Month: April 2009

Are Your Savings Safe?

Recently in the NY Times, Andrew Ross Sorkin raised some concerns about the role the FDIC will now play in the whole bailout scheme.

The article begins by noting that the FDIC was established 76 years ago, in the depths of the Great Depression, to provide a government guarantee, initially up to $5,000 and now up to $250,000, on the bank deposits of small savers. It describes the transformation of the FDIC, under the toxic asset disposal plan of the Obama administration, as follows:

“It’s going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisition of toxic assets.”

In other words, the function of the FDIC is being transformed from guaranteeing the bank deposits of small savers to guaranteeing the investments of multimillionaire investment fund managers. And, as the article notes, this is occurring without a vote by Congress.

The FDIC will be insuring more than $1 trillion in new obligations incurred as the government covers the bad debts of the banks. However, the FDIC’s charter limits the obligations it can take on to $30 billion. The Times article quotes one “prominent securities lawyers” as saying, “They may not be breaking the letter of the law, but they’re sure disregarding its spirit.”

The Obama administration, in order to protect the wealth and power of the financial elite, is facilitating and directly perpetrating on a colossal scale the same type of accounting fraud and reckless leveraging that led to the economic catastrophe in the first place.

Who is to pay the price for this looting operation? The answer can be seen in the Obama Auto Task Force’s demands for the liquidation of much of the US auto industry and the brutal downsizing of what remains, combined with the imposition of poverty-level wages on those workers who remain in the surviving plants and the gutting of the pensions and health benefits of retirees. It can be further seen in the administration’s pledge to slash social programs, including Medicare, Medicaid and Social Security.

The administration’s “recovery” plan is a barely disguised scheme to preserve the fortunes of the financial aristocracy, whose interests it represents, by imposing poverty and social misery on the working class.

I am truly sorry, but I am having more and more concern with the bailout and just who is to benefit from it.  So far I see NO jobs being saved, few being created, few homes being saved, but yet new home starts is up.

I have given you all you need to know on what is happening, please pay attention and adjust yourself accordingly, if you can.  That tells me that developers are getting the money they need, but the people are getting foreclosure notices.  Is this what the Recovery plan is all about?

To answer the original question, yes…your savings are safe….for now, but for how long will be anyone’s guess.

Class dismissed.

Is Immigration Reform A Wise Move?

The Obama Adimn has decide to tackle yet another controversial issue in its first 100 days, but is it a wise move?  He has the political capital and he already has much on his plate, but this move could be a bit premature.

Obama plans to speak publicly about the issue in May, administration officials said, and over the summer he will convene working groups, including lawmakers from both parties and a range of immigration groups, to begin discussing possible legislation for as early as this fall.

But with the economy seriously ailing, advocates on different sides of the debate said that immigration could become a polarizing issue for Mr. Obama in a year when he has many other major battles to fight.

Opponents, mainly Republicans, say they will seek to mobilize popular outrage against any effort to legalize unauthorized immigrant workers while so many Americans are out of jobs.

Administration officials said that Mr. Obama’s plan would not add new workers to the American work force, but that it would recognize millions of illegal immigrants who have already been working here. Despite the deep recession, there is no evidence of any wholesale exodus of illegal immigrant workers, independent studies of census data show.

The Obama administration favors legislation that would bring illegal immigrants into the legal system by recognizing that they violated the law, and imposing fines and other penalties to fit the offense. The legislation would seek to prevent future illegal immigration by strengthening border enforcement and cracking down on employers who hire illegal immigrants, while creating a national system for verifying the status of new employees.

In my opinion, this subject should be approached very carefully, this could become a hot button issue, the one that the Repubs have been waiting for.  I realize that the Hispanic community feels betrayed by the President for the lack of Latinos in his cabinet and he wants to try and settle them down before the next election cycle.  But this could be a shot in the foot.  The GOP is  RUDDERLESS….do not help them find their way.

Others See A “Lost Decade” Approaching

Recently I wrote a post on the website, Eyes on Obama, (go to blogroll and click on site, it is an excellent site) where I said that there was the possibility that the US could have a Japanese style “lost decade” with the way we are handling our banks and the problems they are having.  And I am not alone, which makes me feel pretty good in an egotistical sort of way.

The U.S. economy is in for a “lasting slowdown” and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros said on Monday.

Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into “zombies” that draw the lifeblood of the economy, prolonging the economic slowdown.

The healing of the banking system and housing markets is crucial to recovery. “The banking system, as a whole, is basically insolvent,” Soros said.

What’s more, the Treasury’s Public-Private Investment Fund is going to work but it won’t be enough to recapitalize the banks in a way that they are able to or willing to provide credit.

“What we have created now is a situation where the banks who will be able to earn their way out of a hole, but by doing that, they are going to weigh on the economy,” he said. “Instead of stimulating the economy, they will draw the lifeblood, so to speak, of profits away from the real economy in order to keep themselves alive. This is the zombie bank situation.”

Pay Your Taxes, Then Protest!

Today is the day we have all dreaded all year…..Tax Day, your taxes are due or at least your extensions are due.  And then there is people like me…..Tea Party Time……(yawn!)

There are many opinions on what the day is about.  First this from Marc Cooper in the LA Times:

Go to a hobby store. Buy a scale model of a U.N. One-World-Government Black Helicopter and a tube of glue. Toss the model kit. Sniff the entire tube of glue. You’re all set for the party.

And then there is the WSJ:

It’s possible that people who demonstrate today will find that experience cathartic enough — or exhausting enough — that that will be it. But it’s more likely that the tea-party movement will have an impact on the 2010 and 2012 elections, and perhaps beyond.

Now it seems that everyone involved with this organized spontaneity is saying that it is not at all about political parties or political ideology, but rather just the average person who is sick of governmental intervention into our lives.

But yet the two most vocal cheerleaders of the “protests” are Republican heavyweights, Armey and Gingrich.  Which puts a halt to the  premise that it is not ideological.  Conservative media does not like to mention the names of the leaders of this “movement” to use the cover organizations.

An organizer for the Knoxville tea party who said that no “professional politicians” were going to be allowed to speak, and he made a big point of saying that the protest wasn’t an anti-Obama protest, it was an anti-establishment protest. I’ve heard similar things from tea-party organizers in other cities, too. Though critics will probably try to write the tea parties off as partisan publicity stunts, they’re really a post-partisan expression of outrage.

Just a few facts that I say  will not come up in the protests.  The size and scope of new tax breaks for working families implemented as part of President Obama’s economic stimulus package are historic. According to data released by the White House today, 95 percent of working families will see a reduction in their tax by $400 for individuals and $800 for households beginning this year.

A typical family with three children and an annual income of $30,000 would keep as much as $2,172 as part of the president’s tax cut plan. In addition to keeping the $800 for the working families tax cut, known as the Making Work Pay Credit, this family could benefit from new credits for child care expense and a rise in the Earned Income Tax Credit.

A married couple earning a combined $90,000 with one child in college, would save about $1,500 in 2009 through the Making Work Pay Credit and new credits for college tuition expense, according to White House budget office estimates.

Another family of four preparing to purchase their first home would earn the new $8,000 homebuyer’s credit that was included in the president’s economic stimulus package. Along with the Making Work Pay Credit, this family could save $8,800 in 2009. So far, the White House says, $3 billion have been returned to first-time homebuyers through this tax credit.

An estimated 70 percent of these new tax credits and cuts will go to 60 percent of middle-income Americans like the typical families cited here. The Obama administration’s tax policies sharply contrast with the Bush administration’s, which primarily benefited the very richest Americans.

Let us be truly honest….this is nothing but a feel good day for those people that did not get their way in the last election.  They are thoroughly pissed that the American people have rejected the conservative ideology and they are pouting.

So I stand by my assessment that the conservatives and the GOP are just a pathetic bunch of losers.

Class dismissed.

The Old ‘Bait And Hook” Ploy

Did I miss something?  Apparently, when I fell asleep the whole country got a lot more stupid while I slept.  I am talking about the Teabag protests that is being called for on April 15th.

The likes of the Newt, Dickey Armey, and their lobbyists buds are leading a new tax protest.  Basically they want to protest the increase of taxes, but the taxes they are protesting are the taxes of GW and the increases of the Obama Admin on the wealthy are still 10% lower than those of the Reagan years.

The impotent GOP and its dark minions have failed miserably to punch holes in the Obama plan for the economy, so they have reverted back to an age old ploy, the bait and hook, and are using the tired subject of taxes as the bait.  This could very well bite them in the ass just as the 11th hour personal attacks on Obama did in the last election.  The hook is the misinformation that the leaders of this organized spontaneity are spreading hoping that guest speakers like Joe da Plumber will help push.

We will see just how successful the GOP “grassroots envy” is and if the dinosaurs pushing it can use their new found resources properly.

But Social Security Will Be Bankrupt

Have you heard this piece of manure coming from the conservatives?  Especially when they talk about the ways to save the program, namely privatization.  Let us look at a little truth here:

Social Security will officially be bankrupt in 2042. By 2017 a majority of the “baby boomers” will be receiving social security benefits and due to the population and labor force growth slowing down the Social Security Administration will be paying out more than they are receiving in through taxes and other means. Currently there is a 16-member commission to strengthen social security.

Then, the above by no means something is bankrupt. It simply means that the amount of money coming in will be less than that going out. This happens all the time in many businesses in many different economies and industries. Over collections in current, or future years, or years past 2042, can make up for this, as well as many other things (like other government support, program changes, a war or such lowering the number of beneficiaries, etc., etc., etc.).

The trust fund now has about $1.7 trillion and is expected to hit a peak of about $3.7 trillion in 2020; it should have enough money to handle Social Security obligations until at least 2042, according to the Social Security trustees, or even 2052, according to the Congressional Budget Office. Some economists even think the money might hold out indefinitely.

It would even be highly questionable IF a part of the US (or any government using the full force and faith of it’s powers – which include printing the money in the money supply), could go bankrupt and not pay it’s bills.

Just the facts……and the program would be able to pay 3/4 benefits through 2082.  Gee, you think that the decline in tax revenues has anything to do with the situation?

The problem is that as the government has been taking in wads of cash from the Social Security trustees who buy its bonds, it has turned right around and spent the money as part of the federal budget.  There is the REAL problem..your government has been LOOTING the fund….so stop blaming the Boomers for retiring!

Is there anyone stupid enough to think that if you eliminate revenue that you can continue to fund needed programs?  So why do the Repubs continue to push privatization?  It is a matter of ideology, not economics. It falls within the conservative fervor for free markets. It’s what the Bush-ites labeled to  “build an ownership society.”

And if they had gotten their way, there would be a lot more people homeless and broke because of the economic situation and their lame ass ideology.

New York Moves Into The Gay Marriage Fray

Gov. David A. Paterson plans to introduce legislation on Thursday to make marriage between same-sex couples legal in New York, advancing his push for greater rights for gay men and lesbians, at a time when other states have done so.

But it is also something of a political gamble, because the legislation faces an uphill climb in the State Senate. Democrats acknowledge that they do not have enough votes there to get the measure approved, meaning that its chances could rest in the hands of a few Republicans.

The governor also risks alienating socially conservative voters at a time when he can least afford to drive away any more support.

Some same-sex-marriage supporters said they hoped that by introducing the measure now, when it is likely to receive plenty of attention after the Iowa Supreme Court’s decision this month overturning a ban on same-sex marriage and the Vermont Legislature’s vote last week to override a veto of a bill allowing gay couples to marry, the governor would create momentum for the bill.

Paterson is facing an uphill battle if he wants to be re-elected as governor……this is just looking for support wherever he can find it……but beyond the game…..it is a promising sign, but as written, a very very long shot in the state legislature.

Thank God! The Worst Is Over!

JI-Ji-JI-Jive talkin’…….sorry, the BeeGees came to mind!

For the last week or so I have been hearing this from people I talk with…they get a little info from TV and they believe the hype.

U.S. bank Wells Fargo forecast a record profit, South Korea steered clear of recession, and Chinese export data beat expectations, all offering hope that the worst of the financial crisis had passed.

Encouraging data on U.S. trade and jobless claims helped Wall Street stocks end up for a fifth week on Thursday, while White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of “freefall” in months as stimulus and rescue efforts took effect.

Wells Fargo will post a $3 billion profit….thinking….how much of that is the deposit of taxpayer money?  When can we expect a check?

None of this is showing strength.

The economy shrank at a 6.3 per-cent rate in the final three months of 2008, the worst showing in a quarter-century. Some economists say that it fared about as poorly in the first three months of this year, while others expect a 4 to 5 percent rate of decline.

All this is just a dead cat bounce, in my opinion, nothing to get too excited about just yet.  Ask the average person just how optimistic they are about their financial future.  I suspect it will be a bit different than all the BS coming from the financial media.

They All Look So Pathetic

The entire GOP is just appearing rudderless and just plain pathetic.  I know this is nothing new…..but the just saying NO to everything, the blatant lies and misinformation on what, you ask……the cited CBO report on the stimulus plan…there was no such official report, the $3100 increase in energy costs…no such increase….the cuts in DOD funds…actually the Obama DOD budget increases the budget by about $4 billion….there is more but my fingers are tired…..

And then there are the cast of characters…..Boner…damn…sorry…..Boehner, Cantor, Bachmann,  McConnell, Gramm, Steele, et al.   They talk and they talk and have yet to say anything substantial….but they continue to talk.  They get their talking points and throw so much manure at the wall hoping something will stick…so far they got NOTHING!

But here comes the Big Bopper Of Boredom!

A Minnesota court confirmed yesterday that Democrat Al Franken won the most votes in his 2008 Senate race against Republican Norm Coleman.

Coleman, who had already announced plans to appeal the decision, has 10 days to do so to the state Supreme Court. Once his petition is filed, that could further delay the seating of Minnesota’s second senator for weeks.

But, in my opinion, the poster child of the GOP futility is one Norman Coleman of Minnesota.  He lost!  But he has flushed his dignity down the toilet to try and retain his senate seat.  He and his lawyer are trying every trick in the political playbook or maybe that should be the legal trick book, to try and keep his job.

He and his team have tried every sleazy tactic imaginable and yet he still has lost…it is about time to stop playing the part of the sore loser and step aside and let Minnesota have its full compliment of senators.  Mr. Coleman, you are not helping yourself, your party or the country by playing this lame ass game……if anything you look ridiculous and pathetic…time to go fishing because your political future is slowly fading into the sunset.

More Trouble Brewing For GM

General Motors Corp’s bondholders are preparing legal arguments against the automaker’s bankruptcy plan, the Wall Street Journal reported on Sunday, citing people familiar with the matter.

A plan to split the corporation into a “new” company made up of the most successful units, and an “old” one of its less-profitable units, is seen as the most sensible configuration, a source familiar with GM’s plans told Reuters last week.

The Journal said bondholders are worried that the process will push them to accept hefty losses on their investments. It said members of an ad hoc committee representing GM bondholders have made their concerns known to the Obama administration’s task force.

In a separate action, GM faces a lawsuit in Canada from unsecured bondholders over dividends GM paid from a Nova Scotia unit last May to its U.S. operations.

The bondholders claim the company wrongfully pulled around $600 million from the Canadian subsidiary because company officials should have known the U.S. business was near insolvency, according to the Journal.

GM has said in court filings that the allegations are false and that it was acting within its rights, the report said.

The U.S. Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the automaker has publicly stated it could reorganize outside of court, The New York Times reported on Sunday.

Looks like GM will be the poster child of the week in the news, huh?