Submitted by Harry Hipps II (published in the Hickory Daily Record on 10/4/2008)
After Sept. 11, we heard a lot about how we failed to connect the dots and see the danger. America is so specialized and compartmentalized that we apparently have little ability to look at our life and society as a whole.
Our politics have become corrupt and dysfunctional, corporations overpay executives and cook the books so few people really know what’s going on. Drugs, divorce, crime and incivility are so common we just tolerate them and keep on going.
I believe the root of almost all of our dilemmas stems from a severe decline, if not collapse, of our moral backbone. We removed prayer from our schools and the 10 Commandments from our courthouses. Few are well versed in the Bible or even read it. Simply mentioning the name of Jesus Christ is enough to invite cries of judgmentalism.
We suffer from poor ethics, greed, lack of compassion and a shortsightedness that focuses on what we can satisfy ourselves with right now, rather than looking out for our common good for the future.
We so completely lack any moral compass that we treat every religion, every law, every idea as equally valid when common sense and experience show that some things are right and some things are wrong, period.
We have nothing to guide us and provide the moral structure we need. The next time we see a crime, crooked politician, or corporate CEO going to jail, connect the dots. Until we get back to One Nation, Under God, we can expect more of the same.
-- Harry Hipps II
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Tuesday, October 7, 2008
Repaving on I-40 set for approval in Wake County
From the News and Observer in Raleigh (http://www.newsobserver.com/news/growth/story/1240137.html)
RALEIGH - Interstate 40 in western Wake County is in line for a resurfacing job expected to start next spring. The state Board of Transportation is expected to approve today a $13.8 million plan to repave six miles of the eight-lane freeway from Interstate 540 to the Wade Avenue exit, plus a mile of the Wade Avenue extension.
The Hounds Take : The politicians make sure that they have a nice smooth ride to work; while they expect we peons, here in Hickory, to bump and grind our way to work through the cracks and crevices of I-40 and Hwy 70. Raleigh promised to fix these roads years ago. It sure is funny how they can find money for everyone but Catawba County. If we don't start speaking up, we will continue getting the short end.
RALEIGH - Interstate 40 in western Wake County is in line for a resurfacing job expected to start next spring. The state Board of Transportation is expected to approve today a $13.8 million plan to repave six miles of the eight-lane freeway from Interstate 540 to the Wade Avenue exit, plus a mile of the Wade Avenue extension.
The Hounds Take : The politicians make sure that they have a nice smooth ride to work; while they expect we peons, here in Hickory, to bump and grind our way to work through the cracks and crevices of I-40 and Hwy 70. Raleigh promised to fix these roads years ago. It sure is funny how they can find money for everyone but Catawba County. If we don't start speaking up, we will continue getting the short end.
Monday, October 6, 2008
Goldman Sachs' Treasury - The Biggest Conflict of Interest Ever
From Wikipedia : (http://en.wikipedia.org/wiki/Goldman_Sachs)
Goldman Sachs has offices in all major world financial centers. The firm acts as a financial advisor and money manager for corporations, governments, and wealthy families around the world. Goldman offers its clients mergers & acquisitions advice, underwriting services, asset management, and engages in proprietary trading, and private equity deals. It is a primary dealer in the U.S. Treasury securities market
Hmmm, who is in charge of the U.S. Treasury securities market?
Henry Paulson, the Secretary of the U.S. Treasury. previously served as the Chairman and Chief Executive Officer of Goldman Sachs.
A wikipedia entry shows that: (http://en.wikipedia.org/wiki/Henry_Paulson)
Paulson's three immediate predecessors as CEO of Goldman Sachs — Jon Corzine, Stephen Friedman, and Robert Rubin — each left the company to serve in government: Corzine as a U.S. Senator (later Governor of New Jersey), Friedman as chairman of the National Economic Council (later chairman of the President's Foreign Intelligence Advisory Board) under President George W. Bush, and Rubin as both chairman of the NEC and later Treasury Secretary under President Bill Clinton.[14]
From Reuters : (http://www.reuters.com/article/topNews/idUSTRE4950BS20081006)
Treasury Secretary Henry Paulson is expected to name Neel Kashkari to oversee the $700 billion program to buy distressed assets from financial institutions, The Wall Street Journal reported on Sunday.
Kashkari was Treasury assistant secretary for international affairs and the former head of Goldman Sachs information technology security investment banking practice in San Francisco.
From the NY Times : (http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1)
As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.
One of the Wall Street chief executives participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.
Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.
From Bloomberg - 9/22/2008 (http://www.bloomberg.com/apps/news?pid=20601087&sid=aUj_9.k13q7s&refer=home)
Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp.
From Wikipedia - (http://en.wikipedia.org/wiki/George_Herbert_Walker_IV)
George Herbert Walker IV (born April 1969) is a Managing Director at Lehman Brothers and is a second cousin to U.S. President George W. Bush.
Walker began his career on Wall Street when he joined Goldman Sachs in the Merger Department in 1992 and six years later, in 1998, became of one of the firm's youngest partners ever. He held several senior positions at Goldman, including co-head of the firm's Wealth Management business, and head of Alternative Investment strategies. In May 2006, Walker announced that he was resigning from Goldman Sachs to become global head of rival Lehman Brothers' Investment Management division.
From Wikipedia - (http://en.wikipedia.org/wiki/Lehman_Brothers)
Lehman Brothers - On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection; the filing marks the largest bankruptcy in U.S. history.[2] The following day, Barclays plc announced its agreement to purchase, subject to regulatory approval, Lehman's North American investment-banking and trading divisions along with its New York headquarters building.[3][4] On September 20, 2008, a revised version of that agreement was approved by Judge James Peck.[5]
Goldman Sachs has offices in all major world financial centers. The firm acts as a financial advisor and money manager for corporations, governments, and wealthy families around the world. Goldman offers its clients mergers & acquisitions advice, underwriting services, asset management, and engages in proprietary trading, and private equity deals. It is a primary dealer in the U.S. Treasury securities market
Hmmm, who is in charge of the U.S. Treasury securities market?
Henry Paulson, the Secretary of the U.S. Treasury. previously served as the Chairman and Chief Executive Officer of Goldman Sachs.
A wikipedia entry shows that: (http://en.wikipedia.org/wiki/Henry_Paulson)
Paulson's three immediate predecessors as CEO of Goldman Sachs — Jon Corzine, Stephen Friedman, and Robert Rubin — each left the company to serve in government: Corzine as a U.S. Senator (later Governor of New Jersey), Friedman as chairman of the National Economic Council (later chairman of the President's Foreign Intelligence Advisory Board) under President George W. Bush, and Rubin as both chairman of the NEC and later Treasury Secretary under President Bill Clinton.[14]
From Reuters : (http://www.reuters.com/article/topNews/idUSTRE4950BS20081006)
Treasury Secretary Henry Paulson is expected to name Neel Kashkari to oversee the $700 billion program to buy distressed assets from financial institutions, The Wall Street Journal reported on Sunday.
Kashkari was Treasury assistant secretary for international affairs and the former head of Goldman Sachs information technology security investment banking practice in San Francisco.
From the NY Times : (http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1)
As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.
One of the Wall Street chief executives participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.
Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.
From Bloomberg - 9/22/2008 (http://www.bloomberg.com/apps/news?pid=20601087&sid=aUj_9.k13q7s&refer=home)
Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp.
From Wikipedia - (http://en.wikipedia.org/wiki/George_Herbert_Walker_IV)
George Herbert Walker IV (born April 1969) is a Managing Director at Lehman Brothers and is a second cousin to U.S. President George W. Bush.
Walker began his career on Wall Street when he joined Goldman Sachs in the Merger Department in 1992 and six years later, in 1998, became of one of the firm's youngest partners ever. He held several senior positions at Goldman, including co-head of the firm's Wealth Management business, and head of Alternative Investment strategies. In May 2006, Walker announced that he was resigning from Goldman Sachs to become global head of rival Lehman Brothers' Investment Management division.
From Wikipedia - (http://en.wikipedia.org/wiki/Lehman_Brothers)
Lehman Brothers - On September 15, 2008, the firm filed for Chapter 11 bankruptcy protection; the filing marks the largest bankruptcy in U.S. history.[2] The following day, Barclays plc announced its agreement to purchase, subject to regulatory approval, Lehman's North American investment-banking and trading divisions along with its New York headquarters building.[3][4] On September 20, 2008, a revised version of that agreement was approved by Judge James Peck.[5]
Sunday, October 5, 2008
The Alphabet of Leadership
A – Accountability- subject to the obligation to report, explain, or justify something; responsible; answerable. True leaders realize that actions lead to consequences whether positive or negative. This does not keep a true leader from taking action when needed.
B – Bravery - possessing or exhibiting courage or courageous endurance. Every person on this earth has fears, but it takes a special person to step forward in spite of those fears.
C – Command - to direct with specific authority or prerogative. Delegation is tough when the troops don't want to listen. Every great leader has to have power and respect for his authority. Power is not something that is annointed (or given), it has to be demanded. When the troops won't cooperate, then you have to get rid of the bad weeds to get everyone moving in the same direction.
D – Determination - the quality of being resolute; firmness of purpose. Leaders don't ever give up. It is their biggest asset and their biggest liability. You are a hero or a zero. It's easy to escape being labelled a zero by never stepping forward and taking a chance; but for society to progress, we have to have people willing to step forward.
E – Energetic - powerful in action or effect. Leaders keep going even when they are tired. That persistence leads to opportunity. When coupled with positive preparation, then good results will happen.
F – Faithful - true to one's word, promises, vows. If you are trustworthy, then people are more likely to voluntarily follow you.
G - Goals - the result or achievement toward which effort is directed. Having goals allows one to develop a plan, which makes it easier to achieve objectives.
H – Honor - honesty, fairness, or integrity in one's beliefs and actions. If you are fair to people, then (again) they are more likely to follow you.
I - Initiative - The power or ability to begin or to follow through energetically with a plan or task. Those that voluntarily step forward are a special breed. Yes, you risk possible embarassment, but the rewards far exceed anything negative that may happen. We all have things we are comfortable doing and when we are comfortable, then why not step forward. Everyone will benefit.
J - Justice - the quality of being just or fair. When a system is fair, then the atmosphere created is much more positive and conducive to creativity and progress. When it is not then wasted energy goes toward decension, bitterness, and anxiety.
K – Keeper - a person who assumes responsibility for another's behavior. A true leader realizes where the buck stops. When he delegates responsibilties, he isn't absolved of the end results. He and his troops learn from the mistakes and correct them. A true leader won't stifle his troops, because they make a mistake. He just asks that they don't repeat the same mistake.
L - Loyal - faithful to one's oath, commitments, or obligations. A person is more willing to cooperate with direction, when they realize that their leader will never sell them out to make himself look good at their expense. The leader realizes that he is as much a part of the team, as the lowest man on the totem pole.
M – Mastery - command or grasp, as of a subject. A great leader will obsess about the art that he is studying. If it means nights of little or no sleep, then so be it. Whatever it takes is what has to be done. How many ever repetitions to succeed in hitting the target or meeting the objective does not matter. It is all about gaining confidence in what you are trying to achieve.
N – Noble - Having or showing qualities of high moral character, such as courage, generosity, or honor. When someone follows the principles of chivalry, honor, integrity, and justice; then people will hold high thoughts of him. It may not happen until he leaves this earth, but that legacy is something to aspire to, whether you are spiritual or not.
O – Objective - not influenced by personal feelings, interpretations, or prejudice; based on facts; unbiased. When someone can set personal feelings aside and take emotions out of decisions, then the greater good can be achieved for everyone involved. The best results may not be achieved immediately, but in the long run they will be.
P – Plan - a scheme or method of acting, doing, proceeding, making, etc., developed in advance. We need a blueprint of where we are at and where we intend to be -- the objective. No plan will be perfect, but I have learned that it is better to deviate from specific methods, than to try to achieve good results through chaos.
Q – Quintessential - the most perfect embodiment of something. That is where we all want to arrive, no matter what the goal is -- Perfection. The more that we try to get to perfection (or best at a task); the closer we will get to it. If we don't try to get to perfection, then we won't get anywhere close.
R – Responsive - Readily reacting to suggestions, influences, appeals, or efforts. A true leader listens to his troops. Everyone in an organization deserves input. As they say, "Together Each Accomplishes More." The sum is greater than the parts. Allowing input is the greatest facilitator of initiative and innovation in any organization.
S – Strength - vigor of action, language, feeling, etc. When we talk about strength we talk about bravery, perserverance, poise, energy, and all that goes with it. Sometimes a leader will have to be forceful in his decision making, when his troops aren't following his explicit directions. This has to be done judiciously, but sometimes it is necessary to move forward.
T – Teacher - to impart knowledge or skill to; give instruction to. All great leaders are excellent instructors. They are good at taking their personal experiences and passing them along to their troops, so that they don't have to repeat the steps the they have already taken. A very experienced person with great communicative skills can lead his followers to achieve heights that may have been previously thought to be impossible.
U – Understanding - to grasp the significance, implications, or importance of. A great leader has a special cognitive reasoning to sense the past, present, and future of the objectives that he is studying and trying to achieve. He knows where he is coming from, as well as where he is trying to get to.
V - Versatile - capable of or adapted for turning easily from one to another of various tasks, fields of endeavor, etc. A great leader is a Jack of most trades and a delegator of the rest. He will lead by example, while not letting his ego get in the way of his weaknesses. He realizes that there are other people that can achieve better results in many areas, that he has less (or no) proficiency in.
W – Will - power of choosing one's own actions. A great leader won't let his vices consume him. He can focus and dedicate himself to the objectives he is striving to achieve. Vices, whether mental or physical, will definitely get in the way of success. This will cost any entity involved valuable progress, time, money, and energy.
X – Xenomorphic - in an unusual form; having a strange form. True leaders aren't conformists. They are revolutionaries and pioneers. This makes them seem eccentric, because they don't follow the crowd, the fads, and/or pop culture.
Y – Yes - Used to express great satisfaction, approval, or happiness. This is a word of positivity. It isn't what we want to hear, when we aren't succeeding. We need someone to tell us when things aren't working, because when people don't say 'no' at these times, then we end up off track, costing us time and money. The goal is that ultimate sweet exclamation YES!!!, when we have succeeded in our objective.
Z – Zeal - Enthusiastic devotion to a cause, ideal, or goal and tireless diligence in its furtherance. We all achieve more when we are really interested in a subject. Pick what you are good at and go for it. You see from all of the principles outlined that we can all lead in certain areas, but it takes a special person to direct an organization and bring the sum of all of those parts together. That is the reason we are having a problem with government at all levels. It will take very special and dedicated individuals to bring us out of the malaise we are in
B – Bravery - possessing or exhibiting courage or courageous endurance. Every person on this earth has fears, but it takes a special person to step forward in spite of those fears.
C – Command - to direct with specific authority or prerogative. Delegation is tough when the troops don't want to listen. Every great leader has to have power and respect for his authority. Power is not something that is annointed (or given), it has to be demanded. When the troops won't cooperate, then you have to get rid of the bad weeds to get everyone moving in the same direction.
D – Determination - the quality of being resolute; firmness of purpose. Leaders don't ever give up. It is their biggest asset and their biggest liability. You are a hero or a zero. It's easy to escape being labelled a zero by never stepping forward and taking a chance; but for society to progress, we have to have people willing to step forward.
E – Energetic - powerful in action or effect. Leaders keep going even when they are tired. That persistence leads to opportunity. When coupled with positive preparation, then good results will happen.
F – Faithful - true to one's word, promises, vows. If you are trustworthy, then people are more likely to voluntarily follow you.
G - Goals - the result or achievement toward which effort is directed. Having goals allows one to develop a plan, which makes it easier to achieve objectives.
H – Honor - honesty, fairness, or integrity in one's beliefs and actions. If you are fair to people, then (again) they are more likely to follow you.
I - Initiative - The power or ability to begin or to follow through energetically with a plan or task. Those that voluntarily step forward are a special breed. Yes, you risk possible embarassment, but the rewards far exceed anything negative that may happen. We all have things we are comfortable doing and when we are comfortable, then why not step forward. Everyone will benefit.
J - Justice - the quality of being just or fair. When a system is fair, then the atmosphere created is much more positive and conducive to creativity and progress. When it is not then wasted energy goes toward decension, bitterness, and anxiety.
K – Keeper - a person who assumes responsibility for another's behavior. A true leader realizes where the buck stops. When he delegates responsibilties, he isn't absolved of the end results. He and his troops learn from the mistakes and correct them. A true leader won't stifle his troops, because they make a mistake. He just asks that they don't repeat the same mistake.
L - Loyal - faithful to one's oath, commitments, or obligations. A person is more willing to cooperate with direction, when they realize that their leader will never sell them out to make himself look good at their expense. The leader realizes that he is as much a part of the team, as the lowest man on the totem pole.
M – Mastery - command or grasp, as of a subject. A great leader will obsess about the art that he is studying. If it means nights of little or no sleep, then so be it. Whatever it takes is what has to be done. How many ever repetitions to succeed in hitting the target or meeting the objective does not matter. It is all about gaining confidence in what you are trying to achieve.
N – Noble - Having or showing qualities of high moral character, such as courage, generosity, or honor. When someone follows the principles of chivalry, honor, integrity, and justice; then people will hold high thoughts of him. It may not happen until he leaves this earth, but that legacy is something to aspire to, whether you are spiritual or not.
O – Objective - not influenced by personal feelings, interpretations, or prejudice; based on facts; unbiased. When someone can set personal feelings aside and take emotions out of decisions, then the greater good can be achieved for everyone involved. The best results may not be achieved immediately, but in the long run they will be.
P – Plan - a scheme or method of acting, doing, proceeding, making, etc., developed in advance. We need a blueprint of where we are at and where we intend to be -- the objective. No plan will be perfect, but I have learned that it is better to deviate from specific methods, than to try to achieve good results through chaos.
Q – Quintessential - the most perfect embodiment of something. That is where we all want to arrive, no matter what the goal is -- Perfection. The more that we try to get to perfection (or best at a task); the closer we will get to it. If we don't try to get to perfection, then we won't get anywhere close.
R – Responsive - Readily reacting to suggestions, influences, appeals, or efforts. A true leader listens to his troops. Everyone in an organization deserves input. As they say, "Together Each Accomplishes More." The sum is greater than the parts. Allowing input is the greatest facilitator of initiative and innovation in any organization.
S – Strength - vigor of action, language, feeling, etc. When we talk about strength we talk about bravery, perserverance, poise, energy, and all that goes with it. Sometimes a leader will have to be forceful in his decision making, when his troops aren't following his explicit directions. This has to be done judiciously, but sometimes it is necessary to move forward.
T – Teacher - to impart knowledge or skill to; give instruction to. All great leaders are excellent instructors. They are good at taking their personal experiences and passing them along to their troops, so that they don't have to repeat the steps the they have already taken. A very experienced person with great communicative skills can lead his followers to achieve heights that may have been previously thought to be impossible.
U – Understanding - to grasp the significance, implications, or importance of. A great leader has a special cognitive reasoning to sense the past, present, and future of the objectives that he is studying and trying to achieve. He knows where he is coming from, as well as where he is trying to get to.
V - Versatile - capable of or adapted for turning easily from one to another of various tasks, fields of endeavor, etc. A great leader is a Jack of most trades and a delegator of the rest. He will lead by example, while not letting his ego get in the way of his weaknesses. He realizes that there are other people that can achieve better results in many areas, that he has less (or no) proficiency in.
W – Will - power of choosing one's own actions. A great leader won't let his vices consume him. He can focus and dedicate himself to the objectives he is striving to achieve. Vices, whether mental or physical, will definitely get in the way of success. This will cost any entity involved valuable progress, time, money, and energy.
X – Xenomorphic - in an unusual form; having a strange form. True leaders aren't conformists. They are revolutionaries and pioneers. This makes them seem eccentric, because they don't follow the crowd, the fads, and/or pop culture.
Y – Yes - Used to express great satisfaction, approval, or happiness. This is a word of positivity. It isn't what we want to hear, when we aren't succeeding. We need someone to tell us when things aren't working, because when people don't say 'no' at these times, then we end up off track, costing us time and money. The goal is that ultimate sweet exclamation YES!!!, when we have succeeded in our objective.
Z – Zeal - Enthusiastic devotion to a cause, ideal, or goal and tireless diligence in its furtherance. We all achieve more when we are really interested in a subject. Pick what you are good at and go for it. You see from all of the principles outlined that we can all lead in certain areas, but it takes a special person to direct an organization and bring the sum of all of those parts together. That is the reason we are having a problem with government at all levels. It will take very special and dedicated individuals to bring us out of the malaise we are in
Thursday, October 2, 2008
Let's Add this up - $1.979 trillion and counting (Initially $1.439 trillion)
AIG (American International Group) - Insurance - $85 billion bailout
http://dealbook.blogs.nytimes.com/2008/09/29/behind-aigs-crisis-an-overlooked-web-of-risk/ or http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1&ref=business&oref=slogin
Automotive Industry - $25 billion loan guarantee
http://www.search-autoparts.com/searchautoparts/Distribution/House-approves-25-billion-automotive-bailout-loan/ArticleStandard/Article/detail/553690?contextCategoryId=41884
Bear Stearns forced sale to JP Morgan - Chase - $29 billion guarantee
Fed will fund the remaining $29 billion on a non-recourse basis to JPMorgan Chase.
http://www.jpmorgan.com/cm/Satellite?c=JPM_Content_C&cid=1159339104093&pagename=JPM_redesign%2FJPM_Content_C%2FGeneric_Detail_Page_Template
Fannie Mae and Freddie Mac - $200 billion in preferred stock
"But the eventual cost to the public purse is unknown and potentially huge. The Treasury says it could buy as much as $100 billion of preferred stock in each of the two firms, though it deems that highly unlikely." http://www.bloomberg.com/apps/news?pid=20601109&sid=adr.czwVm3ws&refer=home or http://www.economist.com/finance/displaystory.cfm?story_id=12078933
Financial Securities and Derivatives Bailout - $800 billion (bailout + Tax Incentives)
The tax provisions added more than $100 billion to the cost of the plan. From the original three-page proposal by the Treasury Department, the bill has swelled to 451 pages.
http://www.latimes.com/business/investing/la-fi-bailout2-2008oct02,0,1307485.story
The Housing and Economic Recovery Act of 2008 - $300 billion (Congressional enactment)
(Pub.L. 110-289, 122 Stat. 2654) designed primarily to address the subprime mortgage crisis, was passed by the United States Congress on July 24, 2008
http://www.reuters.com/article/topNews/idUSN3042756820080730
Fed to Provide Up to $540 Billion to Aid Money Funds - added on 10/21/2008 - loans to help relieve pressure on money-market mutual funds beset by redemptions. http://www.bloomberg.com/apps/news?pid=20601103&sid=ajw94.nC0a5w&refer=us
http://dealbook.blogs.nytimes.com/2008/09/29/behind-aigs-crisis-an-overlooked-web-of-risk/ or http://www.nytimes.com/2008/09/28/business/28melt.html?_r=1&ref=business&oref=slogin
Automotive Industry - $25 billion loan guarantee
http://www.search-autoparts.com/searchautoparts/Distribution/House-approves-25-billion-automotive-bailout-loan/ArticleStandard/Article/detail/553690?contextCategoryId=41884
Bear Stearns forced sale to JP Morgan - Chase - $29 billion guarantee
Fed will fund the remaining $29 billion on a non-recourse basis to JPMorgan Chase.
http://www.jpmorgan.com/cm/Satellite?c=JPM_Content_C&cid=1159339104093&pagename=JPM_redesign%2FJPM_Content_C%2FGeneric_Detail_Page_Template
Fannie Mae and Freddie Mac - $200 billion in preferred stock
"But the eventual cost to the public purse is unknown and potentially huge. The Treasury says it could buy as much as $100 billion of preferred stock in each of the two firms, though it deems that highly unlikely." http://www.bloomberg.com/apps/news?pid=20601109&sid=adr.czwVm3ws&refer=home or http://www.economist.com/finance/displaystory.cfm?story_id=12078933
Financial Securities and Derivatives Bailout - $800 billion (bailout + Tax Incentives)
The tax provisions added more than $100 billion to the cost of the plan. From the original three-page proposal by the Treasury Department, the bill has swelled to 451 pages.
http://www.latimes.com/business/investing/la-fi-bailout2-2008oct02,0,1307485.story
The Housing and Economic Recovery Act of 2008 - $300 billion (Congressional enactment)
(Pub.L. 110-289, 122 Stat. 2654) designed primarily to address the subprime mortgage crisis, was passed by the United States Congress on July 24, 2008
http://www.reuters.com/article/topNews/idUSN3042756820080730
Fed to Provide Up to $540 Billion to Aid Money Funds - added on 10/21/2008 - loans to help relieve pressure on money-market mutual funds beset by redemptions. http://www.bloomberg.com/apps/news?pid=20601103&sid=ajw94.nC0a5w&refer=us
Tuesday, September 30, 2008
The Federal Government's Ponzi Scheme
This forum is about local issues, but the current federal government mess is inexorably linked to our local economy. If the average person can't use commerce to their advantage, when we have done nothing wrong, then our standard of living will surely decrease. When this happens, through no fault of our own, then we become thoroughly frustrated by the lack of leadership; especially, when the decision makers have been insulated from the discomfort.
Most people are scared to death with what we are witnessing from our government on the federal level. We have rightfully lost confidence in the so called experts that have gotten us into this mess. Most of us have been in a recession for years, while the government has continually told us that our eyes deceive us.
I really don't think that this $700 billion plan to infuse the credit markets will work. The problem is that personal income levels are not keeping up with debt levels. We cannot, as individuals, afford to keep borrowing money; when we are leveraged to the hilt and our personal income levels aren't rising. That will eventually lead to personal bankruptcy.
Paulson's scheme wreaks of a huge Ponzi scheme. No one is telling us that this will fix the problem. They are telling you that they need this money, but they can't tell you how they arrived at the $700 billion dollar number. My gut feeling is that they feel that $500 billion won't be a drop in the bucket (in their estimation) and $1 trillion isn't saleable. So they came up with this $700 billion figure arbitrarilly.
No one is seeing this the way that I do. This is a gigantic Ponzi scheme. The Feds want to hand over this $700 billion in exchange for what are currently worthless assets. The banks would then supposedly have money to lend out. Well, if people not borrowing money now (at historically low interest rates) is a problem, then injecting money into the system isn't going to facilitate commerce.
As a matter of fact, injecting money into the system is going to stir up inflation, because our dollar is going to continue to fall in value as we create more money supply. If we have more inflation, then interest rates are going to rise, because inflation is a factor in the lending rate. People are going to lose real income, because the money that they earn is going to be worth less. Goods and services are going to become more expensive, because of the growing rate of inflation.
We just can't afford to let our government continue spending money like drunken sailors. At some point in time those bills are going to come due. We have got to cut back on spending. Last year our federal government spent $2.8 trillion, we took in $2.3 trillion in revenue, and that left us with a $500 billion deficit. That in and of itself is ridiculous, and now they want 25% of the budgetary amount, that they corruptly spent, on this scheme. Our real annual deficit will be well above $1 trillion.
If they get this money, it won't be the end. They will be back and they will want more. This debt will continue to grow. Our country already has a $10 trillion national debt. Now they are pushing money out the door like it is monopoly money. We are growing this deficit to the point that it will take generations of reduced standard of living to get it back to a manageable level.
How do we solve this problem? The country is going to have to tighten its belt. The government is going to have to quit borrowing money to grow social programs and discretionary spending. The government is going to have to let the private sector work. We are already spending nearly 10% of our annual national budget toward servicing the national debt. That is money that can't go towards real issues. A good part of that money is leaving our country.
This problem was not caused by a lack of regulation. This problem was caused by fraud. The central focal points of this debacle are Fannie Mae, political corruption, and cronyism. If we are going to arbitrarily enforce laws, then we are not going to solve this problem. We have to bring the people that committed this fraud to justice.
Things are going to be tough for a while no matter what we do. Let's not exacerbate the problem by letting the so-called experts keep us on the same track we have been on. Call your elected officials and tell them what you think. Make them pay at election time. The sooner we start working on real solutions; the sooner we will emerge in a better and wiser world.
How much is $700 Billion
http://wizbangblog.com/content/2008/09/30/understanding-70000000000000.php
Check out the rest of wizbang blog.
http://wizbangblog.com/
Most people are scared to death with what we are witnessing from our government on the federal level. We have rightfully lost confidence in the so called experts that have gotten us into this mess. Most of us have been in a recession for years, while the government has continually told us that our eyes deceive us.
I really don't think that this $700 billion plan to infuse the credit markets will work. The problem is that personal income levels are not keeping up with debt levels. We cannot, as individuals, afford to keep borrowing money; when we are leveraged to the hilt and our personal income levels aren't rising. That will eventually lead to personal bankruptcy.
Paulson's scheme wreaks of a huge Ponzi scheme. No one is telling us that this will fix the problem. They are telling you that they need this money, but they can't tell you how they arrived at the $700 billion dollar number. My gut feeling is that they feel that $500 billion won't be a drop in the bucket (in their estimation) and $1 trillion isn't saleable. So they came up with this $700 billion figure arbitrarilly.
No one is seeing this the way that I do. This is a gigantic Ponzi scheme. The Feds want to hand over this $700 billion in exchange for what are currently worthless assets. The banks would then supposedly have money to lend out. Well, if people not borrowing money now (at historically low interest rates) is a problem, then injecting money into the system isn't going to facilitate commerce.
As a matter of fact, injecting money into the system is going to stir up inflation, because our dollar is going to continue to fall in value as we create more money supply. If we have more inflation, then interest rates are going to rise, because inflation is a factor in the lending rate. People are going to lose real income, because the money that they earn is going to be worth less. Goods and services are going to become more expensive, because of the growing rate of inflation.
We just can't afford to let our government continue spending money like drunken sailors. At some point in time those bills are going to come due. We have got to cut back on spending. Last year our federal government spent $2.8 trillion, we took in $2.3 trillion in revenue, and that left us with a $500 billion deficit. That in and of itself is ridiculous, and now they want 25% of the budgetary amount, that they corruptly spent, on this scheme. Our real annual deficit will be well above $1 trillion.
If they get this money, it won't be the end. They will be back and they will want more. This debt will continue to grow. Our country already has a $10 trillion national debt. Now they are pushing money out the door like it is monopoly money. We are growing this deficit to the point that it will take generations of reduced standard of living to get it back to a manageable level.
How do we solve this problem? The country is going to have to tighten its belt. The government is going to have to quit borrowing money to grow social programs and discretionary spending. The government is going to have to let the private sector work. We are already spending nearly 10% of our annual national budget toward servicing the national debt. That is money that can't go towards real issues. A good part of that money is leaving our country.
This problem was not caused by a lack of regulation. This problem was caused by fraud. The central focal points of this debacle are Fannie Mae, political corruption, and cronyism. If we are going to arbitrarily enforce laws, then we are not going to solve this problem. We have to bring the people that committed this fraud to justice.
Things are going to be tough for a while no matter what we do. Let's not exacerbate the problem by letting the so-called experts keep us on the same track we have been on. Call your elected officials and tell them what you think. Make them pay at election time. The sooner we start working on real solutions; the sooner we will emerge in a better and wiser world.
How much is $700 Billion
http://wizbangblog.com/content/2008/09/30/understanding-70000000000000.php
Check out the rest of wizbang blog.
http://wizbangblog.com/
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