Parisian Family Office, CEO. Began Wall Street, 1982. Founded investment firm, CHIPPEWA PARTNERS, Native American Advisors. Active Trader. White Earth Chippewa Tribal member. Was NYSE/FINRA arb. Conservative, raised on Great Plains reservations. Pureblood, clot-shot free. In a world elevated on a dopamine binge, this is his take! Written from MT Ghost Ranch on the Yellowstone River, TN farm Pamelot or San Jose del Cabo, Mexico, CASA TULE'. Always been, will always be, an optimist.
Monday, February 28, 2011
Here is Jimmy Rogers today on ZEROHEDGE.com, the finest financial website on the planet.
Jim Rogers joins Zero Hedge in being highly skeptical about just how credible Saudi's call for a 1MM + boost in its oil supply is: "Saudi Arabia has been lying about the reserves for decades. Saudi Arabia the last two times said they are going to increase production and they couldn't increase production. Don't fall for that. The reason oil is going up is the world is running out of known reserves of oil." Of course, then there is the question of do we trust the Quantum fund creator who retired at 37, or do we go with the sellside lemming brigade of monkeys with typewriters who will groupthink anything and everything to death, just to get paid another completely unwarranted bonus. As to those who are concerned that the commodity "bubble" is about to pop, Rogers says: "It's still years away." And some reinforcement for the gold and silver bulls: "Gold will certainly go over $2,000 by the end of the decade, and silver will pass $50."
Thursday, February 24, 2011
Wednesday, February 23, 2011
- Feb 22, 2011
Our country is bankrupt. It’s not bankrupt in 30 years or five years. It’s bankrupt today.
Want proof? Look at President Barack Obama’s 2010 budget. It showed a massive fiscal gap over the next 75 years, the closure of which requires immediate tax increases, spending cuts, or some combination totaling 8 percent of gross domestic product. To put 8 percent of GDP in perspective, this year’s employee and employer payroll taxes for Social Security and Medicare will amount to just 5 percent of GDP.
Actually, the picture is much worse. Nothing in economics says we should look out just 75 years when considering the present-value difference between future spending and future taxes. Over the full long-term, we need an extra 12 percent, not 8 percent, of GDP annually.
Seventy-five years seems like a long enough time to plan. It’s not. Had the Greenspan Commission, which “fixed” Social Security back in 1983, focused on the true long term we wouldn’t be sitting here now with Social Security 26 percent underfunded. The Social Security trustees, at least, have learned a lesson. The 26 percent figure is based on their infinite horizon fiscal- gap calculation.
But the real reason we can’t look out just 75 years is that the government’s cash flows (the difference between its annual taxes and non-interest spending) over any period of time, including the next 75 years, aren’t well defined. This reflects economics’ labeling problem. If you use different words to describe the receipts taken in and paid out each year by the government, you produce entirely different cash flows and an entirely different fiscal gap measured over any finite horizon.
Matter of Language
It’s only the value of the infinite horizon fiscal gap that is unaffected by the choice of labels of language. Take this year’s payroll tax contributions. Let’s call these transfers from workers to Uncle Sam “borrowing” by the government, rather than “payroll taxes,” since the money will be paid back as future benefits. If the future payback isn’t in full (equal to principal plus interest), we can call the difference a “retirement tax.” Presto! With this change of words, our 2011 deficit of about 10 percent of GDP is boosted another five points to 15 percent.
With one set of words, taxes are higher now and lower later. With the other set of words, the opposite is true. But neither set of labels makes more economic sense than the other or changes what the government takes, on balance, from any person or business in any given year.
This is no surprise. The math of economics rules out an absolute measure of the deficit, just like the math of physics rules out an absolute measure of time.
The bottom line, then, is that we need to look at the infinite-horizon fiscal gap not just for Social Security, but for the entire federal government. That analysis, based on the Congressional Budget Office’s long-term alternative fiscal scenario, shows an unfathomable fiscal gap of $202 trillion. And covering this gap requires coming up with the aforementioned 12 percent of GDP, forever.
If this gives you the willies, there’s a ready narcotic -- the president’s 2012 budget, which shows that most of our long- term fiscal problem has miraculously disappeared; the fiscal gap isn’t 12 percent of annual GDP. Nor is it 8 percent. It’s now 1.8 percent.
This fantastic improvement in our finances is due, we’re told, primarily to the Independent Payment Advisory Board. This board, to be established in 2014 (after the next election, of course) is charged with recommending cuts to Medicare and Medicaid providers when their costs grow too fast.
We’ve had laws mandating such cuts for years, and they are routinely repealed. Indeed, President Obama signed the latest such repeal last June. But rather than laugh out loud at this cost-control mechanism, the Medicare trustees, three-quarters of whom were appointed by the president, assume in their 2010 report that these cuts will be made -- to the dollar. And the 2012 budget cites the report’s fictional forecast as its authoritative source.
No one takes the 2010 Medicare trustee report’s long-run projections seriously, least of all Richard Foster, Medicare’s chief actuary. Foster added this statement to the end of the report: “The financial projections shown in this report for Medicare do not represent a reasonable expectation…in either the short range…or the long range.”
This isn’t the first administration to conceal our long- term fiscal problem. Back in 1993, Alice Rivlin, then deputy director of the Office of Management and Budget, asked me and economists Alan Auerbach and Jagadeesh Gokhale to prepare a long-term fiscal gap/generational accounting for inclusion in President Bill Clinton’s 1994 budget.
We worked for months on the analysis, but two days before the budget’s release, the study was excised from the budget. We were shocked, but, in retrospect, the politics are clear. The Clinton administration wanted to claim it was fiscally prudent and the study, which showed unofficial debt growing at enormous rates, showed the opposite.
The fiscal gap’s next near appearance in a president’s budget was in 2003. Treasury Secretary Paul O’Neill commissioned Gokhale and Kent Smetters to do the study. It showed a massive $45 trillion fiscal gap -- not a great basis for pushing tax cuts or introducing the prescription-drug benefit for seniors, known as Medicare Part D. O’Neill was ousted on Dec. 6, 2002, and a couple of days later the fiscal-gap study was discarded.
I’m not sure whether censoring the fiscal gap is more dishonorable than fudging it. What I do know is that we can’t assume our problems away and that we should have expected far better of this president who ever voted for him.
Monday, February 21, 2011
Hamid Karzai (Afghanistan)
Zillur Rahman (Bangladesh)
Joseph Kabila (Congo)
Mahmoud Ahmadinejad (Iran)
Shimon Peres (Israel)
Emir Sabah Al-Ahmad (Kuwait)
Asif Zardari (Pakistan)
Emir Hamad bin Khalifa AlThani (Qatar)
Abdullah bin Abdul Aziz (Saudi Arabia)
Assorted (United Arab Emirates)
Ali Abdullah Saleh (Yemen)
Sunday, February 20, 2011
My best visual of the weekend was on the way to the Super Bowl in the white limo that must have held 16 of us and a driver that if truth be told had no business driving that beast because if corner curbs were points he would have won big! We were to park the limo in the 6 Flags Over Texas parking lot and supposedly be shuttled to the front of the stadium. The traffic was moving slowly and we were next to a very pretty blue body of water that after pulling up my Swaro El's showed a large number of Shoveler in full spring plumage and some Coot. My fellow limo riders couldn't figure out what I was looking at so my usual retort of "I'm a bird guy" caused no undue consternation. My eyes panned the spring-like blue color of windy Texas water and there for a brief millisecond I spotted the white. I kept looking, the limo kept moving and I thought what I had spotted was my imagination but there he was, in full spring plumage, in all of his beauty. Swimming fast into the wind, I believe mate-less he was diving into the lake bottom and spending little time in the sunlight on top of the shimmering waves. There is just something special about a bull canvasback in the spring.
Seeing that white was great icing on a Super weekend in Dallas. My fellow limo riders simply missed it.
Saturday, February 19, 2011
I don’t know if you read ZH. I bet you do. It would be disappointing to learn that you didn’t read some of the leading edge financial blogs. But if not, I bet at least one of your staffers does. If you’re any kind of manager, they won’t be afraid to bring this to your attention. Or perhaps Ron Paul’s staffers can shoot a copy over to your office. It’s a simple petition, really, in the traditional sense. I hope you will consider it.
I understand the conclusion you came to in 2008 and early 2009 after a career spent studying the Great Depression, and I also understand that you feel justified in using whatever channels are available to you as proxy helicopters to drop cash. And it works. You’ve essentially manipulated the US and world markets as though they were remote control funny-cars, bent to whatever short-term route you desire, though we have yet to see what the second and third-order effects are. I mean, beyond food riots, destabilization of the Middle East, gas prices that American citizens won’t ultimately be able to afford, agriculture prices that will play havoc with corporate margins and retail food prices, the US dollar losing its reserve-currency status… things like that.
Having managed money for a while, with all the implicit strategic and tactical decisions, I also understand thesis drift – where you make a decision based on a set of factors, but then continue the policy, or hold the position, based on new reasoning (excuses) that were not part of the original thought process, even after those factors change. An easy example is when a portfolio manager buys a position based on a chart, then, when the chart breaks and he has a small loss, convinces himself that there are other, fundamental factors (it’s cheap now), which support holding the position until it gets back to even. This usually leads to a larger loss. It’s not the sort of lesson you learn in a classroom.
And so it is with you. I understand how it started – the raw panic that you must have felt over some of those weekends in 2008, after belatedly becoming aware that most of the financial system teetered precariously above a fragile foundation of leverage, artifice, obfuscation, and outright fraud - and how emergency conditions justified extreme action in 2008, as distasteful as it must have been for an economist to allocate the capital of honest savers to those that had, in fact, proved to have been the biggest destroyers of capital. I even understand, though I disagree with, the reasoning beyond your latest tactical success / potential strategic disaster – QE-FOREVER.
And now, on the horizon, I see the thesis drift coming: ‘How,’ you ask yourself, ‘will the US possibly roll all these treasuries, to support the ridiculous politicians’ deficit spending, without me in there as an unnatural source of demand? And, if I don’t keep interfering, day by day and auction by auction, MY GOD, what will happen to the value of the enormous, leveraged debt portfolio that the Fed just purchased at a generational top tick, when the auctions struggle and rates begin to take the fast train up? WHAT HAVE I DONE??’ Late at night, when it’s just you, the ceiling, and the ghosts of the Princeton lunchroom, you must worry: ‘At a 5% 10 year, I’ll have one of the largest paper losses in the history of global finance, and, my own obfuscation aside, sooner or later people will clue in, realize they never pulled a lever for my manifesto, and put my head on a stick!’
But here’s the thing, Ben: the deficit spending that you pay lip service to arguing against, which your current policies support, AND THEREFORE FACILITATE, is a real problem. It’s out of control. There is no solution in sight. And, most importantly, there is no URGENCY for a solution to a problem that is, ultimately, existential in terms of capitalism and free markets because the market has stopped giving us any signal other than the delusion you wish to transmit. The barbarian hordes are on the hill above us, looking down and licking their lips, but you’ve put a mirage of QE –colored camouflage serenity in front of them, so that Americans can look past the spiked battle hammers and chain mail of the aggressor, and the rumblings from the beasts, seeing, instead, great payment terms on a new ninety eight inch flat-screen television. YOU are helping to paper over a problem which needs, instead, to be viewed in stark relief.
The danger needs to be FELT, Ben. It needs to have the same urgency as was owed that 353 plane radar cluster off the coast of Hawaii on December 7, 1941. Markets need to be telling us there is a problem, but, because of you, they can’t. Harnessed to your purpose, they’ve stopped serving the ones that they were meant for, allowing one of the most misguided policy trajectories in the history of mankind, to appear benign and without effect. YOU are forestalling a crisis with a thin veneer of paper-mache over an enormous hole in the path to a secure future, and allowing our elected leaders, who have failed in either understanding or effectively communicating the problems, to diddle and prevaricate. And, ultimately, your fix is not sustainable either, so what will you have saved us from, when it’s finally too late, and the engine’s still coughing, and we’re contemplating the trees instead of the runway?
As a highly regarded economist you must understand that recessions have a cyclical purpose. The lows in the business cycle force capital out of poor decisions and into better uses. The lulls are what convince people that risk is real, and that it must, therefore, be accounted for, even when things feel good. The lows are what teach us that 50x leverage is not a good policy - not when you’re an investment bank, not when you’re a hedge fund, not when you’re The Fed. Not EVER! The lows are when failed policies, and failed policy-makers, are seen for what they are. Families adjust, companies adjust, leadership adjusts, and, ultimately, nations adjust. What, do you think, would have been the result of papering over the policies of a Carter or a Nixon? What if we had just shot enough money into the system that they could destroy our economy, or the lawful fabric of our democracy, without being able to see and respond to the critical warnings that free markets give? The result, Ben, would have been no solution. No re-examination of our democratic principles. No Volcker. No Reagan. No fresh image of the city on the hill. Perhaps no post-cold-war boom.
The inevitable history of nations is that they fail, but not always due to the ill-intentioned acts of a despot or conquering army. They can also fail amidst the well-meaning attempts of empathetic illusionists and well meaning technocrats, who have everyone’s best interests at heart, but must bend the rules of logic and law this one time, and then another, due to circumstances that only they can see clearly enough; circumstances that must be dealt with through policy and procedure that no citizenry, given full understanding of its complexities or ultimate effects, would accept.
Things aren’t working, Ben. In your mind, what’s evidently called for is extra-normal production from the machine that you know how to operate. But that’s not really what we need. What we need is for failing policies to fail. We need blathering idiots to be voted out of office. We need America to wake up to the unfolding tragedy in front of them and feel the raw desperation that is a necessary precursor to change - not the shallow, manipulative change of a narcissistic wordsmith, but the deep fundamental change that requires fear as a catalyst, and that sets up generations of capitalist and democratic success. We need Americans to look up on the hill and say, MY GOD, I think that creature with horns on his helmet has a sword, and he’s pointing it at my children. Maybe I should confront him.
But first, Ben, you have to move the mirage. And get out of the line of fire.
And another reader is kind enough to share his comparable comment to the Fed, submitted on August 3, 2010, together with the Fed's response, which in retrospect, and in light of the Fed's recently announced third mandate looks simply hilarious and painfully disingenuous.
Dear Chairman Bernanke and Fed Board:
I am a centrist voter who supported President Obama but who also believes strongly in the need for fiscal responsibility. While I am not a financial expert, I do have an economics degree and understand fiscal and monetary policy issues better than most citizens.
Yesterday, on Monday, Aug 2nd, I watched the stock market go up over 2% despite a month of bad economic news. Today, there was even more bad news -- existing home sales, factory orders, consumer spending and personal incomes -- and yet the market is down only marginally. In any normal world, the market responds to fundamentals.
Yet, in the United States today it does not. The only reason the stock market (and other asset prices, e.g. housing) are supported at current levels is the perceived near certainty of further Federal Reserve intervention (aka "quantitative easing"). Speculation of further quantitative easing is clearly evident in the financial press (CNBC, WSJ, Bloomberg, etc.), and was exacerbated by Mr. Bullard last week. The Federal Reserve should not -- and ultimately cannot -- prevent markets from reaching equilibrium. This means asset prices must fall to match both declining personal and national incomes, which are the natural consequences of globalization (and misguided US trade policy) on US GDP relative to the rest of the world.
Therefore, the Fed should not manipulate markets in an attempt to make up for: 1) misguided deregulation (i.e. abandonment of Glass-Steagall during the Clinton Admin, made worse under the Bush Admin) 2) irresponsible, bubble-inducing easy money policies by the Fed under Greenspan 3) fiscal irresponsibility by the Congress 4) globalization While quantitative easing may have been necessary in late 2008-early 2009 to stabilize the economy, I am writing to implore you to please stop any discussion of further easing. Please have the courage to follow former Fed Chairman Volcker''s example and let the economy go through a difficult adjustment period so it can have a REAL recovery.
And the Fed's reponse:
Dear Mr. [redacted]:
Thank you for your most recent correspondence to Chairman Bernanke and the Board members.
The Chairman and Board members receive a great number of letters daily. As public figures with many daily responsibilities, they are unable to reply to all of those letters personally or to acknowledge receipt of each correspondence. However, they appreciate receiving observations and advice that bear on the Federal Reserve's responsibilities, particularly from people who have concerns about how the economy is functioning.
Also please know that the Federal Reserve's monetary policy actions are not aimed at correcting or influencing any particular market. The goal of monetary policy is to foster conditions conducive to sustaining sound, noninflationary economic growth over time and policymakers must make decisions that provide the greatest benefit overall.
Again, thank you for taking the time to share your views.
Friday, February 18, 2011
Pump It Up
Down in the pleasure centre,
hell bent or heaven sent,
listen to the propaganda,
listen to the latest slander.
There’s nothing underhand
that she wouldn’t understand.
Pump it up until you can feel it.
Pump it up when you don’t really need it.
Elvis Costello - Pump It Up
I had been planning an article based on the Green Day song – Static Age - about the propaganda, lies and misinformation that are endlessly directed at the American people by the government, the mainstream corporate media, and the wealthy elite that control the levers of our society. Then Barack Obama presented his 2012 Budget proposal, including his 10 year projection for our country. I know you’ve heard the term Peak Oil, but the term that came to my mind when I saw Obama’s budget was Peak Bullshit. I thought that would be a great article name, but some sites wouldn’t like the foul language. I was in a quandary until the Elvis Costello song Pump It Up came on the radio while I was driving to work. Down in the pleasure center of Washington DC, the propaganda, slander and most blatant lies are spoken without a hint of guilt or even the faintest whiff of shame. The politicians in Washington DC on both sides of the aisle believe the American people are stupid, gullible, apathetic and easily manipulated. They may be right, but there are a few people out there who can cut through their bullshit and find the truth.
Obama, Wall Street, and the corporate mouthpieces in the mainstream media have been pumping up the American people for months with false data, unwarranted optimism, bank profits created out of thin air by accounting fraud, and attempting to create an economic recovery built on a foundation of sand, supported only by lies. The Obama budget is worse than a joke. It is a tragic joke. It amazes me that he can stand in front of the American people and present such a lie. The liberal media then unquestioningly presents the budget as a frugal cost cutting proposal that will reduce deficits and inflict painful cuts upon the poor American people. It would be laughable, if it wasn’t so sad. One look at Obama’s deficit projections for FY11 and FY12, presented one year ago, should be enough to convince you that no one in Washington DC has a clue what they are doing.
Year Spending Surplus
2011 $3,834 -$1,267
2012 $3,755 -$828
Obama projected a two year deficit of $2.1 trillion. His current projection, just one year later, is $2.75 trillion. He missed it by this much.
The rocket scientists running our country underestimated the deficit by 31% in the space of one year. I suppose that is considered highly accurate for a government drone. Now let’s get some perspective on Obama’s projected FY11 deficit of $1.65 trillion. This is the projected DEFICIT. Do you remember back to the Clinton administration? Did you feel like your Federal government wasn’t spending enough? In 1998 the TOTAL SPENDING of the Federal government was $1.65 trillion. We now run deficits that equal the entire budget of the United States in 1998, without blinking an eye or questioning how we got here. The politicians have scared the populace into thinking that the country will collapse without the Federal Government spending $3.8 trillion of your money, every year.
Can you hear the sound of the static noise?
Blasting out in stereo
Cater to the class and the paranoid
Music to my nervous system
Advertising love and religion
Murder on the airwaves
Slogans on the brink of corruption
Vision of blasphemy, war and peace
Screaming at you
I can’t see a thing in the video
I can’t hear a sound on the radio
In stereo in the static age – Green Day – Static Age
The politicians prefer their actions be bathed in shades of grey. The corporate payoffs, backroom deals, union arm twisting and selling of votes to the highest bidder are how business is done in Washington DC. They believe that if there is enough static noise being generated by the mainstream media, then the American public will be distracted and not notice they have destroyed the country. When analyzing Obama’s budget we need some perspective. Below is a chart showing actual Federal spending and deficits from 1999 through 2010 and projections from 2011 through 2021. My assessment is that the Great American Empire peaked in 1999-2000. The unemployment rate was 4% and 64.4% of the working age population, or 137 million Americans, were employed. Corporate profits were surging, along with the stock market. The Federal government was spending $1.8 trillion and generating budget surpluses of $236 billion. The National Debt of $5.7 trillion was only 57% of GDP.
The decline of the American Empire can be seen in the chart of woe. The unemployment rate today is 9%. Only 58.4% of the working age population is employed. Eleven years after peak empire, the working age population has grown by 26 million people and the number of employed Americans has grown by 2.4 million. At least 64.4% of the population would like to be working. This means that there are 14.4 million people who would work if the jobs were available. The Federal government is spending $3.8 trillion and generating deficits of $1.6 trillion. The National Debt is $14.2 trillion, or 94% of GDP. Except for Wall Street banks and mega-corporations, small business profits are weak and the stock market is at the same levels reached in 1999. These are the truths you won’t hear from politicians or the mainstream media.
Year Spending % Change Surplus
1999 $1,702 $125
2000 $1,789 5.1% $236
2001 $1,863 4.1% $128
2002 $2,011 7.9% -$158
2003 $2,160 7.4% -$378
2004 $2,293 6.2% -$413
2005 $2,472 7.8% -$319
2006 $2,655 7.4% -$249
2007 $2,729 2.8% -$161
2008 $2,983 9.3% -$459
2009 $3,518 17.9% -$1,413
2010 $3,456 -1.8% -$1,293
2011F $3,819 10.5% -$1,645
2012B $3,729 -2.4% -$1,101
2013B $3,771 1.1% -$768
2014B $3,977 5.5% -$645
2015B $4,190 5.4% -$607
2016B $4,468 6.6% -$649
2017B $4,669 4.5% -$627
2018B $4,876 4.4% -$619
2019B $5,154 5.7% -$681
2020B $5,422 5.2% -$735
2021B $5,697 5.1% -$774
So now let’s assess the reality of Obama’s ten year budget. If you were to believe the reports in the media, you would think that Obama is cutting deficits and making hard choices. Amazingly, deficits plummet all the way down to “only” $600 billion to $800 billion after 2012. In the chart above, I ignore the revenue side of the equation, because Obama’s assumptions are beyond ridiculous. His assumption of the GDP growing from $15 trillion in 2011 to $24.6 trillion in 2021, a 64% increase, is a fantasy. During the last 10 years, GDP grew by only 51%. So, despite mind numbing debt levels, structurally high unemployment, peak oil, and a rapidly aging population, GDP is going to surge over the next ten years? I certainly believe that. Under the Obama budget, tax revenues will grow from 14.4% of GDP in 2011 to 20% of GDP in 2021. By comparison, the historical average is only 18% of GDP. Some of Obama’s tax revenue assumptions are as follows:
Raising the top marginal income tax rate from 35% to 39.6%. This is a $709 billion/10 year tax hike
Raising the capital gains and dividends rate from 15% to 20%
Raising the estate tax rate from 35% to 45% and lowering the estate tax exemption amount from $5 million ($10 million for couples) to $3.5 million. This is a $98 billion/ten year tax hike
Capping the value of itemized deductions at the 28% bracket rate. This will effectively cut tax deductions for mortgage interest, charitable contributions, property taxes, state and local income or sales taxes, out-of-pocket medical expenses, and unreimbursed employee business expenses. A new means-tested phase-out of itemized deductions limits them even more. This is a $321 billion/ten year tax hike
Massive new taxes on energy, including LIFO repeal, Superfund, domestic energy manufacturing, and many others totaling $120 billion over ten years
Increasing unemployment payroll taxes by $15 billion over ten years
Increasing tax penalties, information reporting, and IRS information sharing. This is a ten-year tax hike of $20 billion.
It is an absolute certainty that the Democrats will lose control of the Senate in 2012. Obama will never get any of his tax increases through a Republican controlled Congress. They are DOA. Therefore, his revenue assumptions are overstated by hundreds of billions every year. Even using his optimistic assumptions, the National Debt would reach $18 trillion in 2015. Using real world numbers, the National Debt will exceed $20 trillion in 2015. In what must be a gag, Obama says that interest on the debt will “only” be $500 billion in 2015. Hysterically, this would mean our debt holders will only require a crumbling empire to pay 2.5% on our debt. How about 5% as a minimum and 10% as a more likely rate? This would put interest on the debt between $1 trillion and $2 trillion per year. The collapse of America is a certainty if Obama’s budgeted spending and deficits play out. Somehow, the majority of Americans are overwhelmed with indifference.
Overwhelmed By Indifference
Some of my friends sit around every evening
and they worry about the times ahead
But everybody else is overwhelmed by indifference
and the promise of an early bed
You either shut up or get cut up;
they don’t wanna hear about it. - Elvis Costello - Radio, Radio
Do you remember when the politicians of both parties were making dire predictions of Great Depressions, economic collapse and 10% unemployment if we didn’t pass their ”save an investment banker” rescue package and the $800 billion “jobs creation” stimulus package? They assured the American people that these expenditures were temporary and were only being made to save the country. Before the crisis, Federal spending was $2.7 trillion. The talking heads at the Fed and in the White House assure us they saved the world. GDP is growing and Obama told me we’ve added over 1 million jobs in the last year. Sounds like the emergency is over. The $400 billion per year of emergency spending should now be rolled back, since it was temporary. Therefore, Obama’s budget surely must going from $3.8 trillion back down to a pre-emergency level of $3.0 trillion in 2012. Not quite. You see, government spending never goes down. His proposal shows $3.7 trillion of spending in FY12. Emergencies never end for a politician in Washington DC. Spending equals power and control over our lives. There will always be another emergency that requires more spending.
You are now hearing the spin from the ideologues on both sides of the aisle about their cost consciousness and desire to restrain spending. It’s all a load of bull. Bush and the Republicans added $4.3 trillion to the National Debt during their reign of error. Obama has matched Bush in the space of 2 1/2 years by adding another $4.3 trillion. There is no effort to cut spending. Obama’s budget shows spending rising from $3.7 trillion in FY12 to $5.7 trillion in FY21. The propaganda and misinformation being spewed from these corrupt politicians is mind numbing.
Again, some perspective is needed to realize how out of control our Federal Government has become. According to the BLS, inflation has risen by 33% since 1999. Real GDP has grown by 23%. The population of the U.S. has grown by 10%. The number of employed Americans has risen by 1.8%. The average pay for a Federal drone (aka worker) has risen by 58%, while the average pay for real workers has risen by only 30%. Therefore, the average non-government employee has seen a decrease in their standard of living as inflation has risen faster than wages. As you can calculate yourself, Federal government spending surged by 124% between 1999 and today. Have you noticed a doubling in service level, competence, educational scores, new energy solutions, or safety and security? What did we get for an extra $2.1 trillion of spending?
What we got was exhausting wars of choice, less freedom, less liberties, less safety, more rules, more regulations, more bureaucrats, more corruption, a financial collapse, and a government that has put us on a path to fiscal ruin. We’ve almost tripled spending on Defense. Are we safer? We’ve more than doubled spending on healthcare. Are we healthier? We’ve more than doubled spending on welfare. Are the poor less impoverished? We’ve more than doubled spending on education. Are our children smarter? The Federal government is out of control. When you hear a politician or pundit detailing the horrors of “spending cuts”, please keep in mind they are lying. There will be no cuts until they are forced upon the government by the looming collapse of our economic system.
Year Defense Pensions Health Care Welfare Education
1999 $333 $431 $332 $165 $56
2000 $359 $454 $352 $171 $60
2001 $366 $481 $390 $183 $64
2002 $422 $503 $427 $224 $78
2003 $483 $518 $469 $242 $91
2004 $543 $537 $509 $238 $96
2005 $600 $565 $549 $246 $106
2006 $621 $591 $583 $250 $128
2007 $653 $636 $642 $254 $102
2008 $730 $669 $671 $313 $102
2009 $794 $739 $764 $407 $91
2010 $847 $756 $821 $496 $140
2011F $965 $801 $882 $488 $130
2012B $925 $813 $866 $424 $121
% Increase 177.8% 88.6% 160.8% 157.0% 116.1%
Now the question is what do we do about it? I know my first inclination would be to do what that Iraqi reporter did a few years ago during a Bush press conference in Iraq. I’d love to throw my shoes at Obama and every lying corrupt politician in America, but the momentary feeling of pleasure would be snuffed out in seconds by a hail of bullets from the Department of Homeland Security thugs guarding these traitors to the American republic.
Below is my CHART OF DOOM. Using real world assumptions, the National Debt will reach $25 trillion by 2019. That level of debt would be 130% of a realistic GDP figure. The interest on this level of debt would likely exceed $2 trillion per year, more than the entire Federal spending budget in 2002. This chart will not come to pass. Our economic system will collapse well before we reach a $25 trillion debt level. This is already baked in the cake. There are not enough politicians willing to tell the truth and not enough citizens that want to hear the truth. The result will be default, insolvency, currency collapse, vaporization of wealth, chaos, and pain.
The only way to avert the coming financial catastrophe is to go Egyptian on their asses. Maybe mobs of Americans surrounding the White House, Federal Reserve building and Wall Street bank headquarters would get their attention. It wouldn’t take a majority, but a minority of angry Americans willing to fight for the future of the country. The anger is building. More people are becoming aware. The internet is working its magic, just as it is doing in the Middle East. Those in control can keep pumping out their lies and propaganda, but the truth is plain to see, if you open your eyes.
“It does not take the majority to prevail, but rather an irate, tireless minority, keen on setting brush fire freedom in the minds of men.” - Samuel Adams
CFTC – SEC Joint Commission Report Part Deux
Summary of the Joint CFTC/ SEC Recommendations Regarding Regulatory, Response to the Market Events of May 6th, 2010
The report is out. Click here to read the 14 page report. The Joint CFTC/SEC committee makes 14 recommendations which they intend to focus on to ensure the integrity of our connected market place. We would like to highlight the 3 recommendations that we think are “news” today, and that we have particularly expressed concern about over recent years: Recommendations 10, 11, and 12, which deal with order cancellation fees, internalization, and trade-at rules.
Missing in the report, however, is any discussion of proprietary exchange data feeds, the proliferation of exchanges, or minimum order life. Also, this report is a stark contrast to the September 30th report, which focused more extensively on an algorithm trading eMini futures from a large money manager. The HFT community, at that time, focused on that aspect of the report extensively. This report is an improvement, as it does begin to examine structural inefficiencies and risks in our current market structure.
10. The Committee recommends that the SEC and CFTC explore ways to fairly allocate the costs imposed by high levels of order cancellations, including perhaps requiring a uniform fee across all Exchange markets that is assessed based on the average of order cancellations to actual transactions effected by a market participant. This is a win that they are recommending ANY type of cancellation fee. However we note that when you read the wording carefully, it will not be a recommendation for a fee on all cancellations; rather it will be a recommendation for a fee on cancellations that exceed a firms “normal pattern”. Lots of wiggle room here folks.
11. The Committee recommends that the SEC conduct further analysis regarding the impact of a broker-dealer maintaining privileged execution access as a result of internalizing its customer’s orders or through preferencing arrangements. The SEC’s review should, at a minimum, consider whether to (i) adopt its rule proposal requiring that internalized or preferenced orders only be executed at a price materially superior (e.g., 50 mils for most securities) to the quoted best bid or offer, and/or (ii) require firms internalizing customer order flow or executing preferenced order flow to be subject to market maker obligations that requires them to execute some material portion of their order flow during volatile market periods.
A related concern has to do with the effects. WOW. Look into obligations for internalizers too? While we don’t hold particularly valuable any of these affirmative obligation rules, it is nice to see that they are acknowledging how damaging the internalizer model has been. They also feel at a minimum that internalizers should price improve by 50 mils. This is an accommodation for crossing pools that tend to trade larger blocks, and when they trade sub-penny, they trade in the middle of the spreads (half a penny). THIS IS HUGE.
12. The Committee recommends that the SEC study the costs and benefits of alternative routing requirements. In particular, we recommend that the SEC consider adopting a “trade at” routing regime. The Committee further recommends analysis of the current “top of book” protection protocol and the costs and benefits of its replacement with greater protection to limit orders placed off the current quote or increased disclosure of relative liquidity in each book.
They want to look into protecting Depth Of Book! This is big also. Their other points, which were widely expected, follow:
1. The Committee concurs with the steps the SEC (working with the Exchanges and FINRA) has taken to
a. Create single stock pauses/circuit breakers for the Russell 1000 stocks and actively traded ETFs1
b. Enact rules that provide greater certainty as to which trades will be broken when there are multi stock aberrant price movements, and
c. Implement minimum quoting requirements by primary and supplemental market makers that effectively eliminate the ability of market makers to employ “stub quotes”
2. The Committee recommends that the Commissions require that the pause rules of the Exchanges and FINRA be expanded to cover all but the most inactively traded listed equity securities, ETFs, and options and single stock futures on those securities.
3. The Committee recommends that the SEC work with the Exchanges and FINRA to implement a “limit up/limit down” process to supplement the existing Pause rules and that the Commissions clarify whether securities options exchanges and single stock futures exchanges should continue to trade during any equity limit up/down periods.
4. The Committee recommends that the CFTC and the relevant derivative exchanges evaluate whether a second tier of pre-trade risk safeguards with longer timeframes should be instituted when the “five second limit” does not attract contra-side liquidity.
5. The Committee recommends that The Commissions evaluate the present system-wide circuit breakers and consider:
i. reducing, at least, the initial trading halt to a period of time as short as ten minutes
ii. allowing the halt to be triggered as late as 3:30 pm and
iii. using the S&P 500 Index as the triggering mechanism.
This makes immense sense. IT is not a Dow world, after all, and more importantly it is easier to coordinate the many S&P 500 related instruments.
6. The Committee supports the SEC’s “naked access” rulemaking and urges the SEC to work closely with FINRA and other Exchanges with examination responsibilities to develop effective testing of sponsoring broker-dealer risk management controls and supervisory procedures.
7. The Committee recommends that the CFTC use its rulemaking authority to impose strict supervisory requirements on DCMs or FCMs that employ or sponsor firms implementing algorithmic order routing strategies and that the CFTC and the SEC carefully review the benefits and costs of directly restricting “disruptive trading activities “with respect to extremely large orders or strategies. Algo providers may have an obligation to develop procedures, and have responsibility for, the actions of their clients, and how those clients interact with the algo technology.
8. The Committee recommends that the SEC evaluate the potential benefits which might be gained by changes in maker/taker pricing practices, including building in incentives for the Exchanges to provide for “peak load” pricing models. Extra Rebates! Extra Fees! They will explore “what if” rebates were greater during times of stress, and “what if” it were more expensive to hit bids.
9. The Committee recommends that the SEC evaluate whether incentives or regulations can be developed to encourage persons who engage in market making strategies to regularly provide buy and sell quotations that are “reasonably related to the market.”
Will any mandated obligation outweight potential huge losses? Reasonably related to the market? How do they deal with a quote that can be cancelled before you hit it? Will firms like Getco have a huge advantage since their technology is the fastest (and their colo the best)?
13. The Committee recommends that the Commissions consider reporting requirements for measures of liquidity and market imbalance for large market venues.
14. The Committee recommends that the SEC proceed with a sense of urgency, and a focus on meaningful cost/benefit analysis, to implement a consolidated audit trail for the US equity markets and that the CFTC similarly enhance its existing data collection regarding orders and executions.
Wednesday, February 16, 2011
Investors really, really, really should learn how to use FINRA Brokercheck before entering-into a relationship with a new broker. Look up both the individual broker(s) and the firm. As an example, I pulled-up David Lerner Associates' report, and it shows 13 Regulatory Events (censures & fines) and 14 arbitrations. You can read all the fun details, like the several fines in the $50,000-$100,000+ range over the past 10 or so years for shady sales/marketing/disclosure practices. Most of the arbitrations are for things like lack of suitability, breach of contract, failure to supervise, fraudulent activity, and misrepresentation. These things all sound really bad but in each of the arbitration cases, the amounts awarded were far less than the amounts requested by clients, indicating (depending on what you think about FINRA) that either the client complaints were overstated and/or that FINRA exists primarily to protect it's member firms, not their clients (again, another conversation for another time.)
There is 1 pending Regulatory investigation from the middle of 2010 that's still ongoing that caught my eye. It accuses DLA of taking excessive and unwarranted markups on muni bonds ranging from 3% to almost 6% (this is really high!), and markups on CMO (Collateralized Mortage Obligations) ranging from 4% to almost 13% (this is seriously out of control!). The majority (if not entirety) of the securities sold to clients are alleged to be from DLA's own inventory, which would mean their cost of obtaining these securities was minimal (legalese: de minimus), and best, because of the way securities regulations work, these markups are NOT disclosed to clients, rather they are simply added to the price the client sees on their trade confirms. This is a practice I think needs to be made absolutely illegal, but again, that's another conversation for another time.
DLA, of course, "vigorously denies these allegations, believes its claims to be unfounded, and expects to be completely vindicated upon the conclusion of the process." If there is any truth in the FINRA allegations that DLA is/was engaged in the practice of selling products out of inventory with ridiculously high, undisclosed markups, that is a MAJOR red flag. There is no reason for a firm to charge markups on vanilla fixed income products anywhere close to the range the FINRA claims allege. Seldom have I heard of markups on ANY product, including structured ones, higher than 3%. 5% for a muni bond is absolutely nuts and 12% for a CMO, I don't think I can imagine a scenario where that'd be even remotely appropriate.
Look, I'm not saying David Lerner Associates is a chop shop or accusing any individual broker(s) there of being scumbags. There's bad apples and oversights at EVERY firm eventually, it happens (in every industry, so don't just pick on financial services). Also, this most recent FINRA investigation is still un-settled, so we'll what happens when all is said and done. Clients should buy into brokers' hype with a very, very skeptical eye. Brokers, by definition, are out to make money off you; they do not have a fiduciary responsibility to you, as opposed to financial advisors, who do. Know the difference.
When you're lured-into an investment seminar - which is really a sales presentation - be wary of promises that seem a bit too good to be true. The vast majority of retail investors should have ZERO exposure to CMO's or the type of REIT's DLA sells. There's nothing wrong necessarily with owning munis or many of the other type of securities DLA hawks, but were I buying any fixed income securities from them, I'd get a quote from at least one other shop/service before so doing.
No one has your best interest in mind more than you do. Act like it. Caveat Emptor.
Why Isn't Wall Street in Jail?
Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them. Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.
Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. "If the allegations in these settlements are true," says Jed Rakoff, a federal judge in the Southern District of New York, "it's management buying its way off cheap, from the pockets of their victims."
To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."
But that hasn't happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.
Just ask the people who tried to do the right thing.
Here's how regulation of Wall Street is supposed to work. To begin with, there's a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly "self-regulating organizations" like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.
The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called "disclosure violations" — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC's director of enforcement.
The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC's army of 1,100 number-crunching investigators to make their cases. In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.
That's the way it's supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who's in office or which party's in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country's top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. "I think you've got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street," he says.
In the hierarchy of the SEC, the chief accountant plays a major role in working to pursue misleading and phony financial disclosures. Turner held the post a decade ago, when one of the most significant cases was swallowed up by the SEC bureaucracy. In the late 1990s, the agency had an open-and-shut case against the Rite Aid drugstore chain, which was using diabolical accounting tricks to cook their books. But instead of moving swiftly to crack down on such scams, the SEC shoved the case into the "deal with it later" file. "The Philadelphia office literally did nothing with the case for a year," Turner recalls. "Very much like the New York office with Madoff." The Rite Aid case dragged on for years — and by the time it was finished, similar accounting fiascoes at Enron and WorldCom had exploded into a full-blown financial crisis. The same was true for another SEC case that presaged the Enron disaster. The agency knew that appliance-maker Sunbeam was using the same kind of accounting scams to systematically hide losses from its investors. But in the end, the SEC's punishment for Sunbeam's CEO, Al "Chainsaw" Dunlap — widely regarded as one of the biggest assholes in the history of American finance — was a fine of $500,000. Dunlap's net worth at the time was an estimated $100 million. The SEC also barred Dunlap from ever running a public company again — forcing him to retire with a mere $99.5 million. Dunlap passed the time collecting royalties from his self-congratulatory memoir. Its title: Mean Business.
Atlanta is composed mostly of one-way streets. The only way to get out of downtown Atlanta is to turnaround and start over when you reach Greenville, South Carolina.
All directions start with, "Go down Peachtree" and include the phrase, "When you see the Waffle House." except that in Cobb County, where all directions begin with, "Go to the Big Chicken."
Peachtree Street has no beginning and no end and is not to be confused with:
Peachtree Industrial Boulevard
Atlantans only know their way to work and their way home. If you ask anyone for directions, they will always send you down Peachtree. Atlanta is the home of Coca-Cola. Coke's all they drink there so don't ask for any other soft drink unless it's made by Coca-Cola. Even if you want something other than a Coca-Cola, it's still called Coke. The gates at Atlanta's Hartsfield-Jackson International Airport are about 32 miles away from the Main Concourse, so wear sneakers and pack a lunch.
The 8 a.m. rush hour is from 6:30 a.m. to 10:30 a.m.
The 5 p.m. rush hour is from 3:00 p.m. to 7:30 pm. (Don’t forget the lunch time rush hour!)
Friday's rush hour starts Thursday afternoon and lasts through 2 a.m. Saturday.
Only a native can pronounce Ponce De Leon Avenue, so do not attempt the Spanish pronunciation. People will simply tilt their heads to the right and stare at you. The Atlanta pronunciation is " pawntz duh LEE-awn."
And yes, they have a street named simply, "Boulevard." The falling of one raindrop causes all drivers to immediately forget all traffic rules. If a single snowflake falls, the city is paralyzed for three days and it's on all the channels as a news flash every 15 minutes for a week. Overnight, all grocery stores will be sold out of milk, bread, bottled water, toilet paper, and beer. I-285, the loop that encircles Atlanta which has a posted speed limit of 55 mph but you have to maintain 80 mph just to keep from getting run over and is known to truckers as "The Watermelon 500." Don't believe the directional markers on highways: I-285 is marked "East" and "West" but you may be going North or South. The locals identify the direction by referring to the "Inner Loop" and the "Outer Loop." If you travel on Hwy 92 North, you will actually be going southeast.
Never buy a ladder or mattress in Atlanta. Just go to one of the interstates and you will soon find one in the middle of the road. The last thing you want to do is give another driver the finger, unless your car is armored, your trigger finger is itchy and your AK-47 has a full clip. Possums sleep in the middle of the road with their feet in the air. There are 5,000 types of snakes and 4,998 live in Georgia. There are 10,000 types of spiders. All 10,000 live in Georgia, plus a couple no one has seen before.
If it grows, it sticks. If it crawls, it bites. If you notice a vine trying to wrap itself around your leg, you have about 20 seconds to escape, before you are completely captured and covered with Kudzu.
It's not a shopping cart, it's a buggy. "Fixinto" is one word (I'm fixinto go to the store) - also can be pronounced "Fixinta". Sweet Tea is appropriate for all meals and you start drinking it when you're 2 years old. "Jeet?" is actually a phrase meaning "Did you eat?" "How's Momma-nem" means: "How's Mother and all of the other children and other members of the family doing?"
If you understand these jokes, forward them to your friends from Atlanta, Georgia, and those who just wish they were.
Tuesday, February 15, 2011
Monday, February 14, 2011
By Robert A. Hall
I'm 63. Except for one semester in college when jobs were scarce and a six-month period when I was between jobs, but job-hunting every day, I've worked, hard, since I was 18. Despite some health challenges, I still put in 50-hour weeks, and haven't called in sick in seven or eight years. I make a good salary, but I didn't inherit my job or my income, and I worked to get where I am. Given the economy, there's no retirement in sight, and I'm tired. Very tired.
I'm tired of being told that I have to "spread the wealth" to people who don't have my work ethic. I'm tired of being told the government will take the money I earned, by force if necessary, and give it to people too lazy to earn it.
I'm tired of being told that Islam is a "Religion of Peace," when every day I can read dozens of stories of Muslim men killing their sisters, wives and daughters for their family "honor"; of Muslims rioting over some slight offense; of Muslims murdering Christian and Jews because they aren't "believers"; of Muslims burning schools for girls; of Muslims stoning teenage rape victims to death for "adultery"; of Muslims mutilating the
genitals of little girls; all in the name of Allah, because the Qur'an and Shariâ law tells them to.
I'm tired of being told that out of "tolerance for other cultures" we must use our oil money to fund mosques and mandrassa Islamic schools to preach hate in and , while no American nor Canadian group is allowed to fund a church, synagogue or religious school in Saudi Arabia to teach love and tolerance.
I'm tired of being told I must lower my living standard to fight global warming, which no one is allowed to debate. I'm tired of being told that drug addicts have a disease, and I must help support and treat them, and pay for the damage they do. Did a giant germ rush out of a dark alley, grab them, and stuff white powder up their noses while they tried to fight it off?
I'm tired of hearing wealthy athletes, entertainers, and politicians of both parties talking about innocent mistakes, stupid mistakes, or youthful mistakes, when we all know they think their only mistake was getting caught. I'm tired of people with a sense of entitlement, rich or poor.
I'm real tired of people who don't take responsibility for their lives and actions. I'm tired of hearing them blame the government, or discrimination or big-whatever for their problems. Yes, I'm damn tired. But I'm also glad to be 63. Because, mostly, I'm not going to have to see the world these people are making. I'm just really sorry for my grandchildren.
Robert A. Hall is a Marine Vietnam veteran who served five terms in the Massachusetts Senate.
Wednesday, February 09, 2011
Tuesday, February 08, 2011
Seriously. This is a real offer. In fact, you really can’t turn me down, as you’ll come to understand in a moment…Here’s the deal. You’re going to start a business or expand the one you’ve got now. It doesn’t really matter what you do or what you’re going to do. I’ll partner with you no matter what business you’re in – as long as it’s legal.
But I can’t give you any capital – you have to come up with that on your own. I won’t give you any labor – that’s definitely up to you. What I will do, however, is demand you follow all sorts of rules about what products and services you can offer, how much (and how often) you pay your employees, and where and when you’re allowed to operate your business. That’s my role in the affair: to tell you what to do.
Now in return for my rules, I’m going to take roughly half of whatever you make in the business each year. Half seems fair, doesn’t it? I think so. Of course, that’s half of your profits. You’re also going to have to pay me about 12% of whatever you decide to pay your employees because you’ve got to cover my expenses for promulgating all of the rules about who you can employ, when, where, and how. Come on, you’re my partner. It’s only “fair.”
Now… after you’ve put your hard-earned savings at risk to start this business, and after you’ve worked hard at it for a few decades (paying me my 50% or a bit more along the way each year), you might decide you’d like to cash out – to finally live the good life.
Whether or not this is “fair” – some people never can afford to retire – is a different argument. As your partner, I’m happy for you to sell whenever you’d like… because our agreement says, if you sell, you have to pay me an additional 20% of whatever the capitalized value of the business is at that time.
I know… I know… you put up all the original capital. You took all the risks. You put in all of the labor. That’s all true. But I’ve done my part, too. I’ve collected 50% of the profits each year. And I’ve always come up with more rules for you to follow each year. Therefore, I deserve another, final 20% slice of the business.
Oh… and one more thing…Even after you’ve sold the business and paid all of my fees… I’d recommend buying lots of life insurance. You see, even after you’ve been retired for years, when you die, you’ll have to pay me 50% of whatever your estate is worth. After all, I’ve got lots of partners and not all of them are as successful as you and your family. We don’t think it’s “fair” for your kids to have such a big advantage. But if you buy enough life insurance, you can finance this expense for your children.
All in all, if you’re a very successful entrepreneur… if you’re one of the rare, lucky, and hard-working people who can create a new company, employ lots of people, and satisfy the public… you’ll end up paying me more than 75% of your income over your life. Thanks so much.
I’m sure you’ll think my offer is reasonable and happily partner with me… but it doesn’t really matter how you feel about it because if you ever try to stiff me – or cheat me on any of my fees or rules – I’ll break down your door in the middle of the night, threaten you and your family with heavy, automatic weapons, and throw you in jail. That’s how civil society is supposed to work, right? This is Amerika, isn’t it?
That’s the offer Amerika gives its entrepreneurs. And the idiot congresscritters in Washington wonder why there are no new jobs…
Monday, February 07, 2011
Wednesday, February 02, 2011
"It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place."
Tuesday, February 01, 2011
( Data as of January 31, 2011 )
State / November October November November 2010 vs
Territory 2009 2010 2010 Oct 2010 Nov 2009
Alabama 777,672 855,732 863,606 0.9% 11.1%
Alaska 69,048 66,363 79,242 19.4% 14.8%
Arizona 986,276 1,055,205 1,050,181 -0.5% 6.5%
Arkansas 455,393 483,223 487,786 0.9% 7.1%
California 3,041,650 3,499,878 3,521,881 0.6% 15.8%
Colorado 379,956 428,941 435,306 1.5% 14.6%
Connecticut 313,839 367,664 370,665 0.8% 18.1%
Delaware 102,870 127,255 129,049 1.4% 25.4%
District of Columbia 113,672 130,170 131,611 1.1% 15.8%
Florida 2,430,767 2,951,682 2,994,413 1.4% 23.2%
Georgia 1,506,811 1,710,882 1,732,865 1.3% 15.0%
Guam 34,810 39,037 39,469 1.1% 13.4%
Hawaii 131,361 150,480 153,018 1.7% 16.5%
Idaho 170,962 216,658 219,271 1.2% 28.3%
Illinois 1,569,325 1,720,960 1,732,169 0.7% 10.4%
Indiana 781,420 860,911 863,489 0.3% 10.5%
Iowa 327,486 352,981 351,898 -0.3% 7.5%
Kansas 254,669 294,947 295,787 0.3% 16.1%
Kentucky 757,651 808,308 813,041 0.6% 7.3%
Louisiana 802,409 871,159 866,905 -0.5% 8.0%
Maine 219,862 242,806 241,117 -0.7% 9.7%
Maryland 527,111 630,341 643,651 2.1% 22.1%
Massachusetts 720,511 793,872 799,770 0.7% 11.0%
Michigan 1,679,746 1,901,600 1,920,330 1.0% 14.3%
Minnesota 406,313 459,160 473,776 3.2% 16.6%
Mississippi 569,352 607,556 612,889 0.9% 7.6%
Missouri 877,846 927,581 931,933 0.5% 6.2%
Montana 106,343 118,915 120,013 0.9% 12.9%
Nebraska 154,674 170,063 170,731 0.4% 10.4%
Nevada 254,376 317,641 322,950 1.7% 27.0%
New Hampshire 96,729 110,727 111,518 0.7% 15.3%
New Jersey 578,954 702,119 706,702 0.7% 22.1%
New Mexico 334,537 393,656 399,454 1.5% 19.4%
New York 2,623,264 2,918,849 2,934,493 0.5% 11.9%
North Carolina 1,285,157 1,503,558 1,531,255 1.8% 19.1%
North Dakota 58,174 60,638 60,681 0.1% 4.3%
Ohio 1,542,230 1,710,948 1,772,608 3.6% 14.9%
Oklahoma 563,360 613,505 615,191 0.3% 9.2%
Oregon 672,036 744,317 749,498 0.7% 11.5%
Pennsylvania 1,508,095 1,663,135 1,673,714 0.6% 11.0%
Rhode Island 126,870 152,373 154,031 1.1% 21.4%
South Carolina 771,540 834,846 839,109 0.5% 8.8%
South Dakota 90,510 99,327 99,826 0.5% 10.3%
Tennessee 1,185,791 1,263,470 1,264,407 0.1% 6.6%
Texas 3,228,061 3,893,077 3,925,119 0.8% 21.6%
Utah 214,761 271,868 268,216 -1.3% 24.9%
Vermont 83,342 88,567 89,316 0.8% 7.2%
Virginia 753,035 829,940 837,005 0.9% 11.2%
Virgin Islands 19,531 21,624 22,028 1.9% 12.8%
Washington 897,113 1,015,622 1,019,791 0.4% 13.7%
West Virginia 332,365 344,644 345,683 0.3% 4.0%
Wisconsin 662,030 766,353 771,413 0.7% 16.5%
Wyoming 32,332 35,703 35,924 0.6% 11.1%
TOTAL 38,183,998 43,200,837 43,595,794 0.9% 14.2%
The following areas receive Nutrition Assistance Grants which provide benefits analogous to the Supplemental Nutrition Assistance Program: Puerto Rico, American Samoa, and the Northern Marianas.