So it seems that Fred Thompson and I have been reading the same tea leaves on the economy. You have heard what he has had to say about the current status of the bailouts, the impending 2nd stimulus plan, and President-elect Obama's economic policies for 2009?

If you have not, here are his own words as they can be found at his informative site FredPac.com



Oh I bet the kids are just drooling with anticipation of what will be under the tree. I bet that if you follow the Government's plans it won't be a college tuition.

Labels: auto industry, credit crisis, Economic Stimulus Plan, Fred Thompson, mortgage bailout, U.S. economy

I had some extra time today so I decided to take a look at what has happened this year. I wanted to go back and take a look at the various buyouts and bailouts that the Government has backed, and the promises made so far. And the numbers are horrendous.

The main focus so far is on the $1.5 trillion that has been authorized and/or spent thus far. $700 billion for the bailout of mortgages and the credit crunch, and now another $800 billion for mortgages and consumer loans. But those numbers are not the full amount of cost this year.

The year started with the bailout of Bear Stearns. It cost $29 billion to allow JPMorgan to buy that failed brokerage house. And we were promised that would fix everything. Then there was the $150 billion stimulus package that was promised to fix the sagging economy, which failed. Then came Fannie Mae and Freddie Mac, which Representative Barney Frank publicly pronounced as healthy and secure, that cost $120 billion each (not including the $600 billion that is now part of the $800 billion bailout package). And the numbers are still not done.

AIG cost $120 billion by itself. That though was said to be included in the $700 billion authorized by Congress. That means of the 1/2 of the funds given to Treasury Secretary Paulson only $230 billion was available for everything else needed. Not counting the tens of billions given to banks, or the money spent to buy bad loans at unknown valuations.

Of course there was also Citigroup. This cost $20 billion plus $306 billion for guarantees of their bad loans, for a total of $326 billion. Now that is a problem because if the funds came out of the same pool as AIG, we are in a bigger negative than the spending is already creating. A double negative of sorts. And yes I know that guarantees are not the same as cash, but a guarantee must be backed by something besides words. Which means cash from somewhere.

But let us not forget the $25 billion given to the auto industry. And that has nothing to do with the additional $25 billion that is being asked for now, just roughly 5 weeks later. Which is separate money. And that precedent is going to lead to the requests of the airline, credit card, home building/construction and other industries. If the Government is handing out money to businesses, it would be folly not to get in the line.

So the total is $1.94 trillion dollars. Which does not include Citigroup or the additional amounts from the auto industry. Including that figure we get $2.27 trillion in money that never existed and must be repaid. To be exact that means that every American, each of the 300 million citizens, owes $7,567 to the Government.

It is expected that some of these loans and stock purchases will eventually break-even or turn a profit. The expectation is that will happen in 10 - 15 years. Though it is absolutely unclear how the public will be repaid, though the Government will collect all the money. Thus it is possible that the Government will receive money from the public and hold repayments from loans - effectively being paid twice. And it is very likely that any repayment will be funneled into Government agencies instead of the public, as was attempted by Democrats with the first version of the mortgage bailout bill.

But even if 40% of the loans were to make a 50% profit, the bulk of the debt incurred will still be greater. And that does not cover the direct cash infusions made without a loan or repayment provision - which is about 70% of all the funds so far as I can gather.

And the fun does not end there. Remember that President-elect Obama, pushed by House Speaker Nancy Pelosi, has promised a now $700 billion second stimulus plan. The exact details of this plan are unclear, but some amount will be given to the public and some will be used to fund public works. Or so the loose plans state so far. That would mean that in 1 year the cost is $2.97 trillion.

And President-elect Obama still is pushing to add over $800 billion in new spending for new and/or expanded programs. That makes it $3.77 trillion. Or in terms of cost to you and I - $12,567. That's for every man, woman, and child alive right now - working or not.

Put in different terms, this money could have completely funded the entire NASA budget (roughly $419 billion unadjusted for inflation) since inception nearly 10 times over. We could have funded 1,000 moon landings ($36 billion unadjusted) including all the research and development.

Let me make it more personal. That amount is more than the entire net worth of Oprah Winfrey, Bob Johnson, Tiger Woods, Michael Jordan, Tom Cruise, Bill Gates, George Soros, and Warren Buffett combined and multiplied by 10. It's enough money that every single American citizen, of any age, could go to the average college for 2 years. It's enough money to give every American alive today a 10% down-payment on a $120,000 house.

And there is no guarantee, in fact there is reason to highly doubt, that it will get better.

Labels: AIG, Barney Frank, Bill Gates, Citigroup, Congress, Freddie Mac, mortgage bailout, Nancy Pelosi, NASA, Oprah Winfrey, Tiger Woods, Treasury Secretary Paulson, U.S. economy, Warren Buffett

As the holiday and Christmas seasons quickly approach, even as the stock market and economy falter, I wanted to take a moment to reflect on something that came up in a conversation with a friend of mine. The power of African Americans in the marketplace and the desire for advertising on Black media.

There is no question that Blacks buy things just as every group in America does. But if you were to look at most of the media coverage you might believe that African Americans are laden down with debt and/or depend on the Government for survival. Such a perception is both ignorant and false. And advertisers know it.

Recent projections place the African-American buying power at about $845 billion annually, growing to $1.1 trillion by 2012. That means the buying power of Blacks equals the money spent by the Government this year to save the entire financial and mortgage industries. This amount dwarfs the money being debated and requested by the auto industry. And this is more than double the money that is to be spent by the Government for the 2nd stimulus plan in 2009.

Targeted advertising cost up to 73% more for African Americans than any other group. That’s because the top 17% of affluent African Americans contribute 45% to all the buying power in any 1 year. And Pew research reports have shown that up to 2/3 prefer to emphasis their ethnic identity.

All of that money is part of the reason of the success of Black filmmakers, like Spike Lee and Tyler Perry. It is also part of the support to BET, and various television shows that star prominently African American actors/actresses. And it is one of the reasons why advertisers are including and/or directly marketing to Blacks. McDonald’s was one of the first to do this, but today hundreds of companies are doing so.

And the blogosphere is quickly becoming one of the major focal points of advertisers. Because the buying power of African Americans has grown 166% since 1990, the ability of blogs focused on or attracting African Americans to retain a steady daily influx of viewers is important. The internet allows visitors to connect with their favorite sites several times in a day as new posts are added to the blogs throughout the day; as I have seen in my own blogs as an example.

Political blogs were a huge resource in the Presidential election, and I can personally attest to TV One’s interest as VASS was selected as one of 2 blogs to provide daily coverage of the entire election cycle for their online visitors. Similar is true of all blogs, and especially those targeting African Americans.

Add to this the fact that the Black population tends to be younger and female (though my readers are about 50/50 for gender, age 12 - 49 predominantly, college or better educated, middle class incomes or better, and generally single); which advertisers are obsessive in their efforts to gain attention with. Not to mention that home ownership for African Americans is up 32% since 1990, and that the buying power of African Americans in just 3 states (New York, Texas, and Georgia) equals the money spent by the Government on AIG for fear of a complete collapse of the economy.

Black teens spend more money on clothing, video games, PC software and footwear than the average of the entire nation. In fact it could be argued that without Black teens athletic shoes, cell phones, DVD’s, and fast food industries might all lose their profits. And that says nothing of the fact that magazines like GQ, Entrepreneur, Inc. and others rely on the more than 25% readership that comes from African Americans.

Advertisers have increased spending in Black media by 72%, some 791 million dollars in 2006 alone. The automotive (GM leads), communications, cosmetics (L’O’real SA leads) industries and others (Dell, Procter & Gamble, Time Warner Inc., PepsiCo) lead in trying to gain Black consumer attention.

I say all this because I realize that for every news media image and story that denigrates or diminishes African Americans, the fact remains that this nation cannot survive without us. Just as was true during the time of Slavery, African Americans are the unsung backbone of the nation. Our buying power is so great that its loss would lead to financial ruin for the entire nation, in a manner that matches and/or exceeds every aspect of the current mortgage/credit crisis.

So this year when you go out to shop (or stay in and online) for your Christmas/holiday gifts, if you are Black, remember this when the guards and employees watch your every move. They need you, and if they could do it they would thank you. Because without us, they would be out of work.

**Several fact were complied from Package Facts and Magazine.org **

Labels: African Americans, AIG, American Slavery, Black consumers, mortgage bailout, TV One, U.S. economy

The Presidential election is now 14 days over, and President Obama has already violated several campaign promises. Can you imagine what things will be like in 2 years? I realize that a multitude of Obama fans are getting rabid over that statement so I will make it clear that this is not an opinion, but factual.

President Obama ran his election campaign on a couple of basic concepts. While most of his promises were very vague it was clear that he promised change, and exit from Iraq, and a new style of politics in Washington D.C. Of course the first item on the list, change, was both abut as vague as you can get, and at the same time the most blitheringly stupid thing to promise since President Bush was not up for re-election.

But when it comes to change it seems that President Obama really meant reliving the past. Like much of the Democratic rhetoric over the election the point was to go backwards in time. Anything that reflected or brought back memories of the Clinton Administration was a positive. Thus he has been very busy in filling positions in his new Administration with ‘old politics’ politicians from the Clinton Administration, plus a few friends from Chicago.

How this is a new way of doing politics is beyond me. Other than perhaps the fact that since Congress is Democrat-led, and thus capable of passing almost any liberal platform it wishes, he will push his agenda forward no matter what Conservative think. Of course that is also entirely partisan, blindly following Party dogma, and violates his pledge to work in a bi-partisan manner. But maybe he meant that bi-partisan as in the Executive and Legislative branches working together. It’s a stretch, which is the closest we can get so far.

President Obama was very clear that he was against fighting in Iraq. He made it absolutely clear that he will retreat from Iraq and bring America’s soldiers home. His plan was for an organized retreat, over several months. This would allow opposition forces plenty of time to gather their strength and bide their time. This plan took hold of the Iraqi government, and is currently being debated in that nation. The deal on the table will force American combat troops out of Iraq just in time for the nomination of the next election cycle.

But what is important there is the word combat. Because the deal in hand will do what President Obama wrongly misinformed the public Senator McCain wanted to do. It will provide America with base(s) for land, sea, and air troops in Iraq for 10 years.

That wouldn’t be a big deal, except that President Obama campaigned to remove all troops from Iraq and not staying in Iraq in any form (until he was embarrassed to admit that was a bad idea). But after correcting his initial plan he campaigned with careful wording to imply he was still going to remove all the troops. And if anyone thinks that President Obama did not help shape, and is currently involved with, this Iraqi proposal they don’t understand international politics – in my opinion.

So new politics are out, as is leaving Iraq. And change was just for anyone too blinded to notice the obvious. But wait, there more.

As a bonus there is the economy. President Obama was elected on this basis more than any other factor according to polls by just about everyone. Because the economy needs help, and President Obama was going to make a change. Even though he could not be bothered to be involved in the discussions of the single largest economic policy act in over 2 generations – the mortgage bailout – without having to be called to discussions like a truant schoolboy.

But this massive issue is one that President Obama promised to be on top of. It was issue number one, alongside a new stimulus plan (cost between $300 and $500 billion in money that doesn’t exist). And how has President Obama reacted for the first goal in his Presidency? He’s avoided it.

President Obama could help calm the markets with an announcement of who he is considering for Treasury Secretary. But he hasn’t. He’s worked on several other positions, none as vital to the nation as who is going to be in charge of some $350 billion from the mortgage bailout, plus at least $25 billion for the auto industry, and who knows what else. And people wonder why the stock market is jumpy.

I have to say that this does not bode well for President Obama. Especially since he is looking to compound his Presidency with multiple problems. That would be VP Biden, and now a potential Secretary of State Hillary Clinton. And it’s Mrs. Clinton that makes me really laugh.

The problem with Hillary Clinton is that the donors to the Clinton organizations are unknown and potentially a deal-breaker. Ties to foreign countries like Saudi Arabia, Qatar, and others look bad. Not to mention favors made to people like Mark Rich. But that is being dealt with as we speak, with a couple hundred of the donors being revealed – and it’s unlikely the major news media will check to connect the dots of donations made and favorable deals happening for the donors.

The funny part is that since Senator Clinton is having such problems getting cleared for Secretary of State, how in the hell was she ok to become President? Well more on the problems of having a viper in your backyard later.

Politicians use polispeak to get elected. It happens all the time. It’s old politics. And President Obama seems to be following that path to the tee. The only questions that remain are what other campaign promises will be broken, and how will it affect America.

Obama lovers can now begin their rants, all of them avoiding the fact that President Obama is breaking from his promises.

Labels: American politics, Iraq, Polispeak, President Barack Obama, Senator Hillary Clinton, U.S. economy

As the 4th quarter moves steadily towards the holidays and businesses across the nation collectively hold their breath, I decided to look forward to 2009. What are some of the things that I see coming economically in the new year?

Dow Jones Index at 7600. Yep that’s a bleak statement. It’s not what anyone is asking for in their wishlist to Santa this year (except a few masochistic short-sellers). This is definitely a lump of coal.

But I will say something that you really aren’t expecting. That’s the upside in my view.

The 4th quarter of 2008 is going to be bad. Very Bad. We all know it. We knew it when before Halloween businesses were already getting their Christmas displays in order. They needed sales that bad. And still do.

Unemployment is up, financial companies are laying off people in the thousands, and the prospect of inflation looms larger by the day. Add to that recipe a Democratic President (a historically bad indicator for the economy) who’s policies – based on his voting records – are extremely left leaning, a Democrat-led Congress, the worst Speaker of the House ever, and you get a big mess.

But there is the fact that over $1.2 trillion has been spent this year to bailout the mortgage and credit crisis. The money has been the worst spent money I have seen since Waterworld was made. And the fact that no one has control over how or where this money is being spent, just means that it is being spent poorly and ineffectively.

So all that is left to look forward to is the thought that the auto makers are now first in line to ask for their own bailout, to be followed by retailers, pharmaceuticals, airlines and probably every other industry in America. And Congress will likely pony up the money for each of them.

But let us not forget that Congress has included the people in their spend at will program. So far a 2nd stimulus plan is being conceived, growing from an initial hidden $50 billion, to $150 to $300, and now is being speculated at $500 billion dollars. Nancy Pelosi doesn’t just screw up, she does it with swings to the bleachers.

Any one of these things would not hurt the stock market that much. And the by-product of severely deflated oil prices would be a boon to business in the mid-term. But it’s all happening at once. Saving on energy doesn’t matter much when you have no sales revenue.

The weakness in the stock market can bee seen in that just before the presidential election, the big institutions watched the polls and sold to get out of the way before President Obama was voted in. His promises to raise taxes, and his historic voting record were not overlooked. The only pause in selling came to allow smaller investors a chance to buy into the market and raise prices for the next wave of selling. My guess is that most of the money is sitting in cash right now, waiting for an opportunity in anything but stocks. At least in the U.S.

This means that New York City will get crushed this year. Bonuses from financials are getting scrutinized and thus being cut across the board. That means less money in the tri-state area, and thus a bad Northeast holiday season. That means the east coast will suffer and the nation as a rippling effect.

I’m sure some believe the polispeak that Wall Street and Main Street are separate – a concept only politicians could come up with. But this is how I see it all playing out.

Holiday sales will be off from last years rate, further pressuring the Dow Jones Index. Unemployment will increase going into the New Year, and inflation will start to rise.

President Obama will get inaugurated and the Dow will drop 500 points. This is not a racial reaction, but a political one. Within a week or so of that date a $300 billion 2nd stimulus plan will be passes raising the market temporarily. Several forward indicators will suggest a negative 4th quarter and 1st quarter 2009. Home sales will drop again – due to fewer loan approvals. Home prices should drop in proportion, with foreclosures increasing.

Oil prices should stabilize at around $65 - $70 per barrel to start the year as speculation and alternative investments will drive the price higher. Gold and precious metals should all increase dramatically in a similar manner to that of 2008. Growth in China will likely stall as well, especially since the boost from the Olympics will have faded.

President Obama will be forced to state that he will not raise corporate taxes, and a smaller increase in capital gains will be proposed. Taxes will increase roughly 3% on all income groups.

HD television service will cause a disruption across the nation and millions realize they need different television set, and will spike retail sales – but this is a false increase in the economy. It will be read as a positive indicator by politicians though.

Several mid-sized financials will fail, blame will go to short-sellers and corporate greed. Increased regulations will be passed that will not address the potential for bad business decisions, and the markets will sell again in fear of a more socialized America. The first rounds of nationalized healthcare will be discussed. The national debt will run higher, the deficit even more so as new spending will have no check from Congress.

Confidence in the U.S. Treasuries will weaken, and several nations will begin to sell in hopes of buying national debt of England and a few isolated nations. There will not be a run on America as this would instantly plunge the world into a depression. But the fear will accelerate pressure on the markets. The Fed will lower interest rates again to counter these fears, and to again increase loan availability. Inflation will start to gain attention in the media.

Unemployment will hit a 20 year high, again raising fears of a depression. And Iran and Russia will take aggressive stances in the world stage. Oil will run on this fear, as will gold. But direct crisis will be averted for the time being.

I expect all of this to happen in the first quarter of 2009. It is my expectation that to some degree every item I mentioned will occur. The importance and effect of each of these items will depend on timing and reaction as they all play off of each other. But the net result will be a 7600 Dow Jones Index, or lower.

I expect that this will be the bottom of the market. Smaller investors will flee the markets, and discussion of Federal intervention to save 401K’s will begin. This will also be seen as socialistic, but the need will outweigh these fears. The market will likely hover in this bottom range for the 2nd Quarter.

I’m not sure what might happen next.

I hope that I am wrong an most of these expectations. I would love to see the market gain confidence and rally in the face of these events. I hope that President Obama can rise to the occasion and lift the economic and personal spirits. But that is yet to be seen.

If I am as correct as I was in 2008, then 60 – 70% of what I have said will occur, though not exactly in my timeframe. Take that as you will.

Labels: Congress, corporate taxes, Dow Jones Index, gold spot prices, mortgage bailout, Nancy Pelosi, New York City, Polispeak, stock market, U.S. economy, Wall Street

For those that were curious about the results of the polls that were on the sites of M V Consulting, Inc. about the presidential election I have the numbers. These polls were on the site for a year, and visitors were able to vote only once each.

The visitors of the M V Consulting, Inc. sites broke down as follows:

28.5% Democrat

53% Republican (not including Michael Vass)

16.3% Independent

And believe it or not 2.2% checked of that they didn’t think their vote matters – which I disagree with

In addition 84.2% stated they were old enough to vote, 81% had voted before 6% were to young prior and 6% just did not vote. 50% had family members in the military and 17% of those were in Iraq. 83% felt their jobs were not secure.

29% believed one candidate was a dead-on choice for them, 64% felt one candidate was 50% or more aligned with their views.

43% felt the next President would affect their daily lives a lot or more, 28% thought the effect would be a little or not at all, and 29% were unsure.

83% follow politics everyday.

The top issues affecting America were ranked from most important to least

Economy
Iraq/Afghanistan
Education
Illegal Immigration
Crime
National healthcare
Foreign Policy
National Defense
Race Relations
Other

Final votes ended up as 64 million votes and 52% overall for President Obama, 56.4 million voters and 46% of overall votes for Senator McCain.

So do you agree with my readers that voted? Do you feel these results reflect the concerns and attitudes of the nation?

Labels: Democratic Party, foreign policy, illegal immigration, Iraq, M V Consulting, national healthcare, political poll, Presidential election race 2008, race in America, Republican Party, U.S. economy

President Obama has won the 2008 election. I am as elated by that news as any African American or minority in America right now. But at the same time I am looking at what the nation said last night.

At 6pm initial exit poll results started to flow and there were several important facts that were provided by the polls, granted that the information was slanted as all exit polls have been shown to be.

While 93% stated that the economy was negative right now, only 47% thought the economy would improve in 2009 and 40% supported the $700 billion bailout package that is still working it’s way into the economy. This bailout may be part of the reason that 73% disapproved of the job the Democrat-led Congress has done. And it may also be part of the reason that 70% predict that taxes will be higher under President Obama.

And that’s the important thing to note. The economy was the single most important issue among those polled. 62% felt the economy was priority #1. It was that thought and the thought that Senator McCain would continue the policies of President Bush (50%) resonated with the masses along with the feeling that President Obama was in touch with them (57%).

Honestly these are dumb reasons.

Several key Democrats presided over the downfall of the mortgage crisis, thus directly requiring a bailout, which had it’s creation in the Democratic policies of President Clinton and Democrats pushing loans to people that did not qualify to receive them. Somehow this escaped the public notice. As did the thought that there is nothing to stop a Democratic President with a liberal agenda and voting record, backed by a Democratic Congress, from creating more bad policies that even more Democrats may ignore in favor of Party unity in a time of an economic downturn.

$1.2 trillion dollars may well look cheap before the next 4 years are up. Especially since President Obama has promised to expand the Government by $837 billion and House Speaker Nancy Pelosi is waiting for the inauguration to present a $300 billion stimulus plan (at least, it may be higher by then based on her comments). That means 2009 may well start with a Congress approved budget, passed without consideration in full, with a stimulus plan that doesn’t work in an economic downturn. That’s another $1.1 trillion and that does not include anything necessary yet. And all of it must be paid by the American public at some point soon.

Still 51% felt that Obama’s policies were just right (obviously they didn’t have a calculator handy), though the polls also showed that 60% felt that Senator John McCain and not President Obama has the experience to traverse things properly.

And for those like Harry Reid that want to say that President Obama was elected as a statement of the people, the polls (which skew Democratic) stated that only 30% of voters picked President Obama because he shared their views. That’s piss poor low. What is more accurate and clear is that voters made a statement about President Bush – whose disapproval was just 2 points better than Congress at 73%. Sadly he wasn’t the one that was up for election so the point is moot.

It was the economy, and the promise of President Obama to provide money to low income Americans even if they don’t file taxes that made the election – which was stated in the poll by the 51% that thought the Government should do more to solve problems. So the more that pundits and politicians alike explained why this plan to offer the equivalent of welfare at the cost of the economy, the more it guaranteed a win for President Obama. For the 81% that feared that their family finances would be hurt by the mortgage crisis/credit crunch, it was like manna.

Don’t get me wrong, millions were voting in this election (in excess of 105 million by the last count I saw). Not all of those that voted agreed with all of the above. But more than enough did to provide President Obama with the win. Also in that group are Americans that voted for Obama based on race – some 47% believing that President Obama would mean an improvement in race relations for the nation. That part I hope is true, both for selfish and national reasons.

But while the electoral vote was huge, and will be the focus of comments by Democrats in justifying their agenda and giddy news media, the popular vote was quite close. For most of the race up until the well after 11:39pm there was only a 3% difference in votes (which was the margin I had previously mentioned I thought would decide the election). This was no landslide victory.

The nation is still as center-right as it was yesterday. But it will be lead by a left of center Government in the Executive, Legislative, and potentially by the end of 4 years Judicial branches. That means higher inflation, higher taxes, Government run healthcare (equal in stature and performance to the way the VA is run), retreat from Iraq and likely Afghanistan, legal abortion at any stage (so effectively an alternative contraceptive), gay marriage, public votes for unions, higher electricity costs, and no nuclear power. Oh I forgot fewer coal plants, higher demand for electricity due to electric car mandates and less supply, more ethanol gluts, and limited if any domestic drilling.

Doubt me if you will but just keep track of these items as the next 4 years go by. In fact I expect the 111th Congress to vote on these 4 items in January or February

2nd stimulus plan
Tax code change for people below $200,000 - $250,000 and corporations and investments
End of secret ballots for unions
Passing the Fairness Doctrine – effectively either limiting free speech that does not express liberal views or glutting media with liberal speech that would not make it without Government intervention

Some may find all the above appealing. But almost half the nation did not, and with reason. Reasons we all may well learn very quickly.

Not to mention the crisis that Vice President Biden promised to occur. And that President Obama would seemingly fail at, again as VP Biden promised.

But I could be wrong. The economy could rebound without help, or inflation and slowdown. The stock market might not sell off another 1000 points by the end of the inauguration in January. Americans might just go right out and spend all the credit they can find this holiday season and Wind energy may become effective in 6 months (much to the benefit of Nancy Pelosi’s stock account). I hope I am wrong.

Because I honestly want the First Black President to be the greatest President ever. I want him to be seen as a strong leader. A world leader that will defend America with force if pushed, with wisdom to improve – or at least stabilize – the economy. A President that lifts the nation such that teen pregnancy and high school dropout rates fall lower. A President that inspires small business start-ups and job creation. And if he can convince China to join us in cleaning the earth, and ensure quality healthcare I’d love it.

Throw in reparations and an apology for slavery and I’d be tickled pink.

But we all know that isn’t going to happen. But we will get change. And I will blog about the positives, negatives, promises kept and broken. And I’m more than willing to eat crow and say I was wrong – especially if the First Black President can sustain history in the manner I described above.

We will see. It all starts in 76 days.

Labels: Congress, mortgage bailout, Nancy Pelosi, President Barack Obama, Presidential election race 2008, race in America, tax policy, U.S. economy

You have to be impressed by the Congressional Democrats. They have balls. Not brains, just balls. Because that is the only way they can make the claims they do about the bailout deal.

In listening to the Democrats, Barney Frank in particular you would think that the Republicans are staging a massive political coup. That the Republicans are the only reason why the bailout deal that was voted on today failed was their votes. That this is all about politics and the upcoming election.

But if you stop listening to the polispeak in Congress and look at the vote numbers and you see another picture.

The vote was 228 – 205 against the deal. That includes 94 Democrats, which could have easily made the difference and passed the deal no matter what the Republicans did. But they chose to go against their Party and Treasury Secretary Paulson, and President Bush.

Why? Because the deal was horrible. Because there is no confidence in the deal. Because the rush to pass the deal makes you wonder what is in it. Like the fact that a previous version included a stipulation that if this bailout actually got any money repaid that money would not go to taxpayers but would fund a Democratic initiative called ACORN (which has federal problems currently).

Or how about the fact that I have yet heard how the public, that will be buying these assets (bad mortgage loans) could or will get the money back. We will spend $10,000 each, out of our pockets, and if this ever makes break-even or profit there has been no discussion how we get that $10,000 back in our pockets directly. And under the current plans you never will. That is not a political problem, that is just a bad deal.

If this were as political as Democrats would like it to be, then this bad deal would have passed, Senator Obama would have the credit for it (or at least Senator McCain would have the blame) and they would use this to win the election. That didn’t happen.

If this were political, Republicans could have voted for this deal claimed it was because of Senator McCain’s influence and used that to win the election. It’s just that simple.

But Senator McCain, the Republicans, and 94 Democrats are not being political. They are doing their jobs. They are trying to structure a deal that works for taxpayers like you and me. They want to answer (I hope) the question of how the money comes back to you and me, if it ever makes money.

If we want to really be political about this, we can ask why Barney Frank and Chris Dodd could not see the impending problem as late as July of this year yet they are the heads of the Banking and Finance Committees in Congress. They were informed by supposedly brilliant minds on the exact status of the problem, and they crafted laws and regulations to control what happened. They also made enormous amounts of money from the very people they were (supposedly) watching.

Look, here is the reality. Senator Obama and McCain are Senators. One of them will be the next President. They are effectively the leaders of their respective Parties. They need to get into this fray (well at least Obama does as McCian is) and do their jobs. They need to forge a deal, stand together and say they endorse the deal. At that point it will have to pass. And to forge the deal they need to answer the question that I feel is most important, how I get my money back.

Everything that is short of this is polispeak. Every moment that Obama avoids this problem, every moment that they don’t answer the key question, every moment we have no deal endangers America and makes our near-term future that more bleak. And no matter how many Democrats blame Republicans, or how many deny their failure to do their jobs, the outcome remains the same.

Labels: Barney Frank, Chris Dodd, Congress, Democratic Party, Presidential election race 2008, Republican Party, Treasury Secretary Paulson, U.S. economy

Recently I mentioned how I felt that having Speaker Nancy Pelosi speak on the first night of the Democratic National Convention was a mistake. I felt it was a massive strike against Senator Obama.

“Speaker Nancy Pelosi may look good to the women that only care about having a woman’s face in a leadership position; but anyone that has followed what the Democrats said in the 2006 mid-term elections may have a different opinion. The 110th Congress is a complete failure. The Democrats have failed to do any of the things they promised in their 2006 campaigns. And Speaker Nancy Pelosi led the charge to stalemate.”

I continue to feel that way, and I believe that strike 2 has just been dealt.

“Which brings us to Madame Speaker’s 2007 financial disclosure form. Schedule III lists “assets and ‘unearned income’” of between $100,001-$250,000 from Clean Energy Fuels Corp. - Public Common Stock.” Clean Energy Fuels Corp. is a natural gas provider founded by T. Boone Pickens.

“She, and other investors, stand to gain a substantial return on their investment if gasoline prices stay high and municipal, state and even the Federal governments start using natural gas as their primary fuel source. If gasoline prices fall? Alternative fuels and the cost to convert fleets over to them becomes less and less attractive.”

CLNE also happens to be the sponsor of Proposition 10, a ballot initiative in Pelosi’s home state of California to dole out a combined $10 billion in state and federal funds for renewable energy incentives. Namely: Natural gas and wind.”

So effectively we see that Nancy Pelosi is in the pocket of alternative energy companies. It’s basically the same claim being made by Pelosi and other Democrats against Republicans. And it’s just as bad as what they say the result is with Republicans.

Speaker Pelosi has walled-off any discussion of domestic drilling for oil. She has refused to allow any votes on the subject. And according to her most recent comments on Larry King she will only consider possibly allowing a vote on domestic drilling IF it also includes alternative energy incentives.

Effectively that means that Speaker Pelosi wants alternative energy to get more money to earn more money for herself. The higher the cost for oil, the better her alternative energy stocks will do. And the American public be damned.

Of course many other Democrats believe in this same style of system as well. Senator Obama wants to increase electricity costs, is against domestic drilling (though he has suggested he might be open to drilling in recent speeches – campaign speeches designed to get him elected), and has stated that higher oil costs is good because it will force people to use less oil. Don’t mind the fact that higher energy costs mean more Americans will lose their homes and businesses, and will force a slow down in the economy that makes unemployment higher.

But look at it from a different point of view. Senator McCain stated at 4:33pm on Aug 13, 2008 in a news conference that creating nuclear energy plants would create 700,000 jobs. McCain is also more in favor of domestic drilling.

If there was a move in the nation to do domestic drilling, building nuclear plants, and alternative energy – and each of these ideas would employ 500,000 Americans – there would be a boost to the economy and a reduction in the cost of oil and energy. Speaker Pelosi would make money on her stocks (though not as much) and so would oil companies, utilities, 401K’s, and the average American (via energy cost savings).

But according to Nancy Pelosi and other Democrats, domestic oil is a bad thing since it means oil prices would drop. Also nuclear energy is opposed as well. That’s 1,000,000 American jobs they don’t want to create, at least. That means that unemployment will go higher since businesses of all sizes will not be able to afford the higher cost.

Of course Nancy Pelosi will make more money though.

So I will return to my original thought. Is having Speaker Pelosi speak at the DNC a positive? Especially since she represents a Democrat-led Congress that not only has done nothing they promised in 2006, but is also actively looking to hurt American families. While lining her own pockets with more money.

Strike 2.

Labels: Congress, Crude oil prices, Democratic National Convention, domestic drilling, energy alternatives, Nancy Pelosi, nuclear energy, Senator Barack Obama, U.S. economy

Looking forward to the April 22 primary in Pennsylvania I found some information that is troubling looking forward. There is no question that without a landslide of votes for Senator Hillary Clinton, in every Primary until the Democratic Convention, there is no way she can win the Democratic nomination without stealing super delegates. A super delegate decision is also sure to enrage Democrats backing either candidate.

And that’s where the rub comes in. Recently various news agencies and polling organizations have begun to ask voters how likely they are to back an opposing candidate that lost the nomination. And there is a massive difference, led by the fact of race.

For all the polispeak and posturing of Democrats and Liberals about supporting minority issues and representing African Americans in particular, the fact is that a significant portion of voters will vote for the White candidate or none at all. If that sounds bigoted, racist, prejudiced and anti-American I agree that it is.

Based on the primaries and caucuses that have occurred to date we can see certain trends and numbers.

Whites that find race important favor Clinton over Obama by 63% to 32%. Even those that said race was not a factor backed Clinton by 11%. Of this group of people 41% said they would only be satisfied if Clinton were the nominee.

Why is this critical? Because

“Pollsters have long expressed doubts about using polls to precisely gauge voters' feelings about the sensitive issue of race, concerned that some people give answers they think are socially acceptable.”

Or in my words, some of those polled are the quiet cowardly racists that try to stab Blacks in the back rather than being upfront and vocal about their small-minded nature.

Who are these people? What are they like?

“In the exit polls, whites saying they considered the candidate's race were likelier to be from the South and rural areas, less educated, lower earning and older. That's consistent with voting so far, in which Obama has done better among whites with more education and higher incomes, especially men.”

So in looking forward, assuming Senator Obama is the candidate the real question is how many Americans will be willing to vote for a Black candidate? It appears that there are more than enough White voters raised and believing in the Jim Crow, segregationist, prejudiced, stereotyped, illogical thoughts about race that was America’s norm until the mid-1980’s. And if you are younger than 40, yes before the mid-80’s there was a real and vastly different view of race. That view has not disappeared, nor changed significantly and the voting preferences abovementioned relate to that.

So while pundits will polispeak about the Iraq war – and how it was wrong that it started which is moot, the economy – where raising taxes is about as intelligent as suing the homeless, illegal aliens – which can’t even be referred to as such even though they have roken the law entering the nation, and many other real issues America must deal with; the real issue will be the one thing Senator Obama has avoided making a primary issue – race.

If Senator Obama is to win or lose the Presidential election due superior plans for the future of America then that is the will of America. But it seems impossible to say that while the question of voter prejudice is not only openly stated, but also hidden. Which leaves me with a thought.

No pundit or politician will address the fact that race relations remains the most critical, dividing, and divisive issue in America – 388 years after the first slave was sold and 143 years after their freedom was acknowledged and protected. There is no polispeak to spin this fact in a positive manner, and no one has the balls to stand up and be counted for really speaking on the issue.

So whether or not Senator Obama wins the Democratic nomination (which he should but could lose through super delegates) or the Presidential election, the problem and its effects will continue to prevent America from being as great as it can be. I have already stated my solutions in terms of reparations, an apology, and honest talk.

Given this, what do you propose? How do you feel? What is the answer?

Labels: Democratic nomination, illegal aliens, Iraq War, Jim Crow, Polispeak, Presidential election race 2008, Reparations for Slavery, Senator Barack Obama, Senator Hillary Clinton, U.S. economy

Over the past 9 days the potential for a Democratic nominee to be identified in the U.S. Presidential race became clearer, crude oil has topped $100 a barrel, China has begun to recover from winter ice storms and started the Lunar Year of the Rat. Each of these items has helped to place upward pressure on the spot price of the precious yellow metal commodity gold. Thus today we are at a point where record profits are being reported by some gold mining stocks, and gold spot prices have breach historic levels.

And I’m not surprised.

I have mentioned,

“As these facts are absorbed by the markets, increased volatility and further upward pressure on gold should continue. It’s likely that the Philadelphia Gold and Silver Index and Amex Gold Bugs Index will reflect this pressure. Several Canadian gold miners are also likely to have a short-term boost as they will have increased sales due to lack of competition.

Perhaps most important will be the timing of all these events. If they are moderately spread out and occur individually I expect that they will not be able to retard the move in gold. Combined or occurring close together the effect will be magnified.”

When I made this statement gold spot prices were above $920, now on February 21st they have reached $948. That’s roughly a 3% increase in 9 days, and a continuation of the trend established at the beginning of this year. And it’s not limited to just gold commodity prices.

Barrick Gold Corp reported a 28 percent gain in fourth-quarter profit, or 61 cents a share, beating the estimate of 14 analysts. Barrick was able to attain this while production in 2007 fell 6.7 percent to 8.06 million ounces.

Given that fact, what would an investor or analyst think when you consider that supply is in the throes of shrinking due to power outages and other factors in South Africa. One example is DRDGold, which dropped production 13% in the 4th quarter, and yet is up 4.4% today.

But the growth is not limited to just these companies.

The TSX material stocks gold sub-sector is up 1.4 percent. That includes the aforementioned Barrick and Goldcorp. Other companies around the world on the rise include Exxaro, AngloGold Ashanti, and many others.

The facts are that China and India need gold. Even in a global slowdown their demand has increased pressure on supply. Recession and inflation fears and a lagging stock market in the United States have not diminished though they are not leading world headlines this moment. Oil prices are foreseeable going to continue higher and place more pressure on world economies, especially if OPEC cuts production rates as expected. And the prospect of a Democratic President in America is generally seen as a negative for the stock market, further spurring a move to gold to hedge investments. I have said,

“All stock markets, all financial markets, move on emotion first. That’s given. And few things are more emotional that 1.25 basis point moves by the Fed in a week. But fundamental facts of the markets always come to fore and correct the emotion. To me, $1000 gold, and higher gold stocks across the world, is as fundamentally sound today as when I discussed it earlier this month and in December of 2007.”

I’m no analyst, nor am I making an advisement. But I do believe that the factors are in place, and the results are like dominoes falling. Unless investor sentiment changes, which actions by Warren Buffett and the IMF have not been able to counter to date, I see nothing to stop this trend.

Now I will go one step better. If supply remains constrained, as we can see is likely, and the U.S. economy has the mild recession now being stated by the Federal Reserve. If oil production is cut, in combination with the recent U.S. refinery accident that has placed pressure on capacity, and Senator Barack Obama becomes the Democratic nominee for the President of the United States. If all those actions occur, which seem 80% probable to me at this time, then I believe that gold spot prices in excess of $1125 are possible by the end of this year. Commensurate with this move should be gains among the gold mining stocks across the world.

Labels: AngloGold Ashanti, Barrick Gold Corp, China, DRDGold, Federal Reserve, gold spot prices, Goldcorp, OPEC, Senator Barack Obama, stock market, U.S. economy, Warren Buffett

What a day yesterday was. 300 off the Dow Jones Index, an attempt by a couple of unions to change the course of the Nevada Caucus and Bob Johnson apologizes to Senator Barack Obama. What could possibly happen next?

Well the financial news is something that I expect every Presidential candidate to comment on. There will be more calls for rebates from Democrats, and Republicans will try to promise to keep the tax cuts put in place by President Bush. None of this will actually have any affect on the markets, because only one of them will have any voice on the matter, but that will happen in 2009. That’s a whole year of pain and actions by the Fed and our current President to try to sway the downfall.

As I’ve stated previously, this is neither a surprise to me, nor is there a quick fix that will resolve it. All the hoopla that the various candidates are sure to spin is just an attempt to get panicky voters to choose them.

I restate what I said previously about the ‘stimulus packages’ that have been mentioned to date.

“An example is say you own a home. You are behind on the heating bill, because of the huge increase in oil prices. You spend the money on the heating bill bringing you even, until next month when you have another high bill to pay. That rebate was a waste.”

Plus several of the leading candidates of both parties have all flipped their positions. Democrats that hated the tax cuts and called them ineffective for months are now introducing their own plans to boost the economy. And Republicans that disliked the tax cuts are now in favor of them.

But I’m sure you will hear a lot more about specific plans before Monday arrives.

Just remember this, no matter what plan is announced oil is still nearly at all-time high levels, many mortgages are still failing and/or at risk of failing – and not all of them are sub-prime. Food prices are increasing as ethanol production is diverting corn and wheat to this less efficient alternative fuel source and with recent laws mandating increased usage on a national level we can expect even higher prices. The financial sector is not done writing-off their losses for making the bad loans, and more money will be coming from overseas to prop them up.

Net net, there is no quick fix and any candidate who wins will need to realize they will be walking into a mess. I would suggest you don’t look at who has the best ‘sounds great’ plan, but who can deal with multiple issues best.

Because the fact that attention is now turning to the economy, which has long been a issue of importance among citizens according to my polls, does not remove the importance of all the other issues America faces. Our next President must deal with a difficult economy, illegal aliens, a war in Iraq and Afghanistan, and keeping the nation safe against insane fanatics that want us dead because we exist.

The pundits and candidates may like to address only one popular poll issue but America is more than just one thing. We need to pick the best person for every issue in America, and those that we are not expecting.

You get one vote, make it count.

Labels: aliens, democrat, Dow Jones Index, financial news, Iraq War, Nevada Caucus, President Bush, Republiocan, Senator Barack Obama, U.S. economy