Simon Johnson Explains "What The Banks Did To Us" And Why "Seriously -- Goldman Sachs Can't Fail" - Business Insider - Courtney Comstock | Apr. 11, 2011 - "What's the public loss? Larry Summers said from this podium yesterday that the TARP money would be repaid from banks and that's probably true, but that's not the cost. Is it 8 million jobs lost? Is it a 6% fall in unemployment and we're still 5% down below the peak? Is it the increase in net federal government debt held by the private sector in the United States?
In Financial Crisis, a Dearth of Prosecutions Raises Alarms - New York Times - By GRETCHEN MORGENSON and LOUISE STORY - April 14, 2011 - It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted? ...
As nonprosecutions go, perhaps none is more puzzling to legal experts than the case of Countrywide, the nation’s largest mortgage lender. Last month, the office of the United States attorney for Los Angeles dropped its investigation of Mr. Mozilo after the S.E.C. extracted a settlement from him in a civil fraud case. Mr. Mozilo paid $22.5 million in penalties, without admitting or denying the accusations... Historically, Countrywide’s bank subsidiary was overseen by the comptroller, while the Federal Reserve supervised its home loans unit. But in March 2007, Countrywide switched oversight of both units to the thrift supervisor. That agency was overseen at the time by John M. Reich, a former banker and Senate staff member appointed in 2005 by President George W. Bush... Robert Gnaizda, former general counsel at the Greenlining Institute, a nonprofit consumer organization in Oakland, Calif., said he had spoken often with Mr. Reich about Countrywide’s reckless lending... “We saw that people were getting bad loans,” Mr. Gnaizda recalled. “We focused on Countrywide because they were the largest originator in California and they were the ones with the most exotic mortgages.” ... In a January 2010 memo, Brad Bondi and Martin Biegelman, two assistant directors of the commission, outlined their recommendations for investigative targets and hearings, according to Tom Krebs, another assistant director of the commission. Countrywide and Mr. Mozilo were specifically named; the memo noted that subprime mortgage executives like Mr. Mozilo received hundreds of millions of dollars in compensation even though their companies collapsed... However, the two soon received a startling message: Countrywide was off limits. In a staff meeting, deputies to Phil Angelides, the commission’s chairman, said he had told them Countrywide should not be a target or featured at any hearing, said Mr. Krebs, who said he was briefed on that meeting by Mr. Bondi and Mr. Biegelman shortly after it occurred. His account has been confirmed by two other people with direct knowledge of the situation...
A year later — with precious time lost — several lawmakers decided that the government needed more people tracking financial crimes. Congress passed a bill, providing a $165 million budget increase to the F.B.I. and Justice Department for investigations in this area. But when lawmakers got around to allocating the budget, only about $30 million in new money was provided.
Former JPMorgan Executive Llodra May Face SEC Suit Over 2007 CDO Marketing - Bloomberg - Joshua Gallu and Jody Shenn - Apr 12, 2011 - The SEC has been probing whether JPMorgan, the second biggest U.S. bank by assets, and Steffelin’s former firm, GSC Group, misled investors about hedge-fund Magnetar Capital LLC’s possible role in selecting underlying assets in the $1.1 billion Squared deal, according to a person briefed on the matter who spoke on condition of anonymity because the probe isn’t public... The probe is part of the SEC’s wider investigation of how banks packaged and sold mortgage-linked investments as the housing market unraveled in 2007. The agency has targeted firms at various stages of that process, ranging from loan originators such as Countrywide Financial Corp., to underwriters including Goldman Sachs Group Inc. (GS), which agreed to pay $550 million last year to resolve claims it misled investors in a subprime-linked CDO.
Goldman Traders Tried to Manipulate Derivatives Market in '07, Report Says - Christine Harper and Joshua Gallu - Apr 13, 2011 - Company documents show traders led by Michael J. Swenson sought to encourage a “short squeeze” by putting artificially low prices on derivatives that would gain in value as mortgage securities fell, according to the report yesterday by the Permanent Subcommittee on Investigations. The idea, abandoned after market conditions worsened, was to drive holders of such credit-default swaps to sell and help Goldman Sachs traders buy at reduced prices, according to the report... Goldman Sachs traders abandoned the short-squeeze attempt after discovering on June 7, 2007, that two Bear Stearns Cos. hedge funds that specialized in subprime-mortgage investments were collapsing. Salem e-mailed Swenson and another colleague to suggest trying to buy short positions, known as “protection,” on collateralized debt obligations, or CDOs, from hedge fund Magnetar Capital LLC, according to the subcommittee’s report.
IMF warns US to make a 'down payment' on deficit - Richard Blackden, US Business Editor - Apr 13, 2011 - The US should make a 'down payment' this year on tackling its budget deficit, the International Monetary Fund has warned, as it emerged that the world's biggest bond investor is shorting the country's bonds... "Without attacking entitlements - Medicare, Medicaid and Social Security - we are smelling $1 trillion deficits as far the nose can sniff," Mr Gross (Pacific Investment Management Co (Pimco)) said in the firm's monthly outlook.
More Americans leaving workforce - USA TODAY - By Dennis Cauchon - April 14, 2011 - Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.... The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation's social programs... "What's wrong with the economy may be speeding up trends that are already happening," says Marc Goldwein, policy director of the Committee for a Responsible Federal Budget, a non-partisan group favoring smaller deficits.
Corrupted!: 5 Shocking Examples Of Government Corruption That Will Blow Your Mind - The Economic Collapse Blog - $38.5 Billion In Budget Cuts Is Really Just $352 Million In Deficit Reduction? ... The Federal Reserve Sent Billions In Bailout Aid To Millionaires and Billionaires In The Cayman Islands ... Mitt Romney Declares That He Will Not Be Going After Ben Bernanke Or The Federal Reserve ... Nancy Pelosi Declares That "Elections Shouldn't Matter" ... 6 Year Old Girl Molested By The TSA
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Sunday, April 17, 2011
Friday, April 15, 2011
Economic Secession by Jay Adams
This nation is dealing with issues that are quite remarkable. Our economy has been severely compromised by the policies of the past which have restrained the ability of American labor to compete in the global market place, created debt that simply cannot be repaid within the context of our existing economic capabilities, nurtured an entitlement class that resolves with violent intent to preserve its 'nouveau rights', a fourth estate that has largely abrogated its fundamental responsibility to act as a counter to political mischief and a religion that has targeted our nation as the 'evil' that must be cleansed from the earth.
This represents quite a daunting scenario, but the most insidious and perhaps greatest threat is the loss of control of the Federal Government by the people. Government is spending at a rate that is simply disastrous according to many credible economists, but there appears to be little that can be done in the context of the American political system as it functions today. I am contemplating an abstract method of regaining control. It involves a concept of 'economic secession', that is a departure from the economy that operates exclusively on the US dollar. There is evidence that this is already underway.
As this is written in the spring of 2011 I have observed that Utah has adopted a policy of allowing taxes to be paid in precious metals and North Carolina legislation has been introduced that would create an intrastate currency. This is an indication that some folks are concerned that the US dollar is in peril and rightly so. (This is confused by the fact that people like Robert Reich and Paul Krugman claim that the concern is misplaced and the National Commission on Fiscal Responsibility and Reform appointed by, and ignored by, 0bama; chaired by Erskine Bowles and Alan Simpson say we are in a crisis situation, and in spite of the overwhelming evidence there is still a debate).
In this confused environment it is a daunting thought for a state to set up a credible currency and maintain it in a manner that preserves its integrity. However, the Federal Reserve is in the process of ruining the credibility of the US dollar and against that backdrop, perhaps there is a way of creating an improved means of trade on a local level. First off, I don't see a single state pulling this off, but perhaps a state that is well resourced like Texas might. However, a coalition of states might form under a set of stated principals. This is where things get interesting…..
Our country is deeply divided between Blue States and Red States (Left and Right). There are a small group of 'purple' states like NC that tend to switch back and forth. This proposal would establish criteria for states that wish to participate in a 'Red State Currency', if you don't meet the criteria…you use the US dollar exclusively. The criteria would, in effect, establish a set of principals that are felt to be economically sound. Much like other governing documents this 'Declaration of Economic Principals' would be similarly modified by the participating states. Through this exercise the participants would blend recognized Constitutional governance with a set of Economic Principals that focus attention on the essential activities that create and sustain a sound state in the economic sense. In the context of the 'red state'-'blue state' dynamic, this would be a unilateral action.
Of course the Federal Government would react very vigorously to block such an idea. No doubt the Feds would use all manner of tactics such as withholding all manner of Federal funds. So this plan would have much to overcome and must be developed in such a fashion that the component states are, in effect, more powerful than the Federal Government! Is this possible? Well the 'economic state of the union' is composed of many states like California, Michigan, Illinois, New York and others that are effectively bankrupt. There are other states that are troubled simply by the Federal mandates they must fund. If the relatively healthy states, which tend to be 'red' states, ban together would this coalition not be more economically healthy than the 'whole'?
If states were to follow Utah's lead and recognize precious metals as currency and establish a method of preserving and regulating the use of same, how will the public react to this option? If the public should embrace this "new currency" how will the Federal government react? Since the Federal Reserve is a separate entity, how would it react? How would such a move be regarded in the global economy? I am not an economist but I would think that countries would see this as an attack on the US dollar, although an internal one. This could weaken the dollar in their eyes and might erode its desirability. But how would the global economy view the emerging currency? How would the speculators react? I wonder about these things… and I am seeking illumination… Help me!
This concept might accomplish another needed action. Our country is deeply divided philosophically with regard to the purpose of government. On the Left the Constitution is openly rejected as a governing document (except when it serves their purpose, for example, the ACLU, ACORN, etc.). They use the notion that the Constitution is over 200 years old and is no longer completely relevant to the operation of a contemporary government. It is fairly clear that the Left is moving toward a global government and there is certainly a growing effort to position the US for that merger. I won't enumerate the events that suggest this as fact, but at this juncture the evidence is abundantly clear. This concept is extremely divisive to those on the Right (that are paying attention) and as more evidence emerges it has the potential to polarize the nation in a way that is truly hard to imagine. It appears that the Left is fully aware of this and is attempting to create a circumstance that effectively "springs a trap" rather than allows a decision. This isn't going to work… there are many folks on the Right that see the "light" and are going to shine it everywhere. The Left is pretty clever but they are not nearly as smart as they think (They 'deem' themselves intelligent). The Right must patiently overcome the guile of the Left. This proposition may create a useful counter action to the efforts of the Left…
By actually promoting a form of "economic secession," through the adoption of state by state economic principals, the states that adopt the fundamentals of conservative fiscal policies would strip away many of the entitlement programs required by the Federal Government. By weaning themselves from, or minimizing the use of, the US dollar the states could establish programs that use the "state currency" and theoretically disenfranchise themselves from the US dollar. This is a reversal of the mechanism I observed when my alma mater, The Citadel, was required to accept women because the school had accepted Federal funds. In my proposal, if The Citadel were to (in some form or fashion) operate without US dollars it would regain its autonomy as would all other entities that are under the gun of the Federal government through the poisonous use of its money. Of course this would be a compelling reason to use the "state currency".
Using the premise that this would segregate fiscally conservative states from the more liberal states, over time this would tend to 'move' the more liberally minded folks to the blue states and the more conservatively minded folks to the red states. As this occurs the red states would develop a "cultural fabric" that would be quite different from the blue states. Perhaps this might result in highly developed arts and culture in the blue states and more business development and wealth accumulation in the red states (which would no doubt, lead to more artistic endeavors and cultural development). In my opinion this would "segregate" the states along economic ideology. Segregation is ordinarily considered a bad thing, but in effect this would allow a form of "free market" for each philosophy.
What we have today is a Federal Government that has abrogated its responsibility to maintain a credible currency. There are a variety of arguments with regard to the Federal Reserve's actions and policies. Because of the uncertainty that has resulted in the circumstances of the past decade there have been calls for auditing the Fed or outright elimination of the Fed. Many believe that the US dollar on a trajectory toward collapse in the global marketplace. My proposal offers an alternative method of trade that would originate within the various states but may be extended by reciprocity or other agreement to allow some interstate use of an alternative currency.
This concept would, over time, create a competitive environment where the policies that govern the use of the US dollar would have to compete with the policies of the "state dollars". If the blue states have entitlement programs that require relatively severe redistributive tax and fee structures, the businesses and residents of those states may find a more favorable environment in a 'Red State'. If a person or business sees value in the entitlement programs of a blue state rather than the more Spartan programs of a 'red state,' they would go to the more favorable environment. As you can see this would uncouple the existing mechanisms within the Federal Government that transfer wealth from 'red states' to 'blue states' and, moreover, consolidate the citizens that embrace entitlement policies from folks that rely on and embrace free market policies.
This proposal may appear fanciful, but it is certainly less radical than the outright secession that some contemplate. The Federal Government is out of our control and it seems that our political system is incapable of coping with the economic reality we seem destine to realize. What I have proposed here is not a 'sweeping plan' to restructure the present economic system, it is intended to be an incremental 'movement' that will create economic pressures to clarify policies that are sustainable, and illuminate policies that are not, to identify economic realities with regard to health care, defense, unemployment insurance, minimum wage, building codes, workman's compensation, highway construction and all of the myriad of activities that state and local governments fund with the Federal government as the "rich uncle" that picks up the slack. Rather than continuing the academic debate this proposal creates an environment where these practices can be tested in the real world at the individual state level.
A state may elect to adopt a completely "lean and mean" profile of nearly pure capitalism, while another chooses a package of governmental amenities that provide various levels of support and services, while another may choose a higher level of services. If the state can provide its "package" at a level of efficiency that keeps costs at an appropriate level, that state will enjoy economic success. If a state cannot operate as efficiently it will have to change its practices or reduce its services. Over time the state will achieve "equilibrium" that matches its natural features (coastline, weather, natural resources, available infrastructure, cultural amenities, etc) with the underlying "cost of operation". In effect this would "re-boot" the economy/culture, which is better than outright "destruction & creation".
Of course there would be monumental 'push-back' to such moves and I am surprised that the Feds haven't taken exception to Utah's legislation regarding the use of precious metals. Recently a gentleman in NC was found guilty of (I'm not sure of the charge) manufacturing coins made of gold and silver. The judge even remarked that he was a 'terrorist' for producing these coins. Apparently the fellow gave notice to all of the agencies he could identify that he intended to do this without objection. He then produced something like $7.5 M of these coins and folks began buying them and using them for barter. The Feds have now found him guilty of something and now they want to confiscate the coins!
So, the Federal Reserve is printing money that has no intrinsic value and we use that money for exchanging value. The Feds are reducing the value of those dollars every day they print more of them. A person creates coins that are made of 99.9% pure gold and silver to be used as barter and he is a terrorist….. what is wrong with this picture?
This is intended to pique your imagination…. Whatdayathink?
This represents quite a daunting scenario, but the most insidious and perhaps greatest threat is the loss of control of the Federal Government by the people. Government is spending at a rate that is simply disastrous according to many credible economists, but there appears to be little that can be done in the context of the American political system as it functions today. I am contemplating an abstract method of regaining control. It involves a concept of 'economic secession', that is a departure from the economy that operates exclusively on the US dollar. There is evidence that this is already underway.
As this is written in the spring of 2011 I have observed that Utah has adopted a policy of allowing taxes to be paid in precious metals and North Carolina legislation has been introduced that would create an intrastate currency. This is an indication that some folks are concerned that the US dollar is in peril and rightly so. (This is confused by the fact that people like Robert Reich and Paul Krugman claim that the concern is misplaced and the National Commission on Fiscal Responsibility and Reform appointed by, and ignored by, 0bama; chaired by Erskine Bowles and Alan Simpson say we are in a crisis situation, and in spite of the overwhelming evidence there is still a debate).
In this confused environment it is a daunting thought for a state to set up a credible currency and maintain it in a manner that preserves its integrity. However, the Federal Reserve is in the process of ruining the credibility of the US dollar and against that backdrop, perhaps there is a way of creating an improved means of trade on a local level. First off, I don't see a single state pulling this off, but perhaps a state that is well resourced like Texas might. However, a coalition of states might form under a set of stated principals. This is where things get interesting…..
Our country is deeply divided between Blue States and Red States (Left and Right). There are a small group of 'purple' states like NC that tend to switch back and forth. This proposal would establish criteria for states that wish to participate in a 'Red State Currency', if you don't meet the criteria…you use the US dollar exclusively. The criteria would, in effect, establish a set of principals that are felt to be economically sound. Much like other governing documents this 'Declaration of Economic Principals' would be similarly modified by the participating states. Through this exercise the participants would blend recognized Constitutional governance with a set of Economic Principals that focus attention on the essential activities that create and sustain a sound state in the economic sense. In the context of the 'red state'-'blue state' dynamic, this would be a unilateral action.
Of course the Federal Government would react very vigorously to block such an idea. No doubt the Feds would use all manner of tactics such as withholding all manner of Federal funds. So this plan would have much to overcome and must be developed in such a fashion that the component states are, in effect, more powerful than the Federal Government! Is this possible? Well the 'economic state of the union' is composed of many states like California, Michigan, Illinois, New York and others that are effectively bankrupt. There are other states that are troubled simply by the Federal mandates they must fund. If the relatively healthy states, which tend to be 'red' states, ban together would this coalition not be more economically healthy than the 'whole'?
If states were to follow Utah's lead and recognize precious metals as currency and establish a method of preserving and regulating the use of same, how will the public react to this option? If the public should embrace this "new currency" how will the Federal government react? Since the Federal Reserve is a separate entity, how would it react? How would such a move be regarded in the global economy? I am not an economist but I would think that countries would see this as an attack on the US dollar, although an internal one. This could weaken the dollar in their eyes and might erode its desirability. But how would the global economy view the emerging currency? How would the speculators react? I wonder about these things… and I am seeking illumination… Help me!
This concept might accomplish another needed action. Our country is deeply divided philosophically with regard to the purpose of government. On the Left the Constitution is openly rejected as a governing document (except when it serves their purpose, for example, the ACLU, ACORN, etc.). They use the notion that the Constitution is over 200 years old and is no longer completely relevant to the operation of a contemporary government. It is fairly clear that the Left is moving toward a global government and there is certainly a growing effort to position the US for that merger. I won't enumerate the events that suggest this as fact, but at this juncture the evidence is abundantly clear. This concept is extremely divisive to those on the Right (that are paying attention) and as more evidence emerges it has the potential to polarize the nation in a way that is truly hard to imagine. It appears that the Left is fully aware of this and is attempting to create a circumstance that effectively "springs a trap" rather than allows a decision. This isn't going to work… there are many folks on the Right that see the "light" and are going to shine it everywhere. The Left is pretty clever but they are not nearly as smart as they think (They 'deem' themselves intelligent). The Right must patiently overcome the guile of the Left. This proposition may create a useful counter action to the efforts of the Left…
By actually promoting a form of "economic secession," through the adoption of state by state economic principals, the states that adopt the fundamentals of conservative fiscal policies would strip away many of the entitlement programs required by the Federal Government. By weaning themselves from, or minimizing the use of, the US dollar the states could establish programs that use the "state currency" and theoretically disenfranchise themselves from the US dollar. This is a reversal of the mechanism I observed when my alma mater, The Citadel, was required to accept women because the school had accepted Federal funds. In my proposal, if The Citadel were to (in some form or fashion) operate without US dollars it would regain its autonomy as would all other entities that are under the gun of the Federal government through the poisonous use of its money. Of course this would be a compelling reason to use the "state currency".
Using the premise that this would segregate fiscally conservative states from the more liberal states, over time this would tend to 'move' the more liberally minded folks to the blue states and the more conservatively minded folks to the red states. As this occurs the red states would develop a "cultural fabric" that would be quite different from the blue states. Perhaps this might result in highly developed arts and culture in the blue states and more business development and wealth accumulation in the red states (which would no doubt, lead to more artistic endeavors and cultural development). In my opinion this would "segregate" the states along economic ideology. Segregation is ordinarily considered a bad thing, but in effect this would allow a form of "free market" for each philosophy.
What we have today is a Federal Government that has abrogated its responsibility to maintain a credible currency. There are a variety of arguments with regard to the Federal Reserve's actions and policies. Because of the uncertainty that has resulted in the circumstances of the past decade there have been calls for auditing the Fed or outright elimination of the Fed. Many believe that the US dollar on a trajectory toward collapse in the global marketplace. My proposal offers an alternative method of trade that would originate within the various states but may be extended by reciprocity or other agreement to allow some interstate use of an alternative currency.
This concept would, over time, create a competitive environment where the policies that govern the use of the US dollar would have to compete with the policies of the "state dollars". If the blue states have entitlement programs that require relatively severe redistributive tax and fee structures, the businesses and residents of those states may find a more favorable environment in a 'Red State'. If a person or business sees value in the entitlement programs of a blue state rather than the more Spartan programs of a 'red state,' they would go to the more favorable environment. As you can see this would uncouple the existing mechanisms within the Federal Government that transfer wealth from 'red states' to 'blue states' and, moreover, consolidate the citizens that embrace entitlement policies from folks that rely on and embrace free market policies.
This proposal may appear fanciful, but it is certainly less radical than the outright secession that some contemplate. The Federal Government is out of our control and it seems that our political system is incapable of coping with the economic reality we seem destine to realize. What I have proposed here is not a 'sweeping plan' to restructure the present economic system, it is intended to be an incremental 'movement' that will create economic pressures to clarify policies that are sustainable, and illuminate policies that are not, to identify economic realities with regard to health care, defense, unemployment insurance, minimum wage, building codes, workman's compensation, highway construction and all of the myriad of activities that state and local governments fund with the Federal government as the "rich uncle" that picks up the slack. Rather than continuing the academic debate this proposal creates an environment where these practices can be tested in the real world at the individual state level.
A state may elect to adopt a completely "lean and mean" profile of nearly pure capitalism, while another chooses a package of governmental amenities that provide various levels of support and services, while another may choose a higher level of services. If the state can provide its "package" at a level of efficiency that keeps costs at an appropriate level, that state will enjoy economic success. If a state cannot operate as efficiently it will have to change its practices or reduce its services. Over time the state will achieve "equilibrium" that matches its natural features (coastline, weather, natural resources, available infrastructure, cultural amenities, etc) with the underlying "cost of operation". In effect this would "re-boot" the economy/culture, which is better than outright "destruction & creation".
Of course there would be monumental 'push-back' to such moves and I am surprised that the Feds haven't taken exception to Utah's legislation regarding the use of precious metals. Recently a gentleman in NC was found guilty of (I'm not sure of the charge) manufacturing coins made of gold and silver. The judge even remarked that he was a 'terrorist' for producing these coins. Apparently the fellow gave notice to all of the agencies he could identify that he intended to do this without objection. He then produced something like $7.5 M of these coins and folks began buying them and using them for barter. The Feds have now found him guilty of something and now they want to confiscate the coins!
So, the Federal Reserve is printing money that has no intrinsic value and we use that money for exchanging value. The Feds are reducing the value of those dollars every day they print more of them. A person creates coins that are made of 99.9% pure gold and silver to be used as barter and he is a terrorist….. what is wrong with this picture?
This is intended to pique your imagination…. Whatdayathink?
The Train that hit us in 2008
Shell, I know about the political conspiracy aspect of your outlook, but answer this for me:
If the the money supply times the velocity of money = the price level times the size of the real economy , why did the Federal Reserve not do right thing when credit seized up and quit spending money (ie velocity slowed requiring an increase in the money supply to keep prices from falling or the economy from contracting or both). And if the money supply, BmV=PY (where B is the monetary base, m is the money multiplier, V is velocity, P = price level, Y = real GDP, and PY = nominal GDP) showed that the velocity and money multiplier fell like the proverbial t**d in the well, why come Bernanke ain't the man. Peace HH
Harry,
The money went to the banks. There was a bubble. It began with the 1990s and the internet revolution and then the growth and speculative stocks that bubbled up and burst. There was a lot of pent up demand associated with those stocks and people invested and took a beating in late 2000 when Enron and various other stocks were thought to be cutting edge at that time and were found to be fronts for fraud.
That Tech Bubble along with the 9/11 should have put us into a deep recession, but the Fed decided to create this liquid money paradigm. Banks were allowed to use less and less reserves to make loans. When I was in school we were told that is was imperative under the fractional reserve system that banks hold a 10% reserve on capital deposits. That means you can loan 90% out. That is a 9 to 1 ratio. During the Real Estate Bubble, Banks were keeping around 2% of those reserves and loaning out 40 to 1+.
Then you saw the end of Glass-Steagall and I thought that was good, because in school we were brainwashed that this would be good. But what we failed to realize is that regulations and fiduciary responsibilities would be ignored and manipulated and the banking system would be turned into a rigged casino.
The Derivatives Financial Instruments related to this situation were the Collateralized Debt Obligations and Credit Default Swaps. Those are what took down Bear Stearns and Lehman Brothers. Money and Capital were created by those enterprises and all of the enterprises that were associated with the mortgage bubble. It was trillions of digital dollars of convoluted money that was traded in the markets and it was basically fraudulent, because there is essentially no paper trail, because of how these instuments were divied up and traded multiple times. That is what the fraudclosure and robosigner issue is about, because mortgages are supposed to be secure instruments. Do you understand secure. Don't you hope that your mortgage is secure and that you are paying your mortgage fee to owner of the mortgage and they are properly recording it.
When the housing boom slowed and the more risky borrowers started defaulting, then Bear Stearns had trouble and they were going to have to eat the CDO's and it was hundreds of billions of dollars, but they didn't have that much in assets. Henry Paulson let them go down and it caused a cascading effect, but much of this was hidden by the surging oil futures game going on in 2008. When Bear Stearns went down it started pulling money out of the system, because all of these Financial Institutions have tentacles in one another, they are invested in one another, but this was hidden by the money in the economic system related to petroleum resources and energy, but that wasn't sustainable and people were having a hard time meeting their mortgages, because they overpaid what the market would bear for their houses and they hadn't taken into account the need to have a cushion in case the economy slowed.
The United States has become a consumer based economy. So you saw a further cascading as the economy slowed down, because energy was eating a huge chunk out of individual household budgets. And this money was going to the oil companies and the government and not staying in people's pockets for them to invest as they saw fit. This further slowed down the economy, because people cut down on driving and participating in the marketplace. What did that do to the velocity of money?
So all of these banks and investment houses had been buying oil futures and CDO's and both markets collapsed under their own weight. That pulled money out of the system at a rapid rate. That created negative velocity of capital, because all of these financial institutions were invested heavily in these derivatives. they couldn't loan money out, because they were racing to meet their obligations on all of the derivatives contracts. So the Fed and the Treasury conspire to race in and shore up these banks by essentially paying these obligations with fresh digital money.
Remember TARP was essentially created under the auspices of helping mortgage owners to meet their obligations, but a few days after it was passed, Paulson gave the money to the banks for capitalization. It was so that they could use it as a revolving door on these derivative contracts that they needed to purge from their books, but the problem is that they can't, because there isn't the demand for these toxic assets.
So basically that is what the Ponzi system is for. M3 is the entire amount of all money in the U.S. Dollar system and the FED has created all of this for financial institutions to use at basically 0% interest (which is a negative lending rate due to inflation) for a carry trade and to make profit off of it with the hope that they can eventually make enough profits to cover the toxic assets that they need to purge from their system, but I don't think that is even possible, because in the end these assets are worthless (and continuing to deteriorate) and all they are doing is creating a capitalization bubble and that will eventually pop too. Because when the inflation really kicks in, then interest rates are going to have to rise, causing our nation's debt to spiral. A debt, by the way, that has been exacerbated by all of this digital money. Then after the Ponzi scheme collapses, there will be a deflationary depression the likes of which the United States has never seen.
Currently, these financial institutions are playing in the markets buying tangible assets (food, energy, precious metals), because as you can see they lost their @$$3$ on the convoluted derivatives. This monster is feeding off of itself and it isn't going to stop until the people that perpetuated this are brought to justice and the toxic assets are written off, which is what should have happened to start with. We can do this now or wait until the total economic collapse and by that time the crooks will have left the country and be holed up in some guarded community in the Grand Cayman's, while we deal with the wreckage.
And they definitely need to separate holding companies from financial institutions again, because people need to have a stable, reliable place to put money they need for necessities (mortgage and current living expenses).
Whew!!! Don't make me do that again!
Peace,
JTS
M = money supply, V = velocity of money, P = price level, Y = real GDP Assumptions:
* V is constant
* Money has no effect on real variables (so ΔM has no effect on Y)
* Y is entirely determined by the fixed stock of labor, capital and technology
Note that each side of the equation equals the Nominal GDP (including the inflation)
If the the money supply times the velocity of money = the price level times the size of the real economy , why did the Federal Reserve not do right thing when credit seized up and quit spending money (ie velocity slowed requiring an increase in the money supply to keep prices from falling or the economy from contracting or both). And if the money supply, BmV=PY (where B is the monetary base, m is the money multiplier, V is velocity, P = price level, Y = real GDP, and PY = nominal GDP) showed that the velocity and money multiplier fell like the proverbial t**d in the well, why come Bernanke ain't the man. Peace HH
Harry,
The money went to the banks. There was a bubble. It began with the 1990s and the internet revolution and then the growth and speculative stocks that bubbled up and burst. There was a lot of pent up demand associated with those stocks and people invested and took a beating in late 2000 when Enron and various other stocks were thought to be cutting edge at that time and were found to be fronts for fraud.
That Tech Bubble along with the 9/11 should have put us into a deep recession, but the Fed decided to create this liquid money paradigm. Banks were allowed to use less and less reserves to make loans. When I was in school we were told that is was imperative under the fractional reserve system that banks hold a 10% reserve on capital deposits. That means you can loan 90% out. That is a 9 to 1 ratio. During the Real Estate Bubble, Banks were keeping around 2% of those reserves and loaning out 40 to 1+.
Then you saw the end of Glass-Steagall and I thought that was good, because in school we were brainwashed that this would be good. But what we failed to realize is that regulations and fiduciary responsibilities would be ignored and manipulated and the banking system would be turned into a rigged casino.
The Derivatives Financial Instruments related to this situation were the Collateralized Debt Obligations and Credit Default Swaps. Those are what took down Bear Stearns and Lehman Brothers. Money and Capital were created by those enterprises and all of the enterprises that were associated with the mortgage bubble. It was trillions of digital dollars of convoluted money that was traded in the markets and it was basically fraudulent, because there is essentially no paper trail, because of how these instuments were divied up and traded multiple times. That is what the fraudclosure and robosigner issue is about, because mortgages are supposed to be secure instruments. Do you understand secure. Don't you hope that your mortgage is secure and that you are paying your mortgage fee to owner of the mortgage and they are properly recording it.
When the housing boom slowed and the more risky borrowers started defaulting, then Bear Stearns had trouble and they were going to have to eat the CDO's and it was hundreds of billions of dollars, but they didn't have that much in assets. Henry Paulson let them go down and it caused a cascading effect, but much of this was hidden by the surging oil futures game going on in 2008. When Bear Stearns went down it started pulling money out of the system, because all of these Financial Institutions have tentacles in one another, they are invested in one another, but this was hidden by the money in the economic system related to petroleum resources and energy, but that wasn't sustainable and people were having a hard time meeting their mortgages, because they overpaid what the market would bear for their houses and they hadn't taken into account the need to have a cushion in case the economy slowed.
The United States has become a consumer based economy. So you saw a further cascading as the economy slowed down, because energy was eating a huge chunk out of individual household budgets. And this money was going to the oil companies and the government and not staying in people's pockets for them to invest as they saw fit. This further slowed down the economy, because people cut down on driving and participating in the marketplace. What did that do to the velocity of money?
So all of these banks and investment houses had been buying oil futures and CDO's and both markets collapsed under their own weight. That pulled money out of the system at a rapid rate. That created negative velocity of capital, because all of these financial institutions were invested heavily in these derivatives. they couldn't loan money out, because they were racing to meet their obligations on all of the derivatives contracts. So the Fed and the Treasury conspire to race in and shore up these banks by essentially paying these obligations with fresh digital money.
Remember TARP was essentially created under the auspices of helping mortgage owners to meet their obligations, but a few days after it was passed, Paulson gave the money to the banks for capitalization. It was so that they could use it as a revolving door on these derivative contracts that they needed to purge from their books, but the problem is that they can't, because there isn't the demand for these toxic assets.
So basically that is what the Ponzi system is for. M3 is the entire amount of all money in the U.S. Dollar system and the FED has created all of this for financial institutions to use at basically 0% interest (which is a negative lending rate due to inflation) for a carry trade and to make profit off of it with the hope that they can eventually make enough profits to cover the toxic assets that they need to purge from their system, but I don't think that is even possible, because in the end these assets are worthless (and continuing to deteriorate) and all they are doing is creating a capitalization bubble and that will eventually pop too. Because when the inflation really kicks in, then interest rates are going to have to rise, causing our nation's debt to spiral. A debt, by the way, that has been exacerbated by all of this digital money. Then after the Ponzi scheme collapses, there will be a deflationary depression the likes of which the United States has never seen.
Currently, these financial institutions are playing in the markets buying tangible assets (food, energy, precious metals), because as you can see they lost their @$$3$ on the convoluted derivatives. This monster is feeding off of itself and it isn't going to stop until the people that perpetuated this are brought to justice and the toxic assets are written off, which is what should have happened to start with. We can do this now or wait until the total economic collapse and by that time the crooks will have left the country and be holed up in some guarded community in the Grand Cayman's, while we deal with the wreckage.
And they definitely need to separate holding companies from financial institutions again, because people need to have a stable, reliable place to put money they need for necessities (mortgage and current living expenses).
Whew!!! Don't make me do that again!
Peace,
JTS
Wednesday, April 13, 2011
April Rant - Governance (Link)
I had started the article on governance before the Bobby Lutz article so it is chronologically listed before that article, because I did not cut and paste it into a new form. So that this article is easier for those to find who have come straight to The Hickory Hound, I have listed it in the link that you can click below.
April Rant - Governance
April Rant - Governance
Monday, April 11, 2011
Catawba County's Bobby Lutz helping restore basketball Tradition at NC State
I think in reading this blog that most of you understand that it was no secret that I wanted Hickory's own Rick Barnes to take the challenge of bringing NC State's rich basketball tradition back from the doldrums. Well as most everyone knows, it wasn't meant to be and Coach Barnes decided to stay in Texas. The chances of Coach Barnes ever coming back to our state to coach have finally been extinguished, but I hold no animosity towards him and I wish him the best of luck at the University of Texas, except when his team faces the Wolfpack in the future.
Coach Mark Gottfried decided to accept the challenge of becoming NC State's next basketball coach and it is a feel good story. Coach Gott was a freshman All-American basketball player at Oral Roberts where he met Debbie Yow, NC State's current athletic director and a North Carolina native, who was the women's basketball coach there at that time (She is the sister of NC State legendary women's coach, the late Kay Yow). Due to a coaching transition, Mark Gottfried transferred to Alabama where he led the program to three consecutive Sweet Sixteens as a player in the mid-1980s. Gottfried was an All-Southeastern Conference competitor, but he just didn't make it as a professional.
Coach Gott began his assistant coaching career at UCLA. Everyone understands that UCLA has won the most national basketball titles of any school in the nation and during Gottfried's time as an assistant under Jim Harrick they won their last National Title in 1995, which was their 11th. Coach Gottfried has long stated the importance of the wisdom that he attained from the Legendary John Wooden during his years in Los Angeles. He went on from that National Title team to become the Head Coach at Murray State for three years before joining his Alma mater Alabama.
Gottfried had success at Alabama, but he himself admits to making mistakes during the latter part of his tenure; he was named the Coach of the Year in the SEC in 2002, he led Alabama to five consecutive NCAA tournament appearances (2002-2006), he took the team to an Elite Eight appearance in 2004 (the furthest an University of Alabama Basketball team has ever been in the NCAA Tournament), and he had the team ranked Number 1 in the nation during the 2001-2002 season. Alabama is first and foremost a Football school and basketball has always been an afterthought, but through most of his tenure there Coach Gottfried drew attention to that program. Towards the end that attention became negative; with team goal underachievement, NBA defections, and others walking away. This led to Coach Gottfried's awkward resignation in the middle of the 2008-2009 season.
Coach Gottfried was given a second chance by NC State and he has fully acknowledged that at his introductory Press Conference and in the subsequent articles written in local and national publications. During his press conference he stated that he learned a lot of things from the end of his tenure at Alabama and during his subsequent two years away from college basketball coaching that he spent with ESPN as a color analyst. One of the issues that he addressed was his desire to bring in the best assistant coaching staff in America to help with his weaknesses and strengthen the overall basketball teaching and fundamentals of the players in the program.
One of the hires was made today. It is Bobby Lutz from right here Catawba County. This should be an exciting prospect for the people of our area, especially those from Sherrills Ford, because this gives us a high profile tie-in to a program that is marketed and branded nationally. It may not have the savoir faire that the hiring of Rick Barnes would have brought to the area, but it is something that Catawba County and Bandys High School can definitely hang its hat on.
Bobby Lutz was a very solid coach at the University of North Carolina at Charlotte. He played basketball under the late Bill Bost at Bandy's High School in the mid 1970s, graduating in 1976. At one time Bill Bost was the winningest Boys Basketball Coach in terms of total wins in the State of North Carolina. And Bill Bost not only coached the Boys team into being a powerhouse, he also coached the girls team to the same stature.
Bobby Lutz was named the coach at Pfeiffer College at the age of 28 in 1986. During his nine years there, he won right at two-thirds of his games, made the NAIA tournament every year, and took the school to one NAIA National Championship game. From there he went to coach as an assistant at UNC-Charlotte under Jeff Mullins and Melvin Watkins before becoming the head coach in 1998.
Lutz was the head coach at UNC-Charlotte for 12 years, appearing in 5 NCAA tournaments and 1 NIT in his first seven years. The University also won two Conference USA championships and a Regular Season Championship during that time. In 2005, UNC-Charlotte was forced to move to the Atlantic 10, because so many top quality basketball programs left Conference USA (University of Cincinnati, Depaul University, Marquette University, and Louisville University) and moved to the Big East Conference. The Charlotte program has struggled making the transition and has since only made two National Invitational Tournament appearances in the subsequent years. It is my opinion that UNC-Charlotte should have stayed in the Conference USA or moved to the Colonial Athletic Association where they would have endured much less traveling and had UNC-Wilmington as a natural rival. But because of the struggles, Bobby Lutz took the fall for the programs lack of success.
I just think it is exciting that Bobby Lutz will represent our State and our area as a part of the largest University in the North Carolina system's basketball program. He is someone who has always represented our area well. I think he will be an aggressive recruiter in the North Carolina area and help keep many of these guys home here in the State, whereas Duke and the University of North Carolina at Chapel Hill concentrate on being national entities and looking outside the state for talent first. As the North Carolina State press release states:
Hey, it's only college sports and in the tumultuous times in which we live it isn't life and death; but even if you aren't a Wolfpack supporter, it should be exciting times for the State of North Carolina. The Atlantic Coast Conference isn't what it once was in basketball and this has pretty much coincided with the demise of North Carolina State's program a generation ago. Those of us old enough to remember, truly know what ACC basketball was all about. Today's brand is an emperor who wears no clothes. Duke, Carolina, and the dwarfs has not worked.
It used to be that an ACC with 7 or 8 teams would have five teams in the top twenty in the nation. The last several years it has been hard to fit in two and that is with twelve teams in the conference. It has become hum-drum and television ratings and revenues prove it. My prediction is that the resurrection of NC State's basketball program would go a long way towards the resurrection of the Brand that we all grew up with and cherished in the 1970s and 1980s and the kids today don't really have a clue about. Wouldn't it be something to have ACC basketball back. Wouldn't it be something to have the Big Four mean something again. One can only hope. One can only hope.... A Saga... To Be Continued
Coach Mark Gottfried decided to accept the challenge of becoming NC State's next basketball coach and it is a feel good story. Coach Gott was a freshman All-American basketball player at Oral Roberts where he met Debbie Yow, NC State's current athletic director and a North Carolina native, who was the women's basketball coach there at that time (She is the sister of NC State legendary women's coach, the late Kay Yow). Due to a coaching transition, Mark Gottfried transferred to Alabama where he led the program to three consecutive Sweet Sixteens as a player in the mid-1980s. Gottfried was an All-Southeastern Conference competitor, but he just didn't make it as a professional.
Coach Gott began his assistant coaching career at UCLA. Everyone understands that UCLA has won the most national basketball titles of any school in the nation and during Gottfried's time as an assistant under Jim Harrick they won their last National Title in 1995, which was their 11th. Coach Gottfried has long stated the importance of the wisdom that he attained from the Legendary John Wooden during his years in Los Angeles. He went on from that National Title team to become the Head Coach at Murray State for three years before joining his Alma mater Alabama.
Gottfried had success at Alabama, but he himself admits to making mistakes during the latter part of his tenure; he was named the Coach of the Year in the SEC in 2002, he led Alabama to five consecutive NCAA tournament appearances (2002-2006), he took the team to an Elite Eight appearance in 2004 (the furthest an University of Alabama Basketball team has ever been in the NCAA Tournament), and he had the team ranked Number 1 in the nation during the 2001-2002 season. Alabama is first and foremost a Football school and basketball has always been an afterthought, but through most of his tenure there Coach Gottfried drew attention to that program. Towards the end that attention became negative; with team goal underachievement, NBA defections, and others walking away. This led to Coach Gottfried's awkward resignation in the middle of the 2008-2009 season.
Coach Gottfried was given a second chance by NC State and he has fully acknowledged that at his introductory Press Conference and in the subsequent articles written in local and national publications. During his press conference he stated that he learned a lot of things from the end of his tenure at Alabama and during his subsequent two years away from college basketball coaching that he spent with ESPN as a color analyst. One of the issues that he addressed was his desire to bring in the best assistant coaching staff in America to help with his weaknesses and strengthen the overall basketball teaching and fundamentals of the players in the program.
One of the hires was made today. It is Bobby Lutz from right here Catawba County. This should be an exciting prospect for the people of our area, especially those from Sherrills Ford, because this gives us a high profile tie-in to a program that is marketed and branded nationally. It may not have the savoir faire that the hiring of Rick Barnes would have brought to the area, but it is something that Catawba County and Bandys High School can definitely hang its hat on.
Bobby Lutz was a very solid coach at the University of North Carolina at Charlotte. He played basketball under the late Bill Bost at Bandy's High School in the mid 1970s, graduating in 1976. At one time Bill Bost was the winningest Boys Basketball Coach in terms of total wins in the State of North Carolina. And Bill Bost not only coached the Boys team into being a powerhouse, he also coached the girls team to the same stature.
Bobby Lutz was named the coach at Pfeiffer College at the age of 28 in 1986. During his nine years there, he won right at two-thirds of his games, made the NAIA tournament every year, and took the school to one NAIA National Championship game. From there he went to coach as an assistant at UNC-Charlotte under Jeff Mullins and Melvin Watkins before becoming the head coach in 1998.
Lutz was the head coach at UNC-Charlotte for 12 years, appearing in 5 NCAA tournaments and 1 NIT in his first seven years. The University also won two Conference USA championships and a Regular Season Championship during that time. In 2005, UNC-Charlotte was forced to move to the Atlantic 10, because so many top quality basketball programs left Conference USA (University of Cincinnati, Depaul University, Marquette University, and Louisville University) and moved to the Big East Conference. The Charlotte program has struggled making the transition and has since only made two National Invitational Tournament appearances in the subsequent years. It is my opinion that UNC-Charlotte should have stayed in the Conference USA or moved to the Colonial Athletic Association where they would have endured much less traveling and had UNC-Wilmington as a natural rival. But because of the struggles, Bobby Lutz took the fall for the programs lack of success.
I just think it is exciting that Bobby Lutz will represent our State and our area as a part of the largest University in the North Carolina system's basketball program. He is someone who has always represented our area well. I think he will be an aggressive recruiter in the North Carolina area and help keep many of these guys home here in the State, whereas Duke and the University of North Carolina at Chapel Hill concentrate on being national entities and looking outside the state for talent first. As the North Carolina State press release states:
A native of Catawba, N.C., Lutz led Charlotte to a school-record five 20-win seasons, averaged over 18 wins a year and won three league titles (1999, 2001, 2004) in his tenure with the 49ers. He had four top-20 national recruiting classes and tutored 10 players who earned first-team all-conference honors. Five times in his career a Lutz-coached 49er squad knocked off a top-10 opponent, including a win over No. 3 Cincinnati in 1999. Five of the eight wins over top-10-ranked opponents in Charlotte’s history came under Lutz's watch. In 2005, Lutz was a finalist for the Jim Phelan National Coach of the Year Award.It will give me extra pleasure seeing someone from the area work diligently to bring North Carolina State's basketball program back to prominence. These kinds of connections and stories are important to our area or any area. Success breeds success. Coach Gottfried and Coach Lutz are already working hard in Raleigh and building a rapport with the locals, before long they will be appearing here in Catawba County and the surrounding area to meet and greet the Wolfpack faithful.
Hey, it's only college sports and in the tumultuous times in which we live it isn't life and death; but even if you aren't a Wolfpack supporter, it should be exciting times for the State of North Carolina. The Atlantic Coast Conference isn't what it once was in basketball and this has pretty much coincided with the demise of North Carolina State's program a generation ago. Those of us old enough to remember, truly know what ACC basketball was all about. Today's brand is an emperor who wears no clothes. Duke, Carolina, and the dwarfs has not worked.
It used to be that an ACC with 7 or 8 teams would have five teams in the top twenty in the nation. The last several years it has been hard to fit in two and that is with twelve teams in the conference. It has become hum-drum and television ratings and revenues prove it. My prediction is that the resurrection of NC State's basketball program would go a long way towards the resurrection of the Brand that we all grew up with and cherished in the 1970s and 1980s and the kids today don't really have a clue about. Wouldn't it be something to have ACC basketball back. Wouldn't it be something to have the Big Four mean something again. One can only hope. One can only hope.... A Saga... To Be Continued
April Rant - Governance
I remember about a year and a half ago sitting in a meeting of some very cutting edge people that live in Hickory and Catawba County and having a discussion about how we go about changing the mindset of the people who live in the area. The discussion turned in the direction of Horse Race politics and how you go about making changes related to changing officials in elected office and how the same people hold their positions for lengthy periods of time and how those people hold no accountability because empirical evidence shows that no matter what they do or how we continue in an economic and social malaise in this area that these people will be reelected anyway, because they will always have someone else to blame and there are very few people who have the intestinal fortitude to hold their feet to the fire.
After listening to the people talk in circles about this subject, I had to interject that it isn't about the Horse Race, because what these people were saying was obvious and frankly it is time to move on from constantly bemoaning the obvious. It just isn't constructive to keep preaching to the choir. The message has to be taken to the people who are clueless as to the way our governance works in this area.
Evidence has proven that Mayors in Hickory stay in office for a generation. We have a Mayoral position that has a four year election cycle and in the last 52 years we have had 4 mayors and only one served a single 4 year term. Julian Whitener was in office from 1959 to 1977, George Murphy served the single term from 1977 to 1981, Bill McDonald was in office from 1981 to 2001, and Mayor Wright has been in office from 2001 to present. Compare that to the United States Presidency where there have been 10 office holders during that same subsequent time period.
What I pointed to that day was that the Horse Race is fine and dandy, but in the end it is about governance. We have people that get so entrenched in political ideology related to the Horse Race that they just walk away from the situation once the election is over only to come back when the subsequent terms are up to the wash and rinse repeat cycle. What about what goes on between the four year terms and the decisions that are made and the consequential implications of the decisions that have been made?
I am not only speaking about Hickory's Mayoral race. Too be fair, the same goes on in every local decision making race that is held from City Council to County Commission to State House and State Senate and that doesn't only go for Hickory. It also goes for all of the Metropolitan area of Hickory-Lenoir-Morganton. I don't believe in Trickle Down Economics and I don't believe in Trickle Down Governance. The most important decisions that are made that effect this area are made right here by our local officials either by action or inaction.
Elected officials will play it off and blame everyone else, but they are who we elect to hold office. They have no right to abrogate their authority to any part of the bureaucracy, whether that be government or quasi-government agencies. They are the people who hire the local City and County Managers and they empower all forms of decision making bodies. This is supposed to be done for the sake of public interests, but all too often we see it done for personal self interest and for their associates without taking into account the effects that it will have on the big picture. They have no right to cry about Raleigh and Washington, when the State and Federal Government sends them millions of dollars in grants and usually lets them decide how to spend such monies or they are allowed to request and apply for such grants of their choosing to be directed towards interests of their choosing.
The bottom line is that our local officials are responsible and accountable for the decisions that they make. But, it is the responsibility of the citizenry to keep up with what is going on in their local government and hold their elected officials accountable. This is not done by less than 10% of the people showing up for a local election. This is not done by not following the decision making process of local government officials. This is not done by not participating in the processes of governance. This is not done by only complaining when something directly effects you and walking away when it's your neighbors issue that has taken the stage. We are all supposed to be looking out for the welfare of the entire community. If we are only going to look out for our own interests, then why even have a City Charter?
To be successful we need to grow the pie. We need a local economy that is growing. In order to do that we have to be in this thing together, but it seems way too many people are out for themselves and their own short term interests. Mayor Wright has constantly stated that our local decision making body, "the Hickory City Council" is non-partisan. As I have stated in the past, nothing could be further from the truth. If someone is thinking in regular pop culture Democrat or Republican terms, then they are only fooling themselves with such a simple context. What we have in our area is the Downtown Development Association Party and the Northwest Hickory Party and everyone who does not conform to those interests is getting routed. I mean they are getting their A Double Esses handed to them. Those interests are not non-partisan. Check out the agendas of the Hickory City Council and see what they relate to. See what the issues on the agenda are directed towards. And maybe you just might get my point.
I constantly hear people from the Republican Party who espouse the notion of competition. That is one of the reasons why I can claim to be a real Republican and most of the people around here are one dimensional thinkers playing charades. All they can talk about is low taxes and small government. They want "My Taxes" to be low, but they also want goodies sprinkled all over them by the government. They don't care about other people's taxes or the common interest services that should be provided by a viable community that will help a community prosper.
You might say that I am not for competition, because I don't support Free Trade. I disagree, I don't support the Laissez Faire, "Free for All," Battle Royale trade policies that are currently going on that have scarred the American Industrial System. These policies are devastating the middle class and thus that is what is hurting our local area. The question is what are our local officials doing to help the working class people in the area? It seems that their policies are always geared towards the upper class. What about the tens of thousands of people in our area that have been adversely effected by what has been going on for the last decade?
I believe in fairness and each side playing by the same rules of justice. This does not mean that there will be equal outcomes and I do not believe in forced outcomes, but I do believe in equal opportunity, because I believe this allows the best ideas and the best entrepreneurs and the best leaders to rise to the top. It isn't all about investing capital and physical money into the middle class. It is about investing time, energy, and ideas into helping the interests of the majority of the people in our region, instead of focusing everything towards the same old stale ideas fostered by the closed circuit club that runs in the same circles and is not open to new ideas and the realization that we can't tweak around the edges to change the negative economic momentum of our area.
The people at the top of Hickory's Food Chain may like it here, because of their status. They may not want the area to change. They may not want to invite people here that have different ideas than their own, because they are afraid that it will change what they have deemed Hickory is supposed to be; but I guarantee that these people are anxious, because they see the economic writing on the wall. They know the economy isn't good and this isn't a normal downturn of the business cycle, but they are stuck in a paradox of wanting to control Hickory towards their own will by trying to firm their grip and steady their position, while at the same time they continue to see the local economy become more and more irrelevant in this 21st century world. They are in denial about the fact that what Hickory was is not going to come back and making a transition towards a new future is not some sort of fantasy, it is imperative for the viability of the community.
Maybe certain people don't care if the population implodes. Maybe certain people want a downsized Hickory. Who does this benefit? Do you want to participate in such a process? Do you understand the implications this will have on your personal finances and the quality of your life? Do you know what this will mean to your property value? Don't you want to know what the vision of our leaders is? Don't you care about the direction in which we are headed? Don't you want to be in the loop on this decision making? It doesn't worry you? You don't care what relevance this has to you and your family? Are you giving up? Is this some sort of long term slow suicide pact that I don't know about?
Put down the Chicken Wings dripping in Ranch, push back the Pabst Blue Ribbon, push the off button on the Remote to the Boob Tube, lower the lever to the foot stool of the La-Z-Boy, and start getting involved in your lives; because if you don't, then you aren't going to be able to afford all of those poor man luxuries. Our Forefathers busted their butts so that our lives could be easier and we are headed to the point where we are going to have to start over from scratch, all because people didn't care to play a role in their own lives and their own destiny. People may not like what I am saying or what I am doing. Well to that I say it is time for YOU to SAY SOMETHING and DO SOMETHING!!!
After listening to the people talk in circles about this subject, I had to interject that it isn't about the Horse Race, because what these people were saying was obvious and frankly it is time to move on from constantly bemoaning the obvious. It just isn't constructive to keep preaching to the choir. The message has to be taken to the people who are clueless as to the way our governance works in this area.
Evidence has proven that Mayors in Hickory stay in office for a generation. We have a Mayoral position that has a four year election cycle and in the last 52 years we have had 4 mayors and only one served a single 4 year term. Julian Whitener was in office from 1959 to 1977, George Murphy served the single term from 1977 to 1981, Bill McDonald was in office from 1981 to 2001, and Mayor Wright has been in office from 2001 to present. Compare that to the United States Presidency where there have been 10 office holders during that same subsequent time period.
What I pointed to that day was that the Horse Race is fine and dandy, but in the end it is about governance. We have people that get so entrenched in political ideology related to the Horse Race that they just walk away from the situation once the election is over only to come back when the subsequent terms are up to the wash and rinse repeat cycle. What about what goes on between the four year terms and the decisions that are made and the consequential implications of the decisions that have been made?
I am not only speaking about Hickory's Mayoral race. Too be fair, the same goes on in every local decision making race that is held from City Council to County Commission to State House and State Senate and that doesn't only go for Hickory. It also goes for all of the Metropolitan area of Hickory-Lenoir-Morganton. I don't believe in Trickle Down Economics and I don't believe in Trickle Down Governance. The most important decisions that are made that effect this area are made right here by our local officials either by action or inaction.
Elected officials will play it off and blame everyone else, but they are who we elect to hold office. They have no right to abrogate their authority to any part of the bureaucracy, whether that be government or quasi-government agencies. They are the people who hire the local City and County Managers and they empower all forms of decision making bodies. This is supposed to be done for the sake of public interests, but all too often we see it done for personal self interest and for their associates without taking into account the effects that it will have on the big picture. They have no right to cry about Raleigh and Washington, when the State and Federal Government sends them millions of dollars in grants and usually lets them decide how to spend such monies or they are allowed to request and apply for such grants of their choosing to be directed towards interests of their choosing.
The bottom line is that our local officials are responsible and accountable for the decisions that they make. But, it is the responsibility of the citizenry to keep up with what is going on in their local government and hold their elected officials accountable. This is not done by less than 10% of the people showing up for a local election. This is not done by not following the decision making process of local government officials. This is not done by not participating in the processes of governance. This is not done by only complaining when something directly effects you and walking away when it's your neighbors issue that has taken the stage. We are all supposed to be looking out for the welfare of the entire community. If we are only going to look out for our own interests, then why even have a City Charter?
To be successful we need to grow the pie. We need a local economy that is growing. In order to do that we have to be in this thing together, but it seems way too many people are out for themselves and their own short term interests. Mayor Wright has constantly stated that our local decision making body, "the Hickory City Council" is non-partisan. As I have stated in the past, nothing could be further from the truth. If someone is thinking in regular pop culture Democrat or Republican terms, then they are only fooling themselves with such a simple context. What we have in our area is the Downtown Development Association Party and the Northwest Hickory Party and everyone who does not conform to those interests is getting routed. I mean they are getting their A Double Esses handed to them. Those interests are not non-partisan. Check out the agendas of the Hickory City Council and see what they relate to. See what the issues on the agenda are directed towards. And maybe you just might get my point.
I constantly hear people from the Republican Party who espouse the notion of competition. That is one of the reasons why I can claim to be a real Republican and most of the people around here are one dimensional thinkers playing charades. All they can talk about is low taxes and small government. They want "My Taxes" to be low, but they also want goodies sprinkled all over them by the government. They don't care about other people's taxes or the common interest services that should be provided by a viable community that will help a community prosper.
You might say that I am not for competition, because I don't support Free Trade. I disagree, I don't support the Laissez Faire, "Free for All," Battle Royale trade policies that are currently going on that have scarred the American Industrial System. These policies are devastating the middle class and thus that is what is hurting our local area. The question is what are our local officials doing to help the working class people in the area? It seems that their policies are always geared towards the upper class. What about the tens of thousands of people in our area that have been adversely effected by what has been going on for the last decade?
I believe in fairness and each side playing by the same rules of justice. This does not mean that there will be equal outcomes and I do not believe in forced outcomes, but I do believe in equal opportunity, because I believe this allows the best ideas and the best entrepreneurs and the best leaders to rise to the top. It isn't all about investing capital and physical money into the middle class. It is about investing time, energy, and ideas into helping the interests of the majority of the people in our region, instead of focusing everything towards the same old stale ideas fostered by the closed circuit club that runs in the same circles and is not open to new ideas and the realization that we can't tweak around the edges to change the negative economic momentum of our area.
The people at the top of Hickory's Food Chain may like it here, because of their status. They may not want the area to change. They may not want to invite people here that have different ideas than their own, because they are afraid that it will change what they have deemed Hickory is supposed to be; but I guarantee that these people are anxious, because they see the economic writing on the wall. They know the economy isn't good and this isn't a normal downturn of the business cycle, but they are stuck in a paradox of wanting to control Hickory towards their own will by trying to firm their grip and steady their position, while at the same time they continue to see the local economy become more and more irrelevant in this 21st century world. They are in denial about the fact that what Hickory was is not going to come back and making a transition towards a new future is not some sort of fantasy, it is imperative for the viability of the community.
Maybe certain people don't care if the population implodes. Maybe certain people want a downsized Hickory. Who does this benefit? Do you want to participate in such a process? Do you understand the implications this will have on your personal finances and the quality of your life? Do you know what this will mean to your property value? Don't you want to know what the vision of our leaders is? Don't you care about the direction in which we are headed? Don't you want to be in the loop on this decision making? It doesn't worry you? You don't care what relevance this has to you and your family? Are you giving up? Is this some sort of long term slow suicide pact that I don't know about?
Put down the Chicken Wings dripping in Ranch, push back the Pabst Blue Ribbon, push the off button on the Remote to the Boob Tube, lower the lever to the foot stool of the La-Z-Boy, and start getting involved in your lives; because if you don't, then you aren't going to be able to afford all of those poor man luxuries. Our Forefathers busted their butts so that our lives could be easier and we are headed to the point where we are going to have to start over from scratch, all because people didn't care to play a role in their own lives and their own destiny. People may not like what I am saying or what I am doing. Well to that I say it is time for YOU to SAY SOMETHING and DO SOMETHING!!!
Sunday, April 10, 2011
Economic Stories of Relevance in Today's World -- April 10, 2011
The following is a link to high resolution photos of the Fukushima Daiichi Nuclear Plant taken by an aerial drone on March 20, 2011 - http://cryptome.org/eyeball/daiichi-npp/daiichi-photos.htm - You can even download a zip file that will allow you to enlarge the pictures in much greater detail.
Ron Paul to probe US Mint Coin shortage - Kitco - By Daniela Cambone - April 2, 2011 - Paul wants competition in currencies, and to do so, he said the tax on coins needs to be done away with. “Money shouldn’t be taxed with sales taxes or capital gains taxes, that would be my goal,” he said.... In March, Paul introduced H.R. 1098, the Free Competition in Currency Act of 2011, which would repeal legal tender laws in order to prohibit taxation on gold, silver, platinum, palladium and rhodium bullion. The bill has been referred to the House Committees on Financial Services, Ways and Means, and Judiciary.... A staunch critic of the Federal Reserve, Paul said that instead of arguing his case for the Fed to close down tomorrow, he’s arguing the fact it should not hold a monopoly. “They have a monopoly on a type of money that isn’t even constitutional,” he said.... “We would use no force, nobody has to use gold and silver coins,” said Paul. Rather, he said the Fed does use force. “They are a cartel and they make us use Federal Reserve notes,” he said.
Foreclosure crisis: Fed-up judges crack down on disorder in the courts - Palm Beach Post - By Christine Stapleton and Kimberly Miller - April 4, 2011 - Angry and exasperated by faulty foreclosure documents, judges throughout Florida are hitting back by increasingly dismissing cases and boldly accusing lawyers of "fraud upon the court."... "This case should have never been filed," said Lando, who referred to the firm's work on the case as "shoddy" and "grossly incompetent." She called Ben-Ezra a "robot" who filed whatever the banks sent him, and held him in contempt of court. She then gave the homeowner the home - free and clear - and barred the lender from refiling the foreclosure.... Ongoing scrutiny by the FBI, the Florida attorney general, the Florida Bar, the media and defense attorneys has uncovered countless examples of forged signatures, post-dated documents, robo-signing and lost paperwork.... The combined impact will clearly be to change practices and to reduce the amount of corner-cutting the banks and their lawyers are engaged in," White said. "It could mean foreclosures get slower. It could also encourage banks to pursue alternatives to foreclosure."
March Madness: U.S. Gov't Spent More Than Eight Times Its Monthly Revenue - CNSnews.com - By Terence P. Jeffrey - April 4, 2011 - During the month, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds (including $62.011 to individuals and $3.887 to businesses) thus netting $128.179 billion in tax revenue for March. At the same time, the Treasury paid out a total of $1.1187 trillion. When the $65.898 billion in tax refunds is deducted from that, the Treasury paid a net of $1.0528 trillion in federal expenses for March. That $1.0528 trillion in spending for March equaled 8.2 times the $128.179 in net federal tax revenue for the month.
The federal government’s cash-flow situation was summed up pungently in Senate Budget Committee testimony by Erskine Bowles, who served as chief of staff to President Bill Clinton and is now the co-chair of President Barack Obama’s National Commission on Fiscal Responsibility... “I'm really concerned,” Bowles told the committee last month. “I think we face the most predictable economic crisis in history. A lot of us sitting in this room didn't see this last crisis as it came upon us. But this one is really easy to see. The fiscal path we are on today is simply not sustainable.
U.S. Corn Supply Shrinking as Meat, Ethanol Demand Send Crop Price Higher - Whitney McFerron and Jeff Wilson - Apr 7, 2011 - Corn stockpiles in the U.S., the world’s largest grower, are plunging to a 15-year low and may be smaller than the government forecast last month as rising demand from makers of feed and ethanol drive prices higher... About 40 percent of the crop is used to make ethanol as the government subsidizes the fuel additive and retail gasoline nears $4 a gallon. Corn futures have more than doubled in the past year to the highest since July 2008, as rising pork and beef prices encouraged demand from livestock producers and as U.S. export-sales expanded at the fastest pace in three years.
Is America Becoming The Land Of The Part-Time Job?: Most Of The Jobs That Are Being Created Are Part-Time Jobs And Some Companies Are Going To A “Part-Time Only Policy” - Before It's News - Thursday, April 07, 2011 - But isn't the employment situation supposed to be getting better? No, it really is not. Yes, the U.S. economy added 216,000 jobs in March. However, the truth is that approximately 290,000 part-time jobs were created and about 80,000 full-time jobs were actually lost. This is all part of a long-term trend in America. Good jobs are rapidly disappearing and they are being replaced by low paying service jobs that do not pay a living wage. In many American households today, both parents have multiple jobs. Yet a large percentage of those same households can't even pay the mortgage and are drowning in debt.
Tax the Super Rich now or face a revolution - Market Watch - Paul B. Farrell - March 29, 2011 - Here’s how one savvy insider who knows described this Super-Rich Delusion: “The top 1% live privileged lives, aren’t worried about much. Families vacation at the best resorts. Their big concerns are finding the best Pilates teacher, best masseuse, best surgeons, best private schools. They aren’t concerned with the underlying deterioration of America or the world, except in the abstract, because they aren’t directly affected by it. That’s not to say they aren’t sympathetic, aware, or don’t talk about the issues you bring up. They are largely concerned with protecting and enhancing their socio-economic positions, ensuring their families live well. And nothing you write about will change things.”... Warning, in 2011 that attitude is delusional, deadly, yet pervasive in America... They believe they’ll continue living just fine in a depression. But you won’t. Nor will your retirement. Neither will the rest of America. And still the Super Rich don’t care, “except in the abstract, because they aren’t directly affected.”
Gerald Celente on the beginning of the First Great War of the 21st Century
Ron Paul to probe US Mint Coin shortage - Kitco - By Daniela Cambone - April 2, 2011 - Paul wants competition in currencies, and to do so, he said the tax on coins needs to be done away with. “Money shouldn’t be taxed with sales taxes or capital gains taxes, that would be my goal,” he said.... In March, Paul introduced H.R. 1098, the Free Competition in Currency Act of 2011, which would repeal legal tender laws in order to prohibit taxation on gold, silver, platinum, palladium and rhodium bullion. The bill has been referred to the House Committees on Financial Services, Ways and Means, and Judiciary.... A staunch critic of the Federal Reserve, Paul said that instead of arguing his case for the Fed to close down tomorrow, he’s arguing the fact it should not hold a monopoly. “They have a monopoly on a type of money that isn’t even constitutional,” he said.... “We would use no force, nobody has to use gold and silver coins,” said Paul. Rather, he said the Fed does use force. “They are a cartel and they make us use Federal Reserve notes,” he said.
Foreclosure crisis: Fed-up judges crack down on disorder in the courts - Palm Beach Post - By Christine Stapleton and Kimberly Miller - April 4, 2011 - Angry and exasperated by faulty foreclosure documents, judges throughout Florida are hitting back by increasingly dismissing cases and boldly accusing lawyers of "fraud upon the court."... "This case should have never been filed," said Lando, who referred to the firm's work on the case as "shoddy" and "grossly incompetent." She called Ben-Ezra a "robot" who filed whatever the banks sent him, and held him in contempt of court. She then gave the homeowner the home - free and clear - and barred the lender from refiling the foreclosure.... Ongoing scrutiny by the FBI, the Florida attorney general, the Florida Bar, the media and defense attorneys has uncovered countless examples of forged signatures, post-dated documents, robo-signing and lost paperwork.... The combined impact will clearly be to change practices and to reduce the amount of corner-cutting the banks and their lawyers are engaged in," White said. "It could mean foreclosures get slower. It could also encourage banks to pursue alternatives to foreclosure."
March Madness: U.S. Gov't Spent More Than Eight Times Its Monthly Revenue - CNSnews.com - By Terence P. Jeffrey - April 4, 2011 - During the month, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds (including $62.011 to individuals and $3.887 to businesses) thus netting $128.179 billion in tax revenue for March. At the same time, the Treasury paid out a total of $1.1187 trillion. When the $65.898 billion in tax refunds is deducted from that, the Treasury paid a net of $1.0528 trillion in federal expenses for March. That $1.0528 trillion in spending for March equaled 8.2 times the $128.179 in net federal tax revenue for the month.
The federal government’s cash-flow situation was summed up pungently in Senate Budget Committee testimony by Erskine Bowles, who served as chief of staff to President Bill Clinton and is now the co-chair of President Barack Obama’s National Commission on Fiscal Responsibility... “I'm really concerned,” Bowles told the committee last month. “I think we face the most predictable economic crisis in history. A lot of us sitting in this room didn't see this last crisis as it came upon us. But this one is really easy to see. The fiscal path we are on today is simply not sustainable.
U.S. Corn Supply Shrinking as Meat, Ethanol Demand Send Crop Price Higher - Whitney McFerron and Jeff Wilson - Apr 7, 2011 - Corn stockpiles in the U.S., the world’s largest grower, are plunging to a 15-year low and may be smaller than the government forecast last month as rising demand from makers of feed and ethanol drive prices higher... About 40 percent of the crop is used to make ethanol as the government subsidizes the fuel additive and retail gasoline nears $4 a gallon. Corn futures have more than doubled in the past year to the highest since July 2008, as rising pork and beef prices encouraged demand from livestock producers and as U.S. export-sales expanded at the fastest pace in three years.
Is America Becoming The Land Of The Part-Time Job?: Most Of The Jobs That Are Being Created Are Part-Time Jobs And Some Companies Are Going To A “Part-Time Only Policy” - Before It's News - Thursday, April 07, 2011 - But isn't the employment situation supposed to be getting better? No, it really is not. Yes, the U.S. economy added 216,000 jobs in March. However, the truth is that approximately 290,000 part-time jobs were created and about 80,000 full-time jobs were actually lost. This is all part of a long-term trend in America. Good jobs are rapidly disappearing and they are being replaced by low paying service jobs that do not pay a living wage. In many American households today, both parents have multiple jobs. Yet a large percentage of those same households can't even pay the mortgage and are drowning in debt.
Tax the Super Rich now or face a revolution - Market Watch - Paul B. Farrell - March 29, 2011 - Here’s how one savvy insider who knows described this Super-Rich Delusion: “The top 1% live privileged lives, aren’t worried about much. Families vacation at the best resorts. Their big concerns are finding the best Pilates teacher, best masseuse, best surgeons, best private schools. They aren’t concerned with the underlying deterioration of America or the world, except in the abstract, because they aren’t directly affected by it. That’s not to say they aren’t sympathetic, aware, or don’t talk about the issues you bring up. They are largely concerned with protecting and enhancing their socio-economic positions, ensuring their families live well. And nothing you write about will change things.”... Warning, in 2011 that attitude is delusional, deadly, yet pervasive in America... They believe they’ll continue living just fine in a depression. But you won’t. Nor will your retirement. Neither will the rest of America. And still the Super Rich don’t care, “except in the abstract, because they aren’t directly affected.”
Gerald Celente on the beginning of the First Great War of the 21st Century
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