing. Which is the Obama proposal. Don’t drill at all. That is stupid.

We have not Built a refinery in the US for 30 years. Not a single new Nuclear Plant in 30 years. We basically just STOPPED doing anything or rather banned companies from doing anything. That hasn’t worked at all. In fact its made things worse. Now over the next 20 years (if Congress lifts these bans) we will see a huge spike in Nuclear building, clean energy building and Oil production.

Its not if, but when. Its not why its how fast.

With Bush playing the first card it puts the pressure back on Congress (with already single digit approval numbers) to do something. Its time to lift the ban, we can do it responsibly, we can do it now so that my kids in 20 years aren’t writing in some blog as well on the same problems his dad talked about. Meanwhile Oil is at 500 a barrel.

Mae, Mac and Indy

These last couple weeks has been filled with more economic woes.

IndyMac has failed, mostly fueled by speculation of its demise which forced a run on the bank. Always a dangerous thing. Part of it, if not most of it was fueled by a letter written by Senator Chuck Shumer of NY on June 26th. Midday trading Friday (usually a light day) showed IndyMac up 75 cents. News of the run hadn’t trickled down yet.

News Link

The U.S. Senator who leads the Senate subcommittee that oversees the Federal Reserve and economic policy has written letters to federal bank regulators questioning the condition of IndyMac Bancorp Inc. of Pasadena, news services reported Friday.

Sen. Charles Schumer, a Democrat from New York, sent the letters to the Federal Deposit Insurance Corp., the Office of Thrift Supervision, the Federal Housing Finance Board and the Federal Home Loan Bank of San Francisco. The letters reportedly said Schumer is concerned IndyMac “may have serious problems with its current loan holdings, and could face a failure if prescriptive measures are not taken quickly.”

Schumer, who serves on the Senate Committee on Banking, Housing and Urban Affairs and is chairman of its Economic Policy Subcommittee, cited concerns that the bank’s condition is a risk to taxpayers and borrowers.

Moody’s Investors Service Inc. on Tuesday downgraded IndyMac.

Fast forward 2 days later and we begin to see lots of people making large withdraws from IndyMac, causing a run on the bank.

News Link

Battling rumors that it may collapse, Pasadena-based IndyMac Bancorp acknowledged Monday that its financial position had deteriorated but described the fears as overblown and said it was working with regulators to improve its “safety and soundness.”

IndyMac, a national home lender burned by the mortgage meltdown, went public after depositors lined up at San Gabriel Valley branches starting Friday to pull out their money. Striving to reassure them, the thrift said nearly all their deposits were insured by the Federal Deposit Insurance Corp.

Nonetheless, Elizabeth Brown closed four accounts totaling $200,000 Monday at an Arcadia branch where about 20 customers were lined up at noon, saying: “The only reason I’m panicking is if anything happens, my money is tied up.

“I don’t want to take the chance,” said Brown, 62, of Temple City. “I’m going to put my money somewhere else, and if they come back, I’ll come back.”

Rick McPherson, 64, said he grew worried after hearing news reports that IndyMac was struggling, and withdrew $1,000 he had at IndyMac.

“I’m not certain what happens when a bank fails,” said McPherson, a printer from Arcadia. “I don’t trust the economy right now.”

The concerns were triggered by Sen. Charles E. Schumer (D-N.Y.), chairman of the Joint Economic Committee, who said in public letters to the FDIC and other bank regulators Thursday that IndyMac “could face a failure if prescriptive measures are not taken quickly.” IndyMac said Monday that Schumer had created the “wrong impression” about the savings and loan’s risks.

IndyMac, which operates 31 offices and also takes deposits over the Internet, said the outflow of money increased on Saturday after continuing news coverage of Schumer’s remarks. The outflow Friday and Saturday totaled about $100 million, or about 0.5% of its total deposits of $19 billion, the company said.

That all happened over the weekend just 24-48 hours AFTER Schumers remarks.

Schumer in turn fired back days later that the run was not his fault but the Bush Administrations fault.

News Link

“The administration is doing what they always do, blaming the fire on the person who called 911,” Schumer said, according to the Associated Press’ story from the news conference in New York.

Remember folks, Politics and Finance – they are are all connected.

Schumer basically put his foot out too far on a bank that was already in a bit of distress and with his lone comments caused a major run on the bank in not only hours after, but days after as well. In the 11 days that followed, depositors withdrew more than $1.3 billion from IndyMac, leaving the bank unable to function. Via Fox Today cops were dispatched to calm the crowds as the news made its way to more people of the failure of the bank.

For Schumer to privately raise concerns within his oversight committee would be totally fine, for him to raise these concerns with a public letter are utterly ridiculous. That it was leaked from his office would should (I think) lead to an investigation. In Schumers supposed efforts to “save depositors” at the Bank, he created a much larger problem that hopefully does not trickle down to many other banks.

Fears at Wachovia have now started, as well as other banks.
Thankfully today Wells Fargo reported better than expected earnings.

On to the next problem.
Fannie Mae and Freddie Mac both seem to be on the path to a bail out from the federal govt.  The fed spelled their plan out on Monday as to what they are going to do with these two quasi public companies.

Yahoo News

Fannie Mae and Freddie Mac were volatile after tumbling last week amid concerns they would succumb to losses in their mortgage portfolios. The Fed said it would lend to the two companies “should such lending prove necessary.” Treasury Secretary Henry Paulson said his department is asking Congress for quick approval of a plan to expand its line of credit to the two companies and to make an equity investment in them if necessary.

Troubling indeed. Mae and Mac both have over 5 Trillion dollars in Mortgage debt that they hold. Taking on this massive amount of “assistance” would double the Nations Debt OVERNIGHT! Quite possibly causing the largest meltdown of History as American Bonds start to plummet over the massive debt incurred. A massive drop in the dollar, Oil doubling and total Chaos really.

Scary thought indeed. Are we to continue down the path that no matter how large you get the govt will bail you out of a crisis? Is that really what we want to create? A system where we say, get as large as possible, take out the most risk possible and then let the govt come in and bail us out.

That is not the free market economy we should be embracing.

Jim Rogers said more on Marketplace yesterday which is spot on:

Jim Rogers: Well, this plan is adding huge amounts of debt to the American government’s burden. Last weekend, we ran up $5 trillion, the same amount of debt that it took 200 years to accumulate. The world knows that’s an unbelievable burden added to any government, especially the one which is already deeply in debt. It’s bad for the economy, it’s bad for interest rates, it’s bad for inflation and it’s bad for the currency.

Jagow: As you say, $5 trillion in debt — that’s what Fannie and Freddie control; about half the U.S. mortgage market. How in the world can we let them fail?

Rogers: Well, it’s better to let them fail now if you ask me than wait two or three years when it’s going to be $10 trillion or who knows how much else because if we keep doing this, the United States government, who’s going to buy American government bonds? If you were a foreigner and you saw that the government added huge amounts of debt annually, would you continue to buy American government bonds? I mean, I wouldn’t and I’m an American.

Jagow: Alright, so if we don’t backstop Fannie and Freddie, what do we doe?

Rogers: Well, my view would be we let them fail and they’ll be reorganized in bankruptcy court. We’ve been having bankruptcies for a couple hundred years and for a few thousand years through the world. Let them go bankrupt, let them be reorganized, we clean out the system, I’d hope we put a few people in jail from Fannie Mae and Freddie Mac and we can start over. I’d rather do that, as painful as it’s going to be, than have to do it in two, three, five, whatever number of years it’s going to be.

Jagow: What do you think it will take to restore the confidence of foreign investors?

Rogers: Well, you’ve got to change the whole government structure of running up gigantic deficits in America and it’s going to cause some very radical changes. You know, most countries throughout history, when they’ve gotten themselves in financial trouble, they’ve never gotten themselves out unless they had a crisis or a semi-crisis. I’m afraid we’re going to be just like every other country and we’re going have to have our crisis or our semi-crisis and then maybe we’ll make some needed changes.

Politics however seem to be trumping sound financial moves. As we are seeing with the Bush Administrations latest moves to pump more liquidity into Mac and Mae. They are too large to let fail.

Letting a company fail, no matter how large they are, will cause some pain, locally, hell even nationally. But in the end after the dust settles the market finds its way back if you let it. We saw the collapse of Enron, Worldcom (sure they are different animals) but in the end, the market corrected itself. Another company came in and took over the gap for Enron and along we went for the last 5 years in economic expansion.

All these things do is cause knee jerk reactions by Congress. Such as the new move to stop short selling. Does that now mean that my shorts on JP are no longer valid? WTF?

What kind of Capitalism are we running here?

News Link

The U.S. Securities and Exchange Commission subpoenaed Wall Street’s biggest firms and hedge-fund advisers in a widening effort to crack down on suspected manipulation of Lehman Brothers Holdings Inc. and Bear Stearns Cos. shares, said three people with knowledge of the matter.

The SEC’s enforcement unit demanded information from investment banks including Goldman Sachs Group Inc., Deutsche Bank AG and Merrill Lynch & Co., according to two of the people, who declined to be identified because the inquiries aren’t public. The Washington-based regulator is seeking trading records and e- mails, one of them said.

The subpoenas mark a new front in the broadest U.S. investigation of Wall Street trading since state and federal regulators targeted mutual-fund abuses in 2003. The SEC issued an emergency order yesterday curtailing short selling in financial stocks, including Lehman and mortgage-finance companies Fannie Mae and Freddie Mac. The agency also is examining whether securities firms have adequate controls to thwart misconduct.

“The SEC is trying to determine whether there was illegal manipulation of market prices, and that is far easier to do if you have a broad sweep,” said Tamar Frankel, a law professor at Boston University.

Bull!
Lehman has been known for taking out loans on B and C Paper. Those are the most riskiest loans. That is why they are being shorted. Their books tell the story of a company that will not post profits and in fact will post losses for probably the next 2 years.

I’ll end this with some failed logic by Paulson:

Mr. Paulson walked lawmakers through his logic. By giving him the authority to spend an unlimited amount of money, he said, the markets would accept that the government’s commitment is solid, and that would increase confidence.

Quite the opposite Mr. Paulson. Bonds tells the tale of that failed logic as well as the drop of the dollar yesterday.

Canadian Health Care Architect says “System is in crisis”

We’ve talked about Socialized Health care a few times, pointing out the obvious failures of it. No matter what country its in, it sucks. Well here is some more for those that still think that the ‘Change’ we need is towards a system that even its architect says is a failure!

New Link

Canadian Health Care We So Envy Lies In Ruins, Its Architect Admits

As this presidential campaign continues, the candidates’ comments about health care will continue to include stories of their own experiences and anecdotes of people across the country: the uninsured woman in Ohio, the diabetic in Detroit, the overworked doctor in Orlando, to name a few.

But no one will mention Claude Castonguay — perhaps not surprising because this statesman isn’t an American and hasn’t held office in over three decades.

Castonguay’s evolving view of Canadian health care, however, should weigh heavily on how the candidates think about the issue in this country.

Back in the 1960s, Castonguay chaired a Canadian government committee studying health reform and recommended that his home province of Quebec — then the largest and most affluent in the country — adopt government-administered health care, covering all citizens through tax levies.

The government followed his advice, leading to his modern-day moniker: “the father of Quebec medicare.” Even this title seems modest; Castonguay’s work triggered a domino effect across the country, until eventually his ideas were implemented from coast to coast.

Four decades later, as the chairman of a government committee reviewing Quebec health care this year, Castonguay concluded that the system is in “crisis.”

“We thought we could resolve the system’s problems by rationing services or injecting massive amounts of new money into it,” says Castonguay. But now he prescribes a radical overhaul: “We are proposing to give a greater role to the private sector so that people can exercise freedom of choice.”

Castonguay advocates contracting out services to the private sector, going so far as suggesting that public hospitals rent space during off-hours to entrepreneurial doctors. He supports co-pays for patients who want to see physicians. Castonguay, the man who championed public health insurance in Canada, now urges for the legalization of private health insurance.

In America, these ideas may not sound shocking. But in Canada, where the private sector has been shunned for decades, these are extraordinary views, especially coming from Castonguay. It’s as if John Maynard Keynes, resting on his British death bed in 1946, had declared that his faith in government interventionism was misplaced.

What would drive a man like Castonguay to reconsider his long-held beliefs? Try a health care system so overburdened that hundreds of thousands in need of medical attention wait for care, any care; a system where people in towns like Norwalk, Ontario, participate in lotteries to win appointments with the local family doctor.

Years ago, Canadians touted their health care system as the best in the world; today, Canadian health care stands in ruinous shape.

Sick with ovarian cancer, Sylvia de Vires, an Ontario woman afflicted with a 13-inch, fluid-filled tumor weighing 40 pounds, was unable to get timely care in Canada. She crossed the American border to Pontiac, Mich., where a surgeon removed the tumor, estimating she could not have lived longer than a few weeks more.

The Canadian government pays for U.S. medical care in some circumstances, but it declined to do so in de Vires’ case for a bureaucratically perfect, but inhumane, reason: She hadn’t properly filled out a form. At death’s door, de Vires should have done her paperwork better.

De Vires is far from unusual in seeking medical treatment in the U.S. Even Canadian government officials send patients across the border, increasingly looking to American medicine to deal with their overload of patients and chronic shortage of care.

Since the spring of 2006, Ontario’s government has sent at least 164 patients to New York and Michigan for neurosurgery emergencies — defined by the Globe and Mail newspaper as “broken necks, burst aneurysms and other types of bleeding in or around the brain.” Other provinces have followed Ontario’s example.

Canada isn’t the only country facing a government health care crisis. Britain’s system, once the postwar inspiration for many Western countries, is similarly plagued. Both countries trail the U.S. in five-year cancer survival rates, transplantation outcomes and other measures.

The problem is that government bureaucrats simply can’t centrally plan their way to better health care.

A typical example: The Ministry of Health declared that British patients should get ER care within four hours. The result? At some hospitals, seriously ill patients are kept in ambulances for hours so as not to run afoul of the regulation; at other hospitals, patients are admitted to inappropriate wards.

Declarations can’t solve staffing shortages and the other rationing of care that occurs in government-run systems.

Polls show Americans are desperately unhappy with their system and a government solution grows in popularity. Neither Sen. Obama nor Sen. McCain is explicitly pushing for single-payer health care, as the Canadian system is known in America.

“I happen to be a proponent of a single-payer health care program,” Obama said back in the 1990s. Last year, Obama told the New Yorker that “if you’re starting from scratch, then a single-payer system probably makes sense.”

As for the Republicans, simply criticizing Democratic health care proposals will not suffice — it’s not 1994 anymore. And, while McCain’s health care proposals hold promise of putting families in charge of their health care and perhaps even taming costs, McCain, at least so far, doesn’t seem terribly interested in discussing health care on the campaign trail.

However the candidates choose to proceed, Americans should know that one of the founding fathers of Canada’s government-run health care system has turned against his own creation. If Claude Castonguay is abandoning ship, why should Americans bother climbing on board?

Prepare folks.
Universal health care is coming.
If and when Obama wins he will get it passed with the help of the Democrat party in Congress.

Speaking Democrat

Why I don’t want to drill for oil in ANWAR.

Over the years I have found out that I tend to be fiscally conservative and socially moderate. That means, of course, that neither party has much use for me. Not socially conservative enough for the Republicans and definitely not liberal enough for the Democrats. Heck, I have absolutely no reason to vote for Obama and I suspect he has absolutely no intention of doing anything for me other than making me, my income, and my success into one of the bigger problems in America requiring “change”. I’ve learned to live with it and over time, the country tends to plow a middle of the road course which suits me just fine. So why wouldn’t I be for drilling in ANWAR and shooting every ecoweeny on sight? It’s not difficult to understand but it does take a little bandwidth.

I do run a business and I am a physicist by training which means I prefer to view reality for what it is, and not delude myself into believing there is alternate reality just around the corner. So here is reality one, we aren’t going to pay the deft off. Without up to the nanosecond calculation, let’s say the debt is four trillion dollars. Let’s also say that the Democrats and the Republicans arrive at a new view of life and become fast friends. Let’s say that they trim spending and generate a $400 million surplus. They would have to keep things that way for maybe twelve years to pay the debt off, with interest. And the voting taxpayers would have to make the agreement that they will be happy paying their tax burden with no expansion of any programs to pay the debt off. My view – it will never happen. I don’t think we will ever have a government that could consistently generate a $400 million surplus and even if they did, we’d kick them all out of office if they didn’t either expand programs people want or cut taxes.

Social Security is in about the same boat. I don’t want to get into the debates of the SS funds going into the general fund and one part of the gov writing another part of the gov an IOU or the fact that the program pays out more than it takes in. I have my own ideas about how we could make some progress on it but, in truth, I doubt anything will change. For elected officials, SS is a third rail. Propose cuts and you’re not long for office. Obama wants to increase the level of contribution, almost certainly without proportionate return for those who will be required to make the contribution, but I doubt that his increase will do anything other than play accounting sleight of hand and make things appear better for a longer period of time. But he won’t fix anything.

So why do I bring those issues up when I say I am against drilling in ANWAR? The other part of reality is that some of you reading this are going to pay for my retirement just like I have paid for your parents and grandparents retirement by my payments to SS and taxes for civil servant retirement. And your children are going to pay for yours, and so on. At the same time, the gov will keep increasing the debt and the borrowing will get more expensive – those developing countries are going to find that they can buy their own bonds to build their own roads instead of buying ours so our costs will go up. I view the US oil reserves, whether you talk about ANWAR or shale or any other resource that, with technology development, will be available to those children and grandchildren that pay off the bills they accrue as well as the ones we leave to them. I don’t mean to diminish the suffering that people are suffering today with the increase gas prices but we are handling it. There are people that are seeing 15% of their income go to just gasoline and that is a tragedy in the making. For all the squealing of the conservatives playing “I told you so” about not opening up ANWAR they don’t seem to have any interest in anything other than today’s balance sheet. We are feeling the pain with oil at $130/barrel. What happens when it gets to $230 or $330/barrel? Regardless of whether you think today’s prices are driven solely by speculation or not, I can guarantee we will get to those prices for oil eventually. So, as long as anyone is willing to sell us oil and we can somehow make it work, let’s make it work. Transportation costs are going to go up and maybe not come down. After years of everyone telling me how stupid I was for keeping a manufacturing facility in the continental US, some of the brightest guys in the room are starting to bring their manufacturing, and the jobs, back here to the US because of transportation costs. WSJ had an article just yesterday on that. Fortunately, the company hadn’t held the auction and sold their manufacturing equipment off at 10 cents on the dollar so they have one leg up bringing their manufacturing back home from China. But eventually we may get to the point where people won’t sell oil, at any price, but keep it for their own uses. And that is a much different situation. I don’t have a problem with sitting on significant oil reserves at that time. Hopefully, at that time, the ecoweenies will not be able to make much of a case for using our reserves. Maybe we can remind them of what they did to food prices with  their perfect solution of ethanol. No, let’s debate and wrangle and get whatever sound bites there are to get but let’s leave those oil reserves to future Americans. It’s little enough for having them pay off our bills.