Van Santos

As pointed out yesterday, the Presidential BS train for General Motors is on a roll. Let’s break it down:

WASHINGTON -(Dow Jones)- President Barack Obama said Monday that General Motors Corp.’s (GM) restructuring plan provides it an opportunity to emerge quickly from bankruptcy as a stronger company, but warned that fixing the troubled auto maker will take a “painful toll” on many Americans.

Me: What about the idea of capitalism? Why should the company even survive?

“Working with my auto task force, GM and its stakeholders have produced a viable, achievable plan that will give this iconic American company a chance to rise again,” Obama said in remarks at the White House.

Me: But what about the fact that this is due to years of mismanagement? How is screwing the debt holders, the investors, going to do anything to help? What about the fact that GM makes products that no one wants?

“I will not pretend the hard times are over,” he added. “Difficult days lie ahead. More jobs will be lost. More plants will close. More dealerships will shut their doors, and so will many parts suppliers.“

Me: Hey, suppliers - get ready for bankruptcy and liquidation as you are not getting a bailout.

The government will inject another $30 billion into GM to help it get through the bankruptcy process, an investment that will pump the government’s ownership position in the company to 60%. Obama repeated that the government is a ” reluctant shareholder” with no interest in running the company’s day-to-day operations.

Me: So the public will have pumped 50 billion into the company for what? If they have no interest in running the day to day why are the dictating what dealerships stay open, what models should survive and talking about price caps?

Obama defended government loans to GM and Chrysler as necessary to stave off a collapse that would have been “devastating” for the U.S. economy.

Me: Bull! The stock market knew GM was bankrupt months ago and reacted in kind. The economy seems to have already factored in the collapse (cause that is what this is). The suppliers are going to get screwed and the initial impact has already been felt.

“Understand we’re making these investments not because I want to spend the American people’s tax dollars, but because I want to protect them,” Obama said.

Me: Protect the tax dollar by not SPENDING the tax dollar, let business sort the problems out on its own.

U.S. Chamber of Commerce President Thomas Donohue said his group is concerned that GM’s new owners in Washington could put politics ahead of sound business decisions.

Me: This is about Union votes, plain and simple.

In addition to the U.S. government’s 60% stake, Canada and Ontario will own a 12% position in GM. The remaining shares will go to the United Auto Workers and bondholders.

Me: And current debt holders get nothing except about 1/10 of what they should be getting (with the option to BUY more of the new company) If the U.S. owns 60%, when will I be getting my dividend check? Where do I sign up to attend the shareholder meetings?

Obama said none of GM’s stakeholders are receiving special treatment, saying that the United Auto Workers is making “painful sacrifices, on top of all that they’ve already done.”

Me: You are joking, right?

He said unsecured bondholders, who agreed to swap $27 billion in debt for up to 25% of GM’s equity, will recover “substantially more” than they would have without government help or if the company had been liquidated.

Me: Pure speculation with no evidence to support said claim.

“I instructed my auto task force to treat all of GM’s stakeholders fairly and to ensure that this restructuring was carried out in a way that was consistent with past precedent. And it was,” Obama said.

If he means “creating a liability for tax payers” then “carried out in a way that was consistent with past precedent” is correct. Oh, and what is that “Viable” plan for GM’s success?  Is it to give every taxpayer 40K to run out and buy a GM car?  You cannot force people to buy something they don’t want.

Seriously - the government should have no role in this.

Before I start, I want to establish one thing – If a contract was broken on the part of Carrie Prejean, yes, the crown should be taken away from her. Trump determined that this was not the case.

Trump regarding Prejean’s comments and views on gay marriage:

“If she were a very nice looking young woman, if she were an average woman, if she were an average man, if she were a great looking man, it wouldn’t have mattered, nobody would have cared because this subject has been discussed by everybody from politicians, presidents, everybody. If Carrie weren’t so beautiful, this would never have come,” said Trump. “Carrie is totally beautiful, and her answer, because of that, took on greater importance. Unfortunately, that’s the way the press works. You should be ashamed of yourselves.”

Trump also defended the answer Prejean gave at the April 19 Miss USA pageant. She was asked her view of marriage by blogger Perez Hilton. Prejean said she believes marriage is between a man and a woman.

“It’s the same answer the president of the United States gave,” Trump said. “It’s the same answer many people gave. She gave an honorable answer. She gave an answer from her heart, and I think for that she has to be commended.”

Look past the beauty comments and you’ll see Trump is right – it IS the same answer that the President of the United States gave. Frankly, if the answer was such a political hotcake, and if there was ever a person to go after for making such a comment would be the President, wouldn’t it?

Oh, no, that’s right… the media doesn’t go after people they favor.

Bottom line - All along I’ve maintained that the attention Carrie Prejean has received was based on her views on gay marriage and nothing to do with semi-nude photos. The media/people with agendas were making attacks while hiding behind guise of “freedom of speech” in order to limit Prejean’s freedom of speech. Yes, Prejean is a public figure and is open to the attention that comes with such a status, but there is questioning what one has and then there is attacking…

I asked it before and I will ask it again - Do we want to let a segment of the population rip others apart simply because they do not agree with what was said? If what someone says isn’t criminal speech, why do we, the general public, allow such behavior to take place?

While I do not support Prejean’s views, the manner in which the press acted, in my view,  is deplorable.

All I can say is “WOW!”

The inauguration was highly impressive on a number of levels.  On a very basic level, watching the ceremony unfold, with barely a glitch, in such perfect manner was very impressive.  Take into account the history that was unfolding, add in the sea of humanity, and you have the perfect recipe for a modern day drama. 

I was quite impressed with the class President Obama showed during todays events.  While our nation faces a number of uphill battles, he did not place blame with any one specific person or political party.  He did move away from the political attacks in hopes of bringing the country together and, I believe, in a number of ways he did.  While I found his overall message to be less positive – and more realistic – than I had expected, he provided a message that resonated with the masses in general.

I do have a major problem; however, with something that took place today.  The crowd was booing when VP Cheney and President Bush were introduced (and, yes, they were still the VP and President at the time).  If you have a problem with the former VP and President I fully support you and your views, but you simply do not boo.  This isn’t a free speech issue, it’s a respect issue – respect for the Office of the President – not necessarily the person.  You respect the position. When you disrespect the Office, you are disrespecting the nation, and it only shows the ignorance that still is within our society today.  

Again, best of luck President Obama.  You have a huge task in front of you.  

Stock Market

At the beginning of the year, all of Twenty days ago, I was concerned about how quickly the stock market was rising .  The DOW almost reached 9100, and it was acting as if no recession was gripping our economy. Bad news would come out, the DOW would go up.  Good news would come out, the DOW would go up even faster.  The market was enthusiastic for no real reason, and now it has a huge hangover.  Today the DOW dropped 332 points, closing below 8000 for the first time in 2009.  

Yes, the news looks scary once again.  The survival of US banks are in question. Will Bank of America survive?  How long will it be before The Royal Bank of Scotland will be fully nationalized? What company will go bankrupt next?  Look past the obvious bad news and you can see good news.  REALLY good news, actually.

Take a look…

IBM posted a profit of $3.28 for the quarter - .$25 higher than expected.  Not only that, IBM expects to make $9.20 per share for the 2009 fiscal year, up $.45 from what was previously forecast.  Johnson and Johnson posted quarterly profits 14% higher, though they expect 2009 figures to be flat.  CSX – the rail transportation company – posted a profit of $.90 per share, a whole penny less than expected. 

The earning are there and better than expected from some of the economic bellwethers.  I’m not saying the economy isn’t in the crapper, nor am I saying everything will be fine tomorrow, but I do believe that the market has swung to low too fast.  

Essentially, I think the stock market is way oversold and is trading on emotion, not on the reality of the current situation.

Pilates, I have a new found respect for you

Today was the first day of my workout routine and Pilates was on the docket.  I doubted the effectiveness of a Pilates workout… until today.  For a 17 minute workout I felt the “burn”, as it were, and I was sweating up a storm.  

Seriously, I was very surprised and I cannot wait for the next workout… oh, and I’m down to 162.5 pounds, down 6 pounds in about two weeks.  There is no target weight I have in mind, I simply am taking better care of myself and it seems to be working.

Erasure Pop Remixed!

I had the chance to listen to a promo copy of Erasure’s “Pop Remixed!” and I can officially say that I am disappointed.  Really, not trying to sound negative or unsupportive, but the remixes are really…   thin… weak… uninspiring.  

Here is a quick breakdown.

Always - The Manhattan Clique remix doesn’t embody any of the original – outside of the vocals, nor does it do the song justice.  I’ve never understood the fascination Erasure has with Manhattan Clique as their work never seems impressive.

Drama!  - Really, you would think that Andy Bell would honor his own song in little better than this.

A Little Respect – Hello bad late 90’s Euro Trance music

Fingers and Thumbs – The full remix is long and, at times, seemingly pointless. Worse yet, the remix uses a vocoder on Andy’s voice…  The edit version is OK, but nothing impressive.

There was such potential here but my fears, I believe, have been realized…. 

Until next time, stay (fill in the blank).

Tomorrow Barack Obama will be sworn in as the 44th President of the United States and has a daunting task facing him come 12:01 PM. He steps into office with an economy that is deep in recession, unemployment rising on a seemingly weekly basis, foreign conflict continually erupting and a Democratic party that seems to be at odds with him over several issues. Still, at this point the man can do no wrong.

Obama’s pick to be treasure secretary, Timothy Geithner, forgot to pay income taxes for 2003 and 2004 even though he signed an employment agreement saying he would do so. Bill Richardson, his nominee for Commerce Secretary, had to withdraw his name from consideration because of a Grand Jury investigation. The Obama team was well aware of the investigation, so why even pick him? Or take Rahm Emmanuel, the incoming White House chief of staff, who has already been linked to the Rod Blagojevich scandal. Camp Obama won’t even explain the level of detail that Emmanuel did/did not talk to Blagojevich.

Why hasn’t the press, or the public, demanded answers from the incoming president? Why hasn’t the press jumped all over Geithner for not paying taxes? How can someone who forgot to pay their taxes be trusted to the the Treasury Secretary? Why hasn’t anyone truly pointed out the inconsistencies from Camp Obama on the Blagojevich scandal?

It’s all about hope….

The general public has hope that Barack Obama can take on the financial crisis the world is facing. People believe that Obama can “clean up” the image the United States in the eyes of the world. The public hopes he can fix the situation in Iraq, and the nation hopes that Barack Obama will move away from the politics of scandal, leading the nation on a new path of leadership.

It’s funny, however, that the very actions the nation is enraged over - the deception, and the dirty politics of the current administration – are already taking place but no one seems to care. People are willing to overlook the “little” things simply because they have hope for the future with Obama. Even if we give Obama a pass on his missteps now at what point do we stop compromising our beliefs in what is right for the potential of what could be? If a year from now the economy is in worse condition, will we be willing to look past the potential scandals?

While Barack may do no wrong in the eyes of the public (for now), how will the stock market react? Will the market be awaiting a new era with baited breath, like the rest of the nation, or will the realities of our current economic situation triumph? It will come down to the tone Obama sets. The market needs something to hold onto, some hope that the government has a plan to address the ills of the nation.

But does he? That is what the market will want to know, and they will want to know very quickly. Also, if the market continues to trend lower, does that indicate there is little faith in what Obama plans to do?

At roughly Noon Eastern, Obama will be sworn in, and I’ll be watching, but his polish my wear off very quickly if he do not live up to the standard he has set.

I wish him the best as he is facing a huge task.

Dear god, please don’t let it start like this.  That was my initial reaction when I found out the news about Blagojevich. 

Quick recap - Yesterday, Illinois Governor Rod Blagojevich was arrested by Federal Agents for:

Blagojevich put a ‘for sale’ sign on the naming of a United States senator; involved himself personally in pay-to-play schemes with the urgency of a salesman meeting his annual sales target; and corruptly used his office in an effort to trample editorial voices of criticism.”  U.S. Attorney Patrick Fitzgerald

 Almost immediately Obama came out and said the following:

“I had no contact with the governor or his office and so I was not aware of what was happening, ” Obama told reporters today in Chicago. “It’s a sad day for Illinois. Beyond that, I don’t think it’s appropriate to comment.”

U.S. Attorney Patrick Fitzgerald is not implying there is a connected between president elect Obama and Blagojevich. There is, however, a conflict between what Obama said yesterday about having no connection with Blagojevich and naming the next Senator.

Look at what David Axelrod, Obama political consultant, previously stated:

Axelrod also came out yesterday saying he previously misspoke and that Obama/Blagojevich had no discussion regarding the open Senate seat.

With all the other topics facing the nation, I hope the media does not make a scandal out of what appears to be nothing. More harm than good would come out of such a situation. If Obama did break the law the, yes, he needs to be held accountable but I would NOT want to see such a situation…

For the last 10 years I have been an active investor in the stock and options markets. During my time I’ve seen three significant downturns (2000, 2002 and 2008), and if there is one thing investing taught me it comes down to this – uncertainty creates fear. If Wall Street doesn’t understand where the market is headed stock indices tend to react with major volatility.

The idea that uncertainty creates fear isn’t solely confined to the financial markets; I believe this is a normal human reaction. Think about it… if an individual is uncertain about what may happen they begin to protect themselves today because they are unsure if they will be able to do so tomorrow.

Take corporate America for example…

Here we have MegoCorp, a Fortune 10 company. It turns out, due to economic conditions, MegoCorp will miss profit numbers by 10% and management is in a panic. As of a result of the confusion, different members of the senior executive team are not speaking with the same message (uncertainty) and a rumor begins – layoffs are coming. Now middle management begins to take action to “protect” their turf (fear).

Cross-divisional projects are hastily cut to save the budget of one area without giving thought to the impact of another division. Different teams begin holding information from each other due to the misguided belief they are creating a competitive advantage for their own area, and before you know it morale in MegoCorp has hit an all time low. Not only is the business now in danger, workforce productivity has dropped, which will only deepen the misfortunes the company is facing….

The MegoCorp example happens all the time, and cases exist when companies never regain their former glory after such events, but with the understanding that uncertainty creates fear, when I hear mixed messages, I begin to take notice.

Now read the following passages from a TimeOnline article “Barack Obama is warned to beware of a ‘huge threat’ from al-QaedaSecurity. Officials fear a ‘spectacular’ during the transition period”

Passage one

General Michael Hayden, director of the CIA, this week acknowledged that there were dangers during a presidential transition when new officials were coming in and getting accustomed to the challenges. But he added that no “real or artificial spike” in intercepted transmissions from terror suspects had been detected.

Passage two

Lord West of Spithead, the Home Office Security Minister, spoke recently of a “huge threat”, saying: “There is another great plot building up again and we are monitoring this.”

Passage Three

Intelligence chiefs on both sides of the Atlantic have indicated that such warnings refer more to a general sense of foreboding than fear of an imminent or specific plan.

Passage Four

“As far as we know there is nothing from the intelligence world to indicate that anything has changed dramatically in recent months to put us on alert for an attack at the moment,” a source said. The present threat level is “severe”, which is the second-highest alert status. But a senior counterterrorism official suggested last month that this should be regarded as “the severe end of severe”.

So, which is it?

Are government officials in the UK and US simply saying it’s business as usual, just be aware that anything can happen, or is there “another great plot building up again and we are monitoring this.”

Again, mixed messages are a good way of creating uncertainty, and that is exactly what security officials in the US and UK are doing. In times filled with enough fear as it is, how will such messages be interpreted by the general public and what will the collective impact be?

I’m tired of the uncertainty and fear.

This is John McCain at this best: John McCain at the Al Smith Dinner (part one / part two).  

Make sure you watch both.

What I want to know is where was this man during the rest of the election?  This is who the public needs to see….

John McCain ran a poor campaign, plain and simple.  Many pundits feel McCain’s efforts were so poor the Bob Dole campaign looked good in comparison.  There was hope for Republicans when Sarah Palin joined the ticket but the sudden rock star status turned negative quickly as the press began to hammer her abilities and credentials.  After the Republican convention McCain got a bump in number, overtaking Obama for roughly a week, and then the reality of the financial crisis set in.  Today, Obama leads McCain by 7 to 9 points.

The party is over, and the McCain camp knows it.  Word came out today that the McCain campaign will be discontinuing ads / campaigning in the state of Michigan – a battleground state.  If McCain had a chance, would he be pulling back the troops?

Unless there is a drastic change of events, come election day, I suspect Obama will be winning by a wide margin.

There was some concern that the bill was not going to pass the House today and, sure enough, it did not. The Bush Administration, Secretary Paulson, Chairman Bernanke and senior Democratic leadership all supported the bill but the majority of Republicans did not. As a result, the bill appears to be dead in the water.

The DOW was down roughly 700 points after the bill was defeated but this bill is not about the Stock Market, it’s about the credit markets. This bill was designed, fundamentally, to help open up the credit markets. If one looks as at the current Government Bond rates the 3 month yield is at less than one percent - that is to say there is NO MONEY AVAILABLE.

This crisis is about credit, plain and simple. Without credit business cannot spend and growth will stall - if not decrease. Personal credit will dry up and households will not be able to make large purchases such as cars, washers and home improvements. Students may not be able to get loans for college…. and it can go on and on.

What I am not seeing here is leadership on the Republican House side. Where are the leaders making their case as to why they are not passing the bill and what the course of action is? Where is the Republican House leadership and why can they not deliver the votes they need?

For the very, very first time I am truly worried about the financial situation in the United States.

UPDATE: Voting Record

Care to see the AYES/NOES on the bill, you can check it out here.

UPDATE 2

You have to be kidding me - Republican Leadership is blaming Speaker Pelosi for being bipartisan as to why the bill failed. Supposedly she was too negative.

Yes, she hammered the Bush Administration - and I do not agree with what she had stated - but how petty is that if that is truly the case.

Here is the speech (in RealMedia format)

Here is another version - flash player based

So the general feeling is Republicans did not vote due to the fact that she was hammering the current administration. Again, I don’t agree with what she has stated but this is a time to put politics aside and get the deal done.

UPDATE 3

John McCain is shooting back at Barack Obama and Nancy Pelosi. Both sides, no matter what is said, need to wake up.

UPDATE 4

To play politics for a second - the Democrats have the majority in the House of Representatives and could pass the Bill on their own if they truly wanted to.  If that is the case, how come this failed because of the Republicans?

As the United States quickly moves toward the Presidential Elections many people are waiting for an “October Surprise” – an event that will drastically change the election in favor of one candidate.  The major event influencing the race today is the financial bailout currently working its way through Congress. Without a doubt the economic turmoil has favored Barack Obama, showing his lead in the polls growing as the uncertainty continues to grow, but will there be another event to swing the momentum in favor of McCain?

Maybe an Israeli attack on Iran?

Earlier in the year Israel apparently asked the United States for permission to attack Iranian nuclear facilities but was denied by the Bush administration.  As Iran progresses with the nuclear program Israel feels, more and more, their very existence is threatened.  As a result, the Israeli government will do what they feel is best for their safety – attack Iran.

Will they do so before the election?  Is so, will this be the “October Surprise” that swings the favor to McCain or will the US public move even closer to Obama?