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I don’t have time to get into all of the reasons that George W. Bush will go down in history as one of the worst Presidents ever, but the Knoxville News Sentinel captured part of it in an editorial today.  His mind boggling deficits.

In case you’ve forgotten, we had a surplus (fake though it may have been do to counting Social Security receipts as general revenue) but overall the federal government took in more money than it spent in 1998, 1999, and 2000.

Bush not only blew the surplus, he’s run the highest deficits in history!  The only President who comes close to being as fiscally irresponsible is his dad - Mr,. “Read my lips, no new taxes” - who also sucked.

From the News Sentinel:

In 1998, thanks to a healthy tension between a Democratic president and a Republican Congress, the country began running budget surpluses.

That lasted until George W. Bush took office. He saw a projected 10-year federal surplus of $5.6 trillion as a problem, a sign that taxpayers had been “overcharged.” He certainly solved that problem.

The interest on the federal deficit alone is $451 billion in 2008.  Bush is adding $1 trillion to the deficit this year alone - not counting the cost of the wars in Iraq and Afghanistan!  For some reason, Bush doesn’t think those billions (it’s gotta be close to $1 trillion by now) should count.  Huh?

Please go away George.  Really, I won’t be mad if you left office early and let the White House janitor run the show for a few months - he CAN’T do any worse than you are doing!

I titled this post “Bush sucks part 1″ because there’s a LOT more to back up my assertion that Bush is the worst President we’ve ever had, but I don’t feel like doing all the research tonight.  Just pick a subject - economy, growth of the federal government, starting a needless war to settle a family fued, overly intrusive rules and regulations on business (does Sarbannes Oxley - SOX - ring a bell?), unconstitutional wiretaps, imprisonment without charges, etc.

Bush makes lame-brain Carter look like a genius!  And that’s way to much to put into one post, so I’ll add parts to this as I get to them before Bush leaves office.

gk

I’ve read many stories in the past few weeks about how hard it is to get a loan now.  All the stories are saying the same thing - banks aren’t lending, people can’t get loans, so the economy is tanking because people can’t borrow money to buy things.

Bullshit.  This past summer I had to replace my air conditioner (I chose a Trane heat pump and got rid of the natural gas furnace at the same time) and my refrigerator.  The heat pump (a Trane XLi15) cost about $7500 and the fridge was over $2000.

I don’t happen to have $10,000 just laying around so I shopped for financing and got 0% interest for 18 months on the heat pump, and 0% interest for 12 months on the fridge.   The interest rate on both loans will jump to over 18% after the intial promo runs out.

In looking at my budget, I probably won’t have both of them paid off before the promo rate runs out and the high interest part kicks in, so I decided to get a HELOC in order to pay the initial finance companies the reamining balance just before the 0% promo expires.

My house is worth about $200,000, and I only owe about $50,000 on the mortgage because when I moved to TN I used the proceeds from our house in MO as a down payment on this one.  So I’m not in over my head and I’ve got equity - even if the housing market here drops drastically.

Anyway, I called you my bank (First Tennessee) and they took an application over the phone.  They also called my employer to verify my salary and how long I’d been with the company.  They ran a credit check and asked a lot of questions about how much money I wanted ($10,000 line of credit) and what I wanted it for.

They called me back a few days later and said I was approved for a $25,000 HELOC, because they didn’t want to mess with a $10,000 line.  If you’ve read this far, here’s the kicker:

My interest rate is 1% BELOW Prime (as published in the WSJ).  Prime had been at 5% for a few months, but just this week (thanks to the Fed jacking up inflation by lowering it instead of raising it!) it dropped to 4.5%.  So my interest rate is currently 3.5%

And the 1% below prime margin is fixed.  I know the prime rate will go up and down, but my loan will always be 1% below prime.  And with Bush and Helicopter Ben at the controls, the interest rate isn’t going up anytime soon.  (And do you honestly think Obama or McCain will change the Fed cheap money policy?)

To sum it up, I not only got the money I was looking for, I got the money at an interest rate that is stupidly cheap.  First Tennessee is borrowing money from the Fed at 1.5% and loaning it to me at 3.5% - so they make 2% of every dime I borrow.

So the next time you read a story about how the banks aren’t lending money, or how tight credit has gotten - print it out and use it to wipe your ass - because that’s all it’s good for.

To say it another way, it’s easy to get a loan at ridiculously cheap rates - if you can afford to pay it back.  I’m assuming that if I owed more on my house than what it’s worth then the bank wouldn’t let me borrow any more against it - rightly so!

If you don’t have a job, you shouldn’t qualify for a loan.  If you are upside down on your house then you shouldn’t qualify for a loan against it.  If you make $40K/year and want to buy a $400,000 house, then you shouldn’t qualify for a loan.

In other words, banks are lending money - and they’re lending it at VERY low rates.  As long as you can afford to pay them back, which is how it should be.

If you can’t afford to pay them back, don’t bitch and moan about the banks not lending any money, because it’s simply not true!  And you’re stupid for thinking that they should loan you money that you can’t pay back.

So SHUT UP with the “tight credit” and “hard to qualify for a loan” stories.  You won’t get any sympathy from me.

gk

The DJIA dropped another 675 points today, bringing it down to 8579.  Exactly one year ago, it was at 14,164 - its’ all time high.  Aren’t you glad you pulled all your money out of the market last year?

What’s that you say?  You didn’t move to cash because you’re in this for the long term, you’re a buy and hold investor?  Oops!

According to a story on CNN.com today, “We are in a free fall right now and fundamentals have been thrown out the window,” said Phil Orlando, chief equity market strategist at Federated Investors.

Ummm….  Wrong.  The “fundamentals” have NOT been thrown out the window Mr. Orlando - the fundamentals are what’s causing the drop.  We’re at the start of the 3rd quarter earnings season, and there’s no doubt that earnings will be drastically lower than Q3 of 07.

So stock prices HAVE to adjust to keep the price earnings ratio reasonable.  I guess the only question is how low earnings will be - which will tell us how low the stock prices will go.

With the latest drop, the S&P 500 is at a PE of about 12 - which is right about the long term mean.  We’ve been way above that for a long time, so I expect to see the PE “revert to the mean” long term, which means we need to go below a PE of 12 for awhile.  Possibly as low as 8 - which is what the ratio was back in the early 70’s and the great depression.

So, how low can we go?  Let me know if you have a guess.  I’m guessing maybe 7500?  But that’s just a guess.

gk

I ran across something very interesting today regarding the bailout bill that the Senate passed last night.  Here’s a story on Marketwatch.com that’s the tip of the iceberg.  It’s titled Can the ‘William Tell amendment’ save the bailout?

Here’s the first part of it: There can’t have been a more ridiculous bit of legal fluff in recent memory. Yet there it is, in plain view, as part of the much-ballyhooed Emergency Economic Stabilization Act of 2008 that’s been passed by the U.S. Senate.

That’s right - part of this “urgently needed” bailout of dumbasses is to exempt “certain wooden arrows designed for children” from the excise tax.

Don’t get me wrong - I don’t have anything against wooden arrows - and I mainly agree with anything regarding less taxes, but to claim that pork like this will make the bailout bill more likely to pass the House is (I hope!) just stupid.

The cost of the bill is up to an estimated $800 billion - but no one knows for sure.  They don’t know because it’s a pork laden monstrosity.

Title I of the”Paul Wellstone Mental Health and Addiction Equity Act of 2007″ (yes, that’s still the name of the bailout bill) establishes the Troubled Assets Relief Program.

The name TARP is appropriate, because basically they’re attempting to sweep all the toxic mortgages and derivatives that the brilliant Wall Street crowd invested in under a giant rug.  So I guess you could hide it under a TARP just as well….

I literally don’t know where to begin when talking about the pork in this bill.  I guess I’ll start at the top and work my way down to give you some idea of how bloated this thing has become.  It started as 3 pages.  It’s up to 442.

Here’s the text of the bill in PDF format from the GPO.  Please use this link to access the text of the bill.  I apologize, but the links below won’t work because of the stupid search engine Thomas uses.

Here are the first few “urgent” parts of the bill.  In reality, it’s just pork thrown in to get Representatives to vote for it:

SEC. 101. RENEWABLE ENERGY CREDIT.

SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY PRODUCED FROM MARINE RENEWABLES.

SEC. 103. ENERGY CREDIT.

SEC. 104. ENERGY CREDIT FOR SMALL WIND PROPERTY.

SEC. 105. ENERGY CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.

SEC. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

SEC. 107. NEW CLEAN RENEWABLE ENERGY BONDS.

`SEC. 54C. NEW CLEAN RENEWABLE ENERGY BONDS.

SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL.

That’s just the renewable energy section.  Just below that, we get these barrels of pork thrown at the coal industry:

SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT INVESTMENT CREDIT.

SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION INVESTMENT CREDIT.

SEC. 113. TEMPORARY INCREASE IN COAL EXCISE TAX; FUNDING OF BLACK LUNG DISABILITY TRUST FUND.

SEC. 114. SPECIAL RULES FOR REFUND OF THE COAL EXCISE TAX TO CERTAIN COAL PRODUCERS AND EXPORTERS.

SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

`SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

That should be enough pork thrown at energy projects right?  Remember, the whole purpose of this is to bail out the financial industry….  But you’d be wrong if that’s what you thought.  Take a look atthe part named Title II:

TITLE II–TRANSPORTATION AND DOMESTIC FUEL SECURITY PROVISIONS

SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN BONUS DEPRECIATION FOR BIOMASS ETHANOL PLANT PROPERTY.

SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL.

SEC. 203. CLARIFICATION THAT CREDITS FOR FUEL ARE DESIGNED TO PROVIDE AN INCENTIVE FOR UNITED STATES PRODUCTION.

SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL CREDIT.

SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

`SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX FOR IDLING REDUCTION UNITS AND ADVANCED INSULATION.

SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

SEC. 209. EXTENSION AND MODIFICATION OF ELECTION TO EXPENSE CERTAIN REFINERIES.

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO BICYCLE COMMUTERS.

Yup, more pork - this time thrown at the alternative energy crowd.  NOTE - I’m a proponent of alternative energy - I just don’t want the governemnt to fund it!

Let’s see, what’s next in this budget busting bailout bill….  Crap, more energy credits…

SEC. 301. QUALIFIED ENERGY CONSERVATION BONDS.

`SEC. 54D. QUALIFIED ENERGY CONSERVATION BONDS.

SEC. 302. CREDIT FOR NONBUSINESS ENERGY PROPERTY.

SEC. 303. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

SEC. 304. NEW ENERGY EFFICIENT HOME CREDIT.

SEC. 305. MODIFICATIONS OF ENERGY EFFICIENT APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 2007.

SEC. 306. ACCELERATED RECOVERY PERIOD FOR DEPRECIATION OF SMART METERS AND SMART GRID SYSTEMS.

SEC. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN PROJECTS.

SEC. 308. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE AND RECYCLING PROPERTY.

Ok, I’ll skip on down and see what else there is….  O goody, Alternative Minimum Tax relief….  This is another good idea, but why is it in this bill?

SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR NONREFUNDABLE PERSONAL CREDITS.

SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION AMOUNT.

A little further down (believe it or not, I’m skipping entire sections!) we find gems such as:

SEC. 314. INDIAN EMPLOYMENT CREDIT.

SEC. 316. RAILROAD TRACK MAINTENANCE.

SEC. 319. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA EMPLOYEES.

SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR STRUCTURES IN THE GULF OPPORTUNITY ZONE.

SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED COMPUTER CONTRIBUTIONS.

SEC. 322. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF COLUMBIA.

SEC. 323. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS OF FOOD INVENTORY.

SEC. 324. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK INVENTORY.

And check this out - the wool subsidy is back!

SEC. 325. EXTENSION AND MODIFICATION OF DUTY SUSPENSION ON WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL DUTY REFUNDS.

There’s even a tax break for people who received settlements from the Exxon Valdez spill….

SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION WITH THE EXXON VALDEZ LITIGATION.

I’m not making any of this up!  Here’s pork thrown to the Midwest:

SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008 MIDWESTERN SEVERE STORMS, TORNADOS, AND FLOODING.

And pork to the area hit by Hurricane Ike:

SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW-INCOME HOUSING TAX RELIEF FOR AREAS DAMAGED BY HURRICANE IKE.

I doubt it, but all of these sections may have merit and may be useful.  But that doesn’t mean they should be included in this bill, slipped through just to get more pork back to the home districts.  If they’re worthwhile, let them be voted on, one at a time.  See if they can stand on their own merits.  Hah!

Please, call your Representatives and ask them to vote this down!  Tell them you’ve had enough of this kind of crap coming out of Washington - tell them no more!

If you’ve read this far, you’ve got to be concerned.  PLEASE contact your Representative and tell them how you feel.  The Senate passed this crap, but this train wreck of a bailout bill can still be stopped before they vote tomorrow if enough of us contact our Representatives.

gk

The Senate tonight passed the “Paul Wellstone Mental Health and Addiction Equity Act of 2007″.   Why should you care?  Because it’s the single largest, most intrusive, most budget busting bill ever passed.

In case you’re wondering, the “Paul Wellstone Mental Health and Addiction Equity Act of 2007″ is the name of the Senate version of the bail out bill.   I’m serious.  And I’m serious about kicking both of my Senators (Corker and Alexander) out.  On their asses.  Hard.  Because both of their asses voted for this monstrosity.

The bill passed 74 to 25.  You can see how your Senators voted here.

Take a minute and read some of the highlights of what’s in the bill.  Here are a few quotes.  Let me know when you figure out what the hell this has to do with the “Paul Wellstone Mental Health and Addiction Equity Act of 2007″ - or how these items will somehow make the bill more palatable to House Republicans.

The package adds provisions to the House version - including temporarily raising the FDIC insurance cap to $250,000 from $100,000. It says the FDIC may not charge member banks more to cover the increase in coverage.

The bill allows the FDIC to borrow from the Treasury to cover any losses that might occur as a result of the higher insurance limit (This is the dumbest thing I’ve ever heard - prohibit the FDIC from raising insurance rates - while allowing them to “cover any losses” (yes, it’s UNLIMITED) by borrowing from us.  STUPID!)

Here are some other financial bail out items included in the bill that I’m sure Corker and Alexander think we needed….

a deduction for the purchase of solar panels….

allow individuals to deduct state and local sales taxes on their federal returns….

relief for another year from the Alternative Minimum Tax….

Here’s the kicker - and I quote “The Congressional Budget Office said it cannot estimate the net budget effects of the troubled asset program because of the many unknowns about that piece of the bill.”

The dumbass Senators who voted for this bill didn’t have a fucking clue as to what they were voting on - because “of the many unknowns” contained in the bill!

PLEASE - Call and write your Representatives.  Now.  I mean right now, not tomorrow morning, don’t wait, DO IT NOW.  This financial nightmare that’s being ramrodded down our throats can still be stopped if enough people express outrage.  If the House doesn’t pass it - it won’t become law.  It’s that simple.

God help us (and our kids) if this gigantic takeover of the private sector goes through.  I’m only 46 and there’s no way to pay for it in my lifetime - it’s borrowed from my kids and their kids.  STOP THE MADNESS NOW!

Someone must have screwed up, because when Bush made his speech the other night, he actually got part of it right.  In the past 7 years, you can probably count on one hand the number of times that has happened.  It’s probably lower than mere chance would allow!

I’ve said it before, but it bears repeating - GWB is the worst president in my lifetime - perhaps ever.  I’m 46, so that includes such fuck ups as LBJ, Nixon (who actually bears the brunt of the blame for removing us from a semi-gold standard which led to the financial mess of today) Ford, Carter (I didn’t think anyone could ever top Carter in incompetence!), and Bush I.

The Daily Show had a great segment last night comparing the speech Bush made before the start of the Iraq invasion to the one he gave Wednesday night.  Pretty hilarious!  Terms like “crisis”, “immediate action”, “urgent”, etc, were used in almost the exact same context in 2003 as they were in 2008 - and both were mostly lies.

Anyhoo - here’s the part that Bush got right.  I’ll highlight a few things that I feel are especially pertinent to this “crisis”.

Here’s part of Bush’s speech as transcribed on Whitehouse.gov:

First, how did our economy reach this point?

Well, most economists agree that the problems we are witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad, because our country is an attractive and secure place to do business. This large influx of money to U.S. banks and financial institutions — along with low interest rates — made it easier for Americans to get credit. These developments allowed more families to borrow money for cars and homes and college tuition — some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit — combined with the faulty assumption that home values would continue to rise — led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell. And this created a problem: Borrowers with adjustable rate mortgages who had been planning to sell or refinance their homes at a higher price were stuck with homes worth less than expected — along with mortgage payments they could not afford. As a result, many mortgage holders began to default.

These widespread defaults had effects far beyond the housing market. See, in today’s mortgage industry, home loans are often packaged together, and converted into financial products called “mortgage-backed securities.” These securities were sold to investors around the world. Many investors assumed these securities were trustworthy, and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac. Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.

There’s not much disagreement anyone should have with that.  One point that I want to make sure everyone understands is what started this process - the Feds lowered interest rates too far, and kept them artificially low for waaaay to long.  Individuals and institutions basically had free money to play with - and they played.

I’m in the IT business, and when we have a problem, we conduct a “root cause analysis” which examines the real cause of the problem, then we use that info to figure out how to prevent the problem from happening again - ever.

So, root cause for this “crisis” is the Federal Reserve interest rate policy from about 2002 through 2005.  Still with me?  Good.

So, what enabled the problem to continue until it reached “crisis” proportions?   Fannie and Freddie - the Government Sponsored Enterprises (GSE’s) - bought up the bad debt from the companies who originated the bad loans - enabling them to originate more bad loans because they didn’t have to worry about being paid back.

Fannie and Freddie had already paid them, so they had money to lend to make more bad loans…. Which they sold to Fannie and Freddie which enabled them to make more bad loans….  Which they sold to - I hope you get this, because I don’t want to say it again!

Ok, still with me?

There’s one last key part that needs to be mentioned.  The part where Bush said “many believed they were guaranteed by the federal government”. This is key because investors (including many foreign governments, hedge funds, and state pension funds) bought the mortgage backed securities from Fannie and Freddie specifically because they had an implicit guarantee from the federal government - after all, what does “Government Sponsored Enterprise” mean?

So what’s the key ingredient in all of these key points?  The government.  The federal government created this mess, the federal government kept it going and growing long after normal market forces would’ve caused it to slow down or stop, and the federal government got gullible investors to buy up the toxic crap, repackage it, and sell it to other (still more gullible) investors.

This same government is the one who now says they need $700 billion and a bunch of new regulations to clean up the mess.  And a bunch of people and gullible investors believe them!  Give me a break!

Here’s the gk plan - let the stupid assholes who spent more than they could afford, gave loans to people who couldn’t pay them back, and bought the loans from the people who originated them - let them all eat cake.

Let them go broke.  Wiped out.  Bankrupt, disappear, and otherwise vanish.  The are stupid and they should reap what they sowed.  Idiots!

But that’s not Bush’s plan.  His plan is to make all of us fork over our money to bail out these stupid people.  That’s a dumb plan.  I don’t care if it’s called a bail out or a rescue, it’s still a dumb plan

gk

A snippet from yesterdays’ DailyReckoning email.

“Study Criticizes ‘War on Terror’; Calls for Law-Enforcement Approach

“The publication of ‘How Terrorist Groups End’ – a thorough new report by RAND, a think-tank with historic ties to the U.S. military – vindicates critics of the ‘global war on terror’ who have argued that a law-enforcement approach to fighting al-Qaeda, rather than a military war, with all the bluntness that wars entail, would have been better for protecting Americans. ‘The report concluded that the administration’s war on terrorism has not significantly degraded al-Qaeda and that the group has morphed into a more formidable enemy,’ writes Ivan Eland, Senior Fellow at the Independent Institute and director of the Center on Peace & Liberty.”

I haven’t had this blog long enough to say much about this - at least much that’s relevent to the news of the day - but I’ve been arguing this point since 2001.   Especially since the beginning of 2003 when Bush was intent on settling his family fued by taking out Saddam - ummm - I mean “regime change”.

You can download a PDF of the full report here.

We could keep all the hugely wastefull spending programs intact AND balance the budget if we’d simply stop this nonsense and bring all of our troops home.  By “all of our troops” I also mean the ones in Korea, Japan, England (why in hell are we paying to keep troops based in England anyway?), Germany, Italy - and Iraq.  I don’t think we’ve ever wasted this much money in such a short period of time.

gk

Here are the current top three stories in the NY Times Business Section as of 9:30pm ET, July 28th:

I get an email every day from a financial website called the Daily Reckoning.  It’s mainly good stuff, once in a while they go a little off (as Aussies sometimes do) but it’s mainly good reading.

The email I received yesterday contained this:

“Buffett says inflation is exploding,” according to CNNMoney.

What can people do? A report in today’s news tells us that many are “delaying health care.” Probably a good move for the oldsters. If they put it off long enough, they won’t need it at all.

You could hang George W. Bush for inflation too. It would be fine with us. He let government spending get out of control. “Deficits don’t matter,” said his #2, Dick Cheney. More new federal spending and US financial commitments were added in the Bush years than under all the rest of America’s presidents put together; and more new money was created while George W. Bush was president than in all the years since the Declaration of Independence combined. Legally, we don’t know if that charge is enough to hang a man. Besides, it seems extreme. In the middle ages, if the keeper of the mint allowed monetary inflation, the king had him castrated. That seems like punishment enough.

Buffett says he is supporting Obama.

I like it!  Nice touches of sarcasm along with supporting data.  I don’t think I’m an Obama supporter, but I know that Bush has sucked - and he’s not likely to grow a pair before the election this fall.

There’s no real point to this post.  I just liked the email and wanted to share my thoughts on it. 

gk

This just in - President Bush is “puzzled”

Oh yeah, that’s something new.  Let’s see what the story has to say next…

Bush was not “open and forthright on Iraq” and was slow in his response to Katrina. 

Damn, FoxNews is on their game today!  These are some awesome scoops! 

In case you haven’t noticed, I’m being sarcastic.  Bush is an idiot, who got us into a war in Iraq to finish off a family feud.

gk

It was interesting watching the stock market go into a steep sell-off today after the Fed meeting minutes were released.  For some reason, most people are still underestimating the severity of the problems in the economy, and they’re stunned when they see something that doesn’t fit into the Goldilocks scenario they’re anticipating.

Here’s how CNN phrased the dilemma facing the Fed: The Fed lowered its economic growth forecast for the year. At the same time, it raised its projections for inflation and unemployment. The combination of slowing growth and rising prices [emphasis mine] created a difficult situation that made the Fed’s latest decision to cut rates on April 30 a “close call.”

Webster defines “stagflation” as persistent inflation combined with stagnant consumer demand and relatively high unemployment

Notice the similarity between the two preceding paragraphs?  Everyone remembers the stagflation we had in the Carter years.  Carter was a disaster for this country, and it took Reagan to turn things around, but Carter was an economic genius compared to Bush!

At least Carter took steps in the right direction by deregulating the oil and natural gas industries - Bush ain’t done squat except to print more money to try to inflate his way out of the mess he caused by creating cheap credit after 9/11.  

The problem wasn’t so much the easy money policy, it was that they kept the easy money policy in place for far too long.  This created the housing bubble, which led to our current credit crunch as all the mortgage backed security instruments lose value as home owners can’t make payments on houses that are worth less than the mortgage balance.

The “close call” CNN refers to is that the Fed is stuck now.  They want to lower rates to stimulate the economy, but that will just exacerbate the inflation problem which is caused by too many dollars in circulation.   That’s what happens when the Fed tries to manipulate the economy instead of following their mandate to ensure a stable monetary system.

From the website of the Federal Reserve: The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system.

The Fed has become too political to do its’ job - which is to provide for a stable currency.  The same easy money policy (which leads to inflation) has caused the value of the dollar to drop by about 50% since Bush took office.  Like it or not, a dollar today will only purchase about half of the “stuff” that it would 7 years ago.  Thanks GW…  NOT!

When you see the price of commodities such as oil, wheat, soybeans, corn, etc. (the “stuff” we use) double and you wonder why, that’s why.  Global demand plays a part, but the major reason is that we are paying for the “stuff” in a global marketplace with inflated dollars that people don’t want.

That concludes your economics lesson for today.  Any questions?

gk

According to a FoxNews story, the U.S. military says it has found caches of newly made Iranian weapons in Iraq, leading senior officials to conclude Tehran is continuing to funnel armaments into Iraq despite its pledges to the contrary

Excuse me, but that’s like blaming Mexico for the US allowing illegal immigrants. 

We’ve supposedly been in control of Iraq since the famous “mission accomplished” speech back in 2003.  Anyone remember that?

Does anyone remember that the Bush administration used 9/11 as an excuse to invade Iraq - which had nothing to do with 9/11?  Does anyone remember that Iraq was going to give all of its’ “weapons of mass destruction” to Al Qaeda - but then it turned out that there were no “weapons of mass destruction” in Iraq?

Back to the point of this rant - if we’re in control in Iraq, why is the administration allowing Iran to “funnel armaments into Iraq” anyway?  Are we in control of the country or not?  You can’t have it both ways.

gk

I’m sure Henry Paulson is a bright guy, but you’d never know it from some of his public statements.  Here’s what he said today according to FoxNews:

“There are always difficulties during periods such as this. There may be more bumps in the road,” Paulson said in a statement to reporters at the conclusion of the meeting of G7 finance ministers and central bank governors.

Duh.

After meeting with the world’s top financial guru’s, the people who are supposedly in charge of their respective countrys’ economies, that’s the best he can come up with?  Anyone who’s read a paper, seen 10 minutes of TV news, or even glanced at the front pages of the NY Times, CNN, FoxNews, ABC News, USA Today, or Google News knows this drivel.

“There may be more bumps in the road.”  Way to go out on a limb Hank.  Do you think you could be bothered to actually say something pertinent next time?  Or should we expect more enlightenment like this from you in the future?

The complete incompetence of this administration continues to astound me.  I’m basically a libertarian, so I don’t want the federal government to actually do anything about the current financial mess, but I do expect them to know what’s going on, and to make statements that give us peons a clue as to what they’re thinking - that way we can prepare for the inevitable mess they’ll make of the situation.

I say inevitable, because they can’t help themselves.  The government is basically powerless to do anything constructive to repair the mess they helped to create - but that won’t keep them from passing a bunch of stupid, worthless, costly laws that we’ll all need to spend time and money on in order to make sure we’re in compliance.

I’m talking about the current financial mess, but you could apply the same statement “The government is basically powerless to do anything constructive to repair the mess they helped to create - but that won’t keep them from passing a bunch of stupid, worthless, costly laws that we’ll all need to spend time and money on in order to make sure we’re in compliance.” to damn near anything the federal government touches.

Wow - I just quoted myself one sentence after I wrote it.  That must be some kind of record….

Anyway, thanks for the warm fuzzies Hank.  You displayed your awesome intellect with your statement today, and I’l glad that you think there “MAY be more bumps in the road.”   Good stuff, you ought to pass that line onto Bush, as it would sound even more profound coming from his mouth.

gk

 

Looks like Bush is looking for new ways to spend your money.  He’s already turned record surpluses into record deficits, he’s wasted billions on the “war against terror” on Iraq, and he’s stood by and done nothing while watching the biggest bubble in recent history grow to the bursting point.  Now this from:
http://money.cnn.com/2008/01/25/news/economy/preview_sotu/index.htm?postversion=2008012618

“Look for a pitch for tax-related provisions, such as opening the door for states to use tax-free bonds to help homeowners refinance out of unaffordable subprime [adjustable-rate mortgages],” said Jaret Seiberg, senior vice president at the Stanford Group, a Washington policy research firm.

So now Bush wants everyone to pay for the bad decisions of the idiots who bought more house than they could afford.  I guess he figures that if he can spend other people’s money (that he doesn’t have) why can’t everyone else? 

I’ve said it before, but you can’t borrow your way out of debt.  This plan would shift the existing debt burden to responsible taxpayers, which simply encourages more irresponsible behavior.  I think he’s just trying to postpone the inevitable crash until after he’s gone to protect his “legacy”- which will just make it that much worse.  

The same goes for his “stimulus” rebate package.  The only thing it’ll stimulate is more borrowing.  And I really want to know how it can be called a tax rebate plan if you give a rebate to people who don’t pay taxes….  Come again?

gk