Wednesday, March 26, 2008

The Economy and Politics

In the 1980’s the economy was growing strong enough that the average person was starting to interest himself in investments outside his home and savings accounts. Penny Stocks became the rage. Small start-up companies around the country were looking for capital without giving away half ownership in their companies to investment bankers. They found backers in small independent penny stock brokerage firms. These investment brokerage firms underwrote and merged small firms into public corporations with just a few millions capitalization. Everyone hoped the gamble would pay off against long odds. These small mining, manufacturing, drug, brewing companies, etc. would prove to be a big risk for the small investor. Many companies failed, and some stock brokerage firms were guilty of exploiting small investors by putting them into investments that were too risky. Consequently they lost money they couldn’t afford to. Many companies did go on to achieve great success earning their small investors huge returns like, Microsoft, Apple, etc.. These companies were too small originally to attract investment from the large brokerage firms like Merrill Lynch, Bear Stearns, etc.. These big firms do not generally bother with a few million dollar under writings.

Because of a few unscrupulous brokerage firms in the eighties the SEC had more than fifty percent of the small independent firms shut down by implementing a catch-all compliance rule that all investment houses must follow called, “The Suitability Clause” which asks, “Is the investment suitable for the investor?” The suitability clause was and is a government bureaucratic nightmare for all brokerage houses that pretty much closed the door for small companies going public with just a few million dollars capitalization.

In the 1990’s the stock market took off. 401K’s were suddenly making everyone rich share holders in the booming stock market. Stocks for corporations and investors were making money hand over fist and those 401k’s were making everyone look like over night millionaires. Then there was a scandal, and another one, and all of a sudden some people lost money and the stock market balloon burst. Those same retirement account’s were taking a big hit. The SEC catch-all-rule of suitability seemed to come into play again with the government stepping in and throwing a few people in jail and heavy handedly changing accounting rules for corporations and brokerage houses.

Next, in the late 1990’s, to the mid 2000’s, the housing market went crazy. Every year saw five to ten percent growth in housing prices. Everyone that had been renting was now buying. Builders were building like crazy, investment bankers were offering more and more types of loans with more and more creative financing to meet just about every type of credit buyer. Sub prime loans were the rage. Everyone was buying and refinancing a couple of years later at new lower rates. Everyone was suddenly finding equity in their home that just a few years before they had purchased for nothing down. Flipping houses was so popular it even got it’s own TV show.

Creative financing for housing moved up to the big investment bankers who provided money to smaller brokerage firms because the risk reward ratio seemed to attractive too pass up. Then, because of overbuilding, falling prices, and short term sub-prime adjustable rate mortgages of, one, two, and three years started becoming due or rates re-adjusted. Failures began appearing and in a vicious cycle, news of these failures began spreading, housing stocks began to fall, home prices began to fall, lenders began to require better and better credit ratings. Suddenly, there was no new money for mortgages and the housing bubble burst. Who cried the loudest, besides the media? The government. The media and government blamed the speculating investment bankers, the investment bankers blamed the mortgage companies for low lending standards and the mortgage bankers blamed the borrowers for lying about their credit, their ability to pay and not reading their contracts. Wall street and the investment bankers were suddenly conscious of their mortgage portfolios. They didn’t know what percent of their assets were quality assets so they started writing them off. Now they want the government to reimburse them for their losses with tax payer money.

So, because of the overall perceived economic crisis, and for political reasons, the government wants to appear that they are coming to the people’s rescue with a bailout. First to the general public, then next to the investment banking houses. Then as a penalty for causing the embarrassing problem, the government will implement new suitability rules for mortgage borrowers that will be enforced by some new law.

Every time more stringent government suitability rules are implemented it stifles the future economy. After every crisis the government steps in and slaps the capitalist’s hand and further quashes growth in the overall economy. The government has to let the people and corporations be responsible enough for failure. They take the risk, so long as it’s not fraudulent, and they must take the loss when they over speculate.

Many small companies got their start up capital in the eighties by going public until the government pretty much closed the door.

Many workers in the nineties became share holders for the first time in their lives then the Dot Com bubble burst. Investors are now more cautious, but the government not satisfied and not wanting further embarrassment, has imposed accounting rules that make 401k’s more conservative and less attractive for corporations to manage and offer it’s employees.

In the new millennium, ninety four percent of new mortgage holders are paying their mortgages on time. They own houses they never would have been able to buy with out sub-prime lenders. Some sub prime lenders are getting burnt so now they will be more discriminate with loans, but the government plans to step in suggesting we make laws that go back to self-imposed rules-by-lenders that were prevalent in the sixties when you needed twenty per cent down to buy a home.

When corporations and individuals make bad decisions, without breaking the law, it seems to be an excuse for the government to impose new rules. New government rules against creativity kill creative venture capital, the life blood of a healthy growing economy.

What happened to buyer beware and act responsibly?

Wednesday, March 19, 2008

Barack has a chance to make history

Barack has a chance to make history

Barack made and eloquent speech defending his relationship with Reverend Wright but he failed to change the perception that he is not from the same mold as many other black leaders across this country.

He has a chance, a very rare opportunity that only comes along once in a lifetime. That chance will still be there for just a little while longer but not much. This is his moment, in the midst of the hot campaign and while he still has his credibility, he has a chance to change the course of history.

He has the chance to end that deep seated fear that his grandma and many others have harbored since the black power movement of the sixties. Black and white people split in the sixties. Black Panthers, Malcolm X and some Olympic champions had given the black man a new powerful, black is beautiful, feeling, and it was good, initially. It must have been exhilarating, The white man, instead of respecting the black man for this new found inner pride, feared it because this new found pride was the in-your-face kind of pride. Newly emerging black leaders exploited this new black pride by spewing hate and vengeance on (Whitey). Jessie Jackson, Louis Farrakhan, Reverend Wright and many other black leaders old enough to have struggled in the sixties are still exploiting blacks today. They took advantage of this new found black power by using it for self aggrandizement, for power and out of genuine hate.

Martin Luther King went in a different direction, he gained the respect of the vast majority of the public by marching against injustices. He wanted to peacefully bring people together, blacks and whites, all people to share in his dream. He inspired inner pride , like Gandhi, rather than waste his time on fruitless hate. He told people that they were equal and as good as any other, rather than point fingers at whites and blame all the ills of America on the past.

Barack Obama has a unique chance to end race divisions in this country right now, forever, by simply saying, to the effect, 'Race prejudice ends right now, starting with me, a new beginning is right now. The negative past is over, put away, gone, forgotten. Anyone trying to keep it alive is wrong and I will denounce him as should everyone else in their Church, in their home, everywhere. Rev. Wright is wrong in his thinking and his hateful words and needs to repent and see that a new day has dawned, today, now. Jessie Jackson is wrong in perpetuating divisions in America among races and I call for him to join me in denouncing race divisions. There is simply no room in this country for preachers and politicians to spread anymore hate, fear, and blame on their fellow Americans. Complainers of past injustices need to stop whining and move on right now. We must fight injustice where ever we find it but do so it in a civil, peaceful and in and understanding manor. Injustice is everywhere and can be found among all races. Blacks no longer have a special corner on the market’.

Barack needs to say, with deep conviction that he was wrong for not stopping Wright from preaching his hateful sermons years ago, but that he was weak and could not quit the church. America forgives as easily as it forgets. He must say that he realizes now more that ever in this defining moment of his life that negative preaching is counterproductive for blacks and whites and it must stop. Wounds among races will never heal so long as someone is pouring acid in the sore.

If Barack truly wants ‘Change, a New Beginning’ as his campaign slogans continually call for, then he has a unique opportunity to show his presidential leadership skills while campaigning and while he has the nations attention. He has the talent and has shown himself to be a brilliant orator and statesman. He has a chance to make history. He has a chance to turn the negative race issue into a positive.

But maybe Barack does not feel the way I've described at all. Maybe he doesn’t see that this is his defining moment in his life. If he doesn’t see it than he is just another pretender to the throne and he will lose the presidential race. Maybe Rev. Wright was sucessful over the past twenty years, in ingraining in Barack some resentment for whites and in America .

Sunday, March 16, 2008

Tiger, Derek, and Obama

Tiger, Derek, and Obama

Tiger Woods, won another golf tournament today. He is absolutely incredible,and mesmerizing. I watched him play all day yesterday and today, and when he sank that final putt for the win my whole family cheered and declared that what we are watching is legendary. Tiger is someone who comes along in a sport once in a lifetime. In fact, if it weren’t for Tiger I wouldn’t even watch golf.

And I am a die hard Yankee fan. My favorite player is Derek Jeter and has played for ten years on the world stage before millions of his fans. He is a winner, a class act, and he never seems to be controversial, no drugs, no drunken brawls, no nothing. He’s even been questioned about how and available, single, party going guy like him never seems to get in trouble, like many of his peers. He says simply, and repeatedly, "I choose my associates carefully".

It occurred to me that if Tiger and Derek had been attending Barack Obama’s church for the past eighteen years and had Pastor Wright’s hate filled sermons to listen to I would not be watching Tiger this Saturday or Sunday and Derek Jeter would not be my favorite baseball player. I choose carefully who I follow in the sport of baseball and golf. Sports writers would have long ago exposed to the sports world Derek and Tiger's questionable choice in Pastor Wright and his hate filled sermons.

Tiger, Derek and Barack have similar backgrounds. They all have mixed parentage and had to work extra hard, under very difficult, but different circumstances, to get where they are today. They all have had to make choices along the way to further their ambitions and careers. One of the most important choices they made is who they associate with. We know now that Barack made a bad choice in selecting Wright as his mentor and pastor. Barack’s decision making skills are now more than questionable.

Does Barack think anything like Pastor Wright? Why should we not think so? How could he listen to this pastor all these years and not absorb some of this hate thinking himself? Barack has refused to wear the flag pin on his lapel, and he has chosen not put his hand over his heart when the National Anthem is sung. Does that mean something to us? Is that indicative of something? It is to me.

Michele Obama has just recently became proud to be an American. What does that mean? What about her previous forty some odd years? I have been proud to be an American since I was born.

Barack’s pastor says, and I’m now quoting and paraphrasing, ‘God Damn America, God Damn America,’ ‘Whites created HIV to get rid of the black man,’ ‘Chickens came home to roost and that caused 9/11.’ These quotes are just a few of the highlights uttered by this hate filled pastor.

Is Barrack Obama to be given a pass for associating with a hate monger? Should Barack to be viewed in the same light as Governor Spitzer or Michael Vick? Would Tiger and Derek be given a pass? Can you see Obama as our President?
I can’t.

Wednesday, March 12, 2008

Global Alarmism, Al Gore and George Bush

Global warming and world wide terrorism.

Al Gore won a big prize for alarming the world about global warming with some pretty tricky film footage in spite of the overwhelming number of scientists that disagree with him.

George Bush sounded the alarm about Muslim Extremists despite the recent and overwhelming number of people who disagree with him.

Somebody must think we are fools. Is the American public foolish enough to think that a few light bulb changes or a few Prius cars running around will make a difference in the world ? Are emerging consumer economies around the world going to slow their growth to save a few pounds of carbon emissions? Will India, China, Viet Nam, Russia, with South America, and Africa, put Catalytic Converters on cars and join us in putting expensive scrubbers in their smoke stacks? I don’t think so, not for many years to come. I don't think India with it's one billion people know what a muffler is. We use twenty five percent of the worlds fossil fuel, the rest of the world uses seventy five percent and growing at an incredible rate. What chance have we got to save the environment when we are competing with the rest of the world and a bunch of volcano’s. But at least we can keep Los Angeles from turning purple.

How about Europe joining us in the war against radical Muslim terrorists? What’s the reason for their hesitation? Bush claims this scourge of terrorism is a threat to our very freedom. Evidently Europeans don’t think so, or is it that they are used to having us fighting their battles for them? Maybe they just don’t see the battle as necessary. How come England and just a few other countries supported us? Is Bush a Global Alarmist, a fool?

Most sane scientists believe the earth is evolving, as it always has through the ages, from global warming to the ice age and we are somewhere in transition. Ice bergs have been melting and refreezing for thousands of years and one large volcano eruption produces more carbon than all the cars and trucks on earth ever have. So why does Gore and others make what I consider false claims on the changing environment and man being the cause? They make the claims for notoriety and money or maybe they are the fools, rich fools.

What's the real reason Bush and his alarmist notions are ignored and scoffed at by Europe and now half this country? Most people don’t like facing grim realities. Most of us would rather not face problems until they come right to our doorstep. France scoffed at Hitler untill he and his boys marched down the Champs elyseese. Europe has faced terrorism for generations and when 9/11 hit us the reaction from the Europeans was; what’s the big deal? Europe has had it’s 9/11’s as almost a way of life and they accept it as a mater of course. Europe doesn’t go to war over it, they try to handle it as a small civil disturbance and get the police involved. And they make concessions, and concessions. America hasn't and I hope they don't.

America saw 9/11 as a wake up call and we were indignant, angry and wanted to stop future 9/11’s. How radical is that? In most European eyes, very radical.. Bush called on Congress and the UN to respond. He enacted a new Cabinet post, Homeland Security, to co-ordinate all spy service’s activities, he developed the Patriot Act, in other words, he reacted in decisive, positive steps to both protect and prevent, and Congress approved his every move. Rightly or wrongly he acted. Obama says it was wrong and he didn’t vote with the majority in Congress.

Quote:
All that is necessary for the triumph of evil is for good men to do nothing. Edmund Burke.

Next, Bush saw the threat from al Quida extending to supportive countries like Iraq and decided not to wait for a second 9/11, he decided to take preemptive action. He received overwhelming approval from Congress and he acted when all the UN could, or would do is offer another resolution, the fourteenth. Obama says he was against preemption.

Results:
Whether you agree with Gore or Bush’s actions, it's your choice, but remember, there has not been another 9/11 in six years, and the makers of those screwy-type light bulbs are making a hell of a lot of money for somebody. Obama, the all_seeing, all-knowing is capitalizing on isolationist policies.

Wednesday, March 05, 2008

Wishful Thinking

My friend is a pacifist. He hates the killing in Iraq, hates the killing of death row prisoners in jails, and hates killing babies by abortion. He’s a pacifist so life is precious to him. The Commander in Chief is, basically, a killer. So he wants change. Simple really, Obama appeals to that issue.

So the election for my friend is really a one issue election, and Barack Obama offers, possibly, a new paradigm, a change. The economy, the border, health care, are other lesser important issues. Barack offers hope, effective slogans, and little else but wishful thinking for my friend. Barack says he can stop the killing and that he will talk the enemy through their differences with us. He has a dream, and millions are buying into it.

I see Barack and Hillary’s offer of that false hope as deceitful, and a dangerous near-sided selling off of America’s future to get elected. Osama ben Ladin is a dedicated killer, and the Taliban and radical Muslims are dedicated killer-fanatics. My friends thinking ignores reality as do Barack and Hillary's. Their plan will cost more American lives in the future than opposing the forces of world disruption today, only my friend can't see it. He just wants killing to stop. Don't we all.

The old George Bush quote of, “I would rather fight them over there, now, that have to fight them here tomorrow,” reflects good, solid Commander in Chief thinking to my mind.

This war in Iraq issue will be argued right up to Election Day. Hillary or Barack will promise to withdraw all troops immediately and give us hope. McCain will call for patience as Bush does and give us reality and security.

The American public has paid a high price in treasure and lives for this war but the people have not really experienced any pain since 9/11. The kind of pain that normally comes when a nation is at war is deprivation, sacrifice, and death. These are things that have not been with us on a daily basis so most of us don't really relate. Of course, the relatives of the 4000 soldiers slain and the 20,000 injured soldiers who have come home feel the pain more closely than any of us and the overwhelming majority of those soldiers and family feel that America and George Bush is doing the right thing.

If the Taliban, or the radical Muslim fanatics, or Osama ben Laden had been more effective in bringing the war to our door in the last six years then maybe we would be more, sad to say, enthused and supportive of the war, but Bush's war-winning policy's have kept us safe here at home and Americans have become complacent and bored. If we pull out of Iraq the problem will all somehow go away is the hope, but wish full thinking at the poles will not make terrorism go away, but it might elect Hillary or Barack.

I encourage you to forward this web site on to your friends and come back next week for another pointed political column.

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