Yet another busy day leads to be missing out on the events of the world, let us jump in on a few things that came out today..

Treasure thinks Congress will raise the U.S. Debt Ceiling

Just stop!  Really.

The debt levels in the United States are growing to the point where they will become unsupportable by the Government.  Literally.  The CBO has already reported that, in a few short years (8-ish) the Government may be in a position where paying interest on the debt outstanding will be impossible.

Translation – the country will be bankrupt.

Someone needs to remind Geithner (and Congress) why the debt ceiling is in place.

One more thought on Swine Flu and the Ukraine

Yesterday I had written about the Ukrainian Swine Flu response – it seemed a bit drastic to me for roughly 4% of the population. What I had thought about but didn’t express was, due to the economic conditions of the country,  the Ukraine doesn’t have necessarily have the technology, education and/or to treat and react to an unknown outbreak let alone the swine flu.

Thanks for taking me to task on that.

And this is sad – U.S. Army Suicides reach a new high

The aftermath of the Vietnam war wasn’t the political change, it was the thousands of troops that ended up with untreated mental illness and substance abuse issues.  After putting their lives on the line for a war that, in a number of cases, they did not believe in their government simply left them to fight for themselves when returning to the ‘real world’.

When I see that the Army Suicide rate is higher than the general population I have to wonder if the government is not providing the support the troops deserve – regardless of the active status of the person.

Really, just call it the Titanic

This is one of those stories you read and simply say – “Oh, you know, this isn’t going to end well.”

The largest cruise ship in the world, the 16-deck Oasis of the Seas, found a port of call  in Ft. Lauderdale today.  I know we live in a world of excess but, really, this ship is 40% larger than any other ship on the high seas today.

While I haven’t heard anyone say the ship is unsinkable, with a capacity for 6,300 passengers and 2,100 crew this is almost like a bad made for TV moving waiting to happen.

First India, now NASA

In case you missed it, NASA has confirmed they have found large amounts of water beneath the Moon’s surface.  The first report issued by the Indian space agency stated water was “locked in the soil” and would come and go during the course of a day.  It is interesting to see NASA specifically say beneath…

Without a doubt life is out there, I’m just waiting for the day when NASA (or another space agency) finds life off earth.  I’m not saying aliens, just the very basic definition of life.

It is important to point out this not law, but parts may be taken and included into what may potentially become U.S health care reform. Regardless – holy god does this piss me off.

Today, Ranking Member of the House Ways and Means Committee Dave Camp (R-MI) released a letter from the non-partisan Joint Committee on Taxation (JCT) confirming that the failure to comply with the individual mandate to buy health insurance contained in the Pelosi health care bill (H.R. 3962, as amended) could land people in jail.  The JCT letter  makes clear that Americans who do not maintain “acceptable health insurance coverage” and who choose not to pay the bill’s new individual mandate tax (generally 2.5% of income), are subject to numerous civil and criminal penalties, including criminal fines of up to $250,000 and imprisonment of up to five years.

The above is not someone playing politics with information. It comes directly from a non-partisan committee on all things regarding federal taxation.

Now why does this piss me off? Three reasons.

To begin we need to look at what President Obama said several months ago while addressing a Joint Session of Congress saying:

Now, most of these costs will be paid for with money already being spent — but spent badly — in the existing health care system. The plan will not add to our deficit. The middle class will realize greater security, not higher taxes. And if we are able to slow the growth of health care costs by just one-tenth of 1 percent each year — one-tenth of 1 percent — it will actually reduce the deficit by $4 trillion over the long term.

If the government is imposting a financial charge upon citizens is not considered a tax, I no longer know what the definition of tax is. How politicians can say the middle class will not feel higher taxes yet they are forcing people to pay for something they may not want is beyond me.

Which comes to the second issue that bothers me. There is not a health care crisis in the United States, there is a health care cost crisis and any law that is passed would not be health care reform but health care insurance reform. If the government was to address the true issue – cost – they would be addressing fraud, waste and tort reform.  They would be addressing the cost issues head on, not trying to divert the publics attention.

Remember, why is it people cannot get insurance?  The cost is too high.  Why is the cost too high? Because medical care costs are almost prohibitive.

Finally, the government should not be telling people what they must or must or must not buy – be it health insurance, be it what kind of car someone drives or be it the food they eat. What the politicians are not saying is WHY they are forcing you to buy health insurance.

Without having the mass population buying insurance, or paying fines, there is little to no way for the government to pay for health insurance. The Government must TAX everyone in order to the plan to be even semi-self sufficient.

Health Care Reform is needed, the cost needs to be addressed, but what is taking place now isn’t trying to fix the issue.  This is all a sham. That is why I’m pissed me off.

I know nothing about the climate-change bill that just passed the house this past Friday. Life in general kept my focus on other events, so I have absolutely no working knowledge – what it hopes to accomplish, what taxes may be included or how the bill may impact the “everyday” person – all I know this this: the manner in which the bill was passed is akin to strong arming an unwilling participant into taking some action they oppose.

But didn’t the bill narrowly pass, 219 to 212, so how can that be “strong arming”?

While the political process has always included last second maneuvers or grandstanding aimed at obtaining a desired outcome, say a large amount of pork barrel spending included countless pages of seemingly mundane text, the climate change legislation that just passed takes this to a new level.  At roughly 3AM Energy and Commerce Chairman Henry Waxman tacked on another 300 pages of to a bill that was already 1,200 pages in length. Thankfully Minority leader John Boehner exposed exactly what was taking place and the amendment was dropped.

It’s obvious politicians only read the bullet points to said bills, they don’t pay attention to what every single detail.  With the volume of law that is being pushed these days, I can understand where that would be the case, however; adding 300 pages of unread, un-vetted, text to an already monster bill is not only political strong arming, it’s disingenuous and is in no way helping the general public in the United States as such acts remove the ability for people to contact their representatives in order to voice their feelings.

There was a time when politicians actually worked for the best of the nation.  The special interest groups and big business did not have the control we are currently witnessing. But that was supposed to change.  Recently, promises were also made by politicians that bills would be viewable for 5 days in an attempt to create a new era of openness within the government, a level of transparency and accountability that would usher in a new era of government, and provide constituents the understanding of what is taking place.

Obviously, on a majority, that is not the case any longer.

As with most thing these days, this isn’t about Republican or Democrats, no, this is about power.  It’s about checks and balances.  It’s about the blatant disregard of the wishes of the many for the special interests of the few.  In the end, this isn’t about the Energy Bill, this is about how politics are practiced in the United States. We will continue to witness politicians taking advantage of the system in order to move their agenda forward and as the balance of power between the two political parties swings in favor of one over the other, the questionable activities will only become more extreme leaving the American public at the whim of those in power.

Marijuana

I have no vested interest in the topic of the legalization of drugs. I’m not a user, so I have no dreams of trying to make the world see that pot should be legal. I’ve never once smoked a joint in my life, let alone been drunk. All that said, I believe it should be legal.

Why?

There is no way that we, a free society, can say that we are truly free without being able to do what we want with our bodies.  The government should have no ability to say what we can and cannot do with our lives as long as we do not impact the life, liberty or safety of another individual(s).

What is one of the largest connectors of people during social gatherings?  Alcohol. I’m sorry to say that no matter what anyone tries to tell you, the reality is that modern society is a drug society.  The irony is the legal drugs (Alcohol and Tobacco) are considered more harmful, physically, than marijuana when that is very debatable. 

Why is marijuana illegal?  

Racisim and corporate profits.

Did you hear about Congresswoman Maxine Waters?  

In her heroic efforts to provide the much needed bailout funds to the banking industry, she forgot to mention her connection to a bank she was helping to provide bailout funds to:

Top federal regulators say they were taken aback when they learned that a California congresswoman who helped set up a meeting with bankers last year had family financial ties to a bank whose chief executive asked them for up to $50 million in special bailout funds.

Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Waters’s husband, Sidney Williams, had served on the bank’s board until early last year and has owned at least $250,000 of its stock. 

But Congresswoman Waters doesn’t seem to see it that way, and all of a sudden it’s about a “minorities”:

And Friday morning, Waters blasted back: “Recent press reports have raised questions about my advocacy on behalf of minority banks. Ultimately, however, these articles only revealed one thing: I am indeed an advocate for minority banks. Despite my public and consistent advocacy, news reports suggest that somehow I have acted improperly.”

Let me help you break it down, Ms. Waters – The issue isn’t minority banks, it’s about you and your family potentially benefiting from public funds.  A bank that employed your husband, that you had investments in, has benefited because of your potentially illegal actions and political connections.   

This has nothing to do with race or being a minority, it’s about conflict of interest.

New law in Cook County Illinois says people selling real estate must provide thumb print

I don’t even know where to start on this one…

The new law, which is set to go into effect June 1, 2009, will force anyone selling property in Cook County to provide a thumbprint from their right hand.

“No more so than any law abiding citizen walking down the sidewalk should be fingerprinted; just for selling my house, that’s ridiculous,” said Gerald Cain of Land Acquisitions, Inc.

Ok, I need to go play some Bioshock after hearing that…

For months now, the Fed and the Treasury Secretaries (Paulsen and Geithner) have expressed confidence in the free market. Extreme market conditions call for unprecedented actions by the government, all in the name of propping up the U.S. financial system. What if, however, there is more at work?

Yesterday, the Fed refused to provide information on what financial institutions obtained money. The reasoning? Such information would potentially damage the reputations and/or create a lack of confidence in banks that obtained money.

Fed Refuses to Release Bank Lending Data, Insists on Secrecy

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

If you note, the same article points out:

Fed Chairman Ben S. Bernanke and then Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system.

What changed between September and now? Aside from the economic desperation increasing more than anyone could have expected, not much else. Auditors, economists and government officials all knew the financial institutions were facing insolvency. The financial markets were well aware then, as they are now, the banks were on the brink. As such, it is hard to make the argument that confidence in banking system would be tarnished by releasing information showing who received money.

The damage is done; the horse is out of the barn.

While reassuring to hear the Fed say transparency would be forthcoming, the reality is the Federal Reserve acts independently of Congress and the President. This body has the ability to do whatever they wish, without the need for government approval and have no duty to explain their actions to a governing body.

Maybe the lack of transparency comes from the Federal Reserve deciding who is going to survive the crisis? Maybe the Federal Reserve is taking advantage of the credit crisis in order to reshape the financial system after years of neglect.

I do not wish to sound paranoid, or some crackpot conspiracy theorist, but looking at the whole body of evidence it is clear the Federal Reserve, as well as the Treasury, is withholding information for some unknown reasons. Be it a lack of economic understanding, or something more calculated, it’s clear there is an undercurrent the general public is being left out of.

If the actions of the Federal Reserve are designed to select the survivors of the financial crisis, and not let the market direct such a decision, this would be a clear sign that the idea of capitalism as the world believed it to be was a failure.

First, I love having Monday off.

I have the luxury of working “flex-hours” at my job, which allows me to have an extra day off per week as long as I still work 40 hours during the week.  The one side effect that I never expected was the reduced stress level.  If you find your stress level to be high due to your work schedule, I suggest you investigate a 4 day work week.

Taken

I have a strong desire to see the movie “Taken”.

Originally, I wasn’t sold on the movie simply because it seemed there was a really, really, strong marketing push for the movie.  Usually, that is a sign of a studio trying to dump a junk movie on the market.  Add in the fact that it was released in January, a dumping ground for bad movies, and it seemed like a mix for a bad release.

Over the weekend I did some reading up on the movie and it appears that there is the potential for a good, yet mindless, thriller on our hands. Rottentomatoes.com has this listed at 56% fresh, so I’m still taking a bit of caution, but I’m still looking forward to it.

Oh, and FYI, the movie was originally released in October, 2008, in the UK and finally found its way over to the United States.

Stimulus Bill H.R. – 1

Thanks to the miracle of Opencongress.org I’ve been able to really dig into the Stimulus Bill (HR-1) that passed the house last week.  In no way am I anywhere finished reading the entire Bill, but there are two initial thoughts that I have.

There a number of limitations that follow a distinct protectionism point of view, such as…

None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States.

I am seeing a number of items that I would be hard pressed to believe would help stimulate the national economy, such as.. 

• $1,000,000,000 for periodic censuses and programs 
• $650,000,000 for the digital-to-analog converter box program 
• $400,000,000, for habitat restoration and mitigation activities. (NOAA)

Again, I am not close to finishing the bill but that is a large sum of funding for activities that would have very little impact on the economy at large.  Interestingly, $650,000,000, was set aside for: 

reconstruction, capital improvement, decommissioning, and maintenance of forest roads, bridges and trails; alternative energy technologies, energy efficiency enhancements and deferred maintenance at Federal facilities 

Now, I can see how that would start to pump funding into local and national markets, but I find it interesting that it’s the same exact amount for the digital-to-analog converter box program.  I just don’t see how they can justify those amounts. 

As for the idea of protectionism… while I understand the desire and need to keep the funding within the United States, protectionism during recessions/depression is a very dangerous idea. The United States had a protectionist viewpoint during the Great Depression which only worsened the economic climate due to a decline in global trade.   

It will be interesting to see how the Stimulus Plan plays out this week in the Senate.  Will the politicians in D.C. Get the idea that this bill is padded with activities, while maybe needed, are not intended for “stimulate” the economy as a whole?

Cars, cars and more cars…

I had an observation this weekend that I found, well, intriguing.  As I was out driving around I noticed 7 new cars on the road, as identified by the temporary plates on the cars.  Now I obviously don’t know if they were “new” or “used”, but I wonder if consumers are starting to feel better about about making these “large” purchases.

Ok, I’m off… until tomorrow.

Roughly a month ago the big three went before Congress asking for financial assistance (bailout, loan, pick the term you would like to use) due to a potential collapse in the industry.  Actually, General Motors and Chrysler were the two organizations hurting the most.  Turned out that Ford, the company everyone expected to fall first, was in a better position that anyone had expected.

During Congressional proceedings, and a number of times since, General Motors boldly stated that “Bankruptcy is not an option”.  People scoffed at the arrogance of GM, except a large number of Politicians. Congress continued to push forward with financial assistance, until the air was let out of their balloon – Congress decided that it wasn’t going to happen.

Almost immediately the Bush Administration stated they would use TARP funds in order to prevent the collapse of the Detroit three…. and then nothing happened.  Deafening silence filled the space where there was once near definitive support from the Administration.  No real progress or information became available until today.  Suddenly a “controlled” bankruptcy was an option.

I thought everyone – Administration and automakers – said they would not accept such a situation.  But what exactly is a controlled bankruptcy?  Think about recent government actions – who have they helped?  

A controlled bankruptcy will look something like the AIG bailout. 

If this is the option chosen, I suspect the government will tell the affected automakers what products they can have, what lines need to be sold or closed, and what price structures need to be in place.  Oh, and they will have a majority of their debt wiped away.  Even with that option, members of the auto industry still say Bankruptcy is not an option – structured or otherwise.

Even in the face of some form of help, the industry does not want to change. What?  Yes, they still say bankruptcy is not an option as it will destroy the brand.  What they seem to be missing is that, essentially, their business needs to be completely restructured to achieve a level of competitiveness in the marketplace and have no ability to do so (and maybe no desire).  yet they have no desire to make the necessary changes. 

Tomorrow may very well be an interesting, if not, historic day in the economy.

Surprise, surprise… the “Big Three Bailout” ballooned from $25 Billion to $34 Billion in a matter of weeks, $18 Billion going to General Motors alone.  The remainder will be split between both Ford and Chrysler.

A number of ways I feel as if automotive executives are using fear, preying on the general public’s worry about a “Greater Depression”, when comments like this are made:

“Failing to act now will hurt many American families and undermine our country’s economic recovery, far outweighing the costs related to supporting an industry that touches every district in every state of the nation,” Chrysler said.

“There isn’t a Plan B,” said GM Chief Operating Officer Fritz Henderson. “Absent support, frankly, the company just can’t fund its operations.”

Or what about this…

“We’re on the brink with the U.S. auto manufacturing industry,” Press told The Associated Press in an interview. “If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it’s a huge blow. It could trigger a depression.”

Not only are the executives trying to pander to the emotions of you and I, they are clearly trying to make this a political issue by saying “an industry that touches every district”.  

Really, how many people talk like this?  Do you ever say, “God, the economy is bad.  Every district in the country must be hurting.” 

No, don’t think so.

Let me ask you this.  Why should the American public provide a bailout when the companies cannot run their business?   Ignore the potential impact to the economy, which I do believe would be significant, and strictly look at this from a business perspective.

Sales, year over year, were down 47 percent at Chrysler and a 41 percent decline at General Motors.  It is true that all automakers saw a significant fall in sales, Honda, Toyota, BMW and VW all manage to turn a profit somehow.  There are not begging at the alter of Congress, are they?

We will see political posturing next.  Politicians will say how they don’t like the plan under consideration but that Bankruptcy of one or all three automakers is not an option.  A fuss will be made but the coffers will open, giving the companies more than the revised request of $34 Billion (over the next several months) due to “harder than expected economic conditions” and, in the end, either the U.S. will witness a bankruptcy of one or two manufactures and/or the sale to a competitor based outside of America.

Update: UAW Concessions

This is this first time I’ve seen the UAW talking about giving somthing up to help the industry.  It’s about time someone in the UAW brass wake up to see that without the Big 3 they are gone.

Unless your head was buried in a pile of cocaine, or sand, whatever works for you, you know that the Big three automakers are really hurting these days and that pain really hit the market last week.

As Congress attempted to provide financial aid to the automotive industry some startling financial information became public – Ford has roughly 38 billion dollars on hand, or about three years of funding, where as GM has about 20 Billion, or one year worth, and Chrysler has 11B in the bank but no true estimate on how fast they are burning cash (since they are no longer public they do not need to disclose their financial information).

Rumors of bankruptcy, automotive collapse and a massive waive of unemployment was all over the press. It seemed that GM and Chrysler were about to fall apart overnight. While the misfortunes of Detroit have been documented for some time the rapid unwinding of the credit markets only added to woes of the carmakers. One rumor that received very little press, but actually makes business sense, was that GM was an acquisition target of Chinese carmakers SAIC and Dongfeng.

Little does most of the general U.S. public know but GM owns 35% of the Chinese automotive market share is considered to be a luxury brand! Let me put that in different terms – GM is a successful company in China. As SAIC and Dongfeng are attempting to expand market share in China and the U.S., plus achieve significant economies of scale, an acquisition of GM by a Chinese company only make good business sense.

If a Chinese rival acquired GM, do you think the companies’ workforce would be welcoming of their new overloads? Do you think the pride of individuals who get in the way, or do you think they would be happy for the survival of the “American” giant?

While I have no answer, I find such a scenario to be the ultimate irony for the financial crisis facing the United States today.

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?