Fiat Fractions and the Economy...Liars and Crooks

If you have been reading my blog, I think by now, you know it reflects my disposition. I am very pragmatic. I would not classify my thinking as overly interlectual. In fact, if I ever get invited to an economic conference, I would have doubts. Did these guys receive their doctorates from the internet? Nevertheless, I do have a natural gift in being able to understand the Ivy Tower and put their thinking into everyday examples.
This intro serves as the background to a report that I just recently read. Ever hear of Marginal Productivity of Debt(MPD)? This is an economic term used to describe the effects of debt that can influence economic growth by government, whether federal, state or local. It shows the amount of money that is spent to produce one dollar of growth.
My first reaction to this report was tell me something that I don't know, but upon further reflection, I saw many other aspects to it.
The article pointed out that nearly 20% of every dollar of disposable income comes from the government in March. This money has many names from Social Security to unemployment checks. These government benefits are also called "transfer payment."
To understand the impact of the report one must have more info on the trend. I borrow the concept from technical analysis. If a stock is rising, the trend is up. It won't change until something affects the basics of the stock like its sales, margins, labor and supply, product saturation, things fundamental to it. You can use science too. A body in motion trends to stay in motion until friction, gravity or similar overcomes the momentum.
Now, back to MPD. In 2006 it took $6.31 for a dollars worth of growth. Going back to the 1980s, the cost of MPD was about 12% according to the US Bureau of Economic Analysis. Back in 1959 when the bureau began covering this aspect, it cost only 6% of debt for a dollars worth of growth. This translates to $1.86 for one dollar. Can you see the trend? And it is definitely negative. Why?
The report stated no particular reason. It did however cite many future concerns because benefits are under scrutiny and on top of that pressures are building with the ever increasing size of the federal government, declining revenues along with the fact that transfer payments will gobble an increasing share when you factor into the equation the baby boomers and Medicare which will compound the deficit which in turn could cause interest rates to rise, resulting in a vicious circle of decreasing returns. These fractions are in negative territory and only getting worse with time.
I cannot argue with the above, however I do think the reason for the increasing cost are related to the other aspects of which mostly are caused by our federal government and the decisions that they have made or not made.
The one chief reason that is outside of the government direction, but still responsible for it, is the exponential growth of the shadow banking industry. Its affects were evident in the financial crisis of 2008. The investment houses, hedge funds and finance companies were as big, if not bigger than the banks within our nation. These unregulated groups along with their unregulated actions like the spreading of CDS(derivatives)which by the way are surpassing $500 trillion dollars and the whole value of the world GDP is only $65 trillion. These idiots are allowed to function when one slip could crush the whole economy of the planet. No one could cover the bill even with centuries to pay it. Keep that in mind when the Republicans say we have too much regulation or think Bernie Madoff. An investment adviser must be registered when you have over 15 clients. Madoff had over 3,000. And then, there is the flip-side to this. We regulate an industry, but with the next election, the new party in power waters down their ability or better yet, put a yes man like we usually have in the SEC and elsewhere. Lehman was declared solid four days before bankruptcy.
Next, the military complex. Since 9/11, we have spent over one trillion dollars in the two wars and all of it will cost more because it all got added to the deficit. Yeah, Cheney, "deficits don't matter!" (past winner of my Ding-Dong Award). No one can put a figure which needs to be added to this: the loss of life and resources which could have served all of us with a better purpose.
Finally, the declining value of the dollar and with Bernanke printing overtime, its value will continue to shrink. This is why MPD is continually costing more to produce one dollar of growth. Not to mention the Obama stimulus package will only put the cost off the charts in the near future. Translation? Yogi said it best," a nickel, ain't worth a dime anymore." Better have some gold, you're gonna need it.
LIARS and CROOKS: Gotta go with Secretary of Defense, Robert Baker. He does not want to be associated with a country that won't run a $trillion dollar modern military. He's taking his ball and going home because "they" won't play by his rules. Yeah, his rules said never negotiate with terrorist, but in his last interview with 60 MINUTES, he said it is possible to end the conflict in Afghanistan if we settle with the Taliban. It shows the military complex is ALL B.S. They have been wrong in everything that they do. Terrorist is fear and FDR sated it best,"the only thing that we have to fear is fear itself." If we only protected our borders 9/11 would never have happened, but one agency after another would not act on the tip that these first terrorist were overheard on a Sat/phone in Yemen and they were followed to San Diego and the whole thing could have ended right there, but NO! These idiots are responsible for the tragedy and the subsequent ten years of pain and loss.

Summer Health: Skin Care...and of course, LIARS and CROOKS

With summer approaching it is very important to be aware of exposure to the sun. Hey, I love the beach and I believe the evidence that a lack of sunlight makes for a poor disposition which can affect your personality to the negative side. By the way sunlight helps your body to produce Vitamin D which it needs and this is the natural way to produce it. Nevertheless, too much of a good thing has negative affects. You drink too much, you get drunk. Print too much money and it lowers its value. Zealots and fanatics make too much of their point of view, whatever.
So, we need to protect our skin, especially if your car is like mine and lacks air-condition. You know what I mean, your left arm hangs out the window, absorbing too much sunlight while you driving your car. The bottom line here is until next year when new FDA regulations take effect, you need to know who is ripping you off with there so-called sun protection.
First of all, there is no such thing as a wet adhesive, spray-on, rub lotion,etc. that will protect you even if you get wet. It is B.S. advertising. There is no such thing as sunblock. Nothing can protect you from the power of the sun's rays. However, there are two things that is necessary when buying some type of sunscreen. The product must say that it protects you from UVA and UVB sunlight waves.
What is UVA? It is a lower band of light that causes skin cancer. You need protection. By the way, do not be fooled with labels that say our product is rated SPF 60, 70 or 100. Next year, the highest rating will only be 50 and anything over 35 makes very little difference.
What is UVB? It is another low band of light, invisible to the eye, but  we all know its effects - sunburn. You need protection.
There is also another wave for the geeks among us. It is called UVC. It helps form the ozone layer and at the moment, no need to protect yourself from it.
So, get out there! Enjoy the outdoors. Less texting, less computers, less phone and more of HIS natural air and HIS sunlight.
LIARS and CROOKS: Hands down, slam dunk and not the kind I thought the HEAT would put on DALLAS, but your basic top of the line liar, Anthony Weiner. Of course, Mr.Weiner has seen the error of his ways and he has said that he is seeking professional help. Yep, his next set of photos will be much clearer. ***********NEWS FLASH***********
That was yesterday. Today, Congressman Weiner resigned. Prediction: Within one year he will have a book out and depending on how his marriage develops or terminates, a movie-of-the-week within five years. Make no mistake a part of me is envious of him and the rest of me despises him, our media and culture of the present day climate in America. Here is a man who made it to be a Congressman of the United States of America for twelve years and did nothing. No ideas nothing to help America when it needs it the most. He says he cares about the middle class and he did find some funding to help trouble teens who found help by cleaning up graffiti. He was pure status quo. What a joke. I can't get a book published that would do more than 100 Weiner's(no brag, just fact)and I stand by my prediction for him. In this country it is all about a name whether good or bad as long as it is in the news. Makes me sick, but I will persevere. Hope you do too.

QE3: To Be Or Not To Be?...Liars and Crooks

Ever consider the money math of the Fed? Where do they put their money? Yes, we know they print it, but why? They respond to borrowing, loans, debt in all its form. Then what? Generally, they buy treasuries, which circulates money that the economy utilizes. In the history of the Fed, it has always ben this way until Ben arrived. The last two stimulus packages has seen them purchase TARP, GM, AIG and toxic mortgage loans from the ailing banking industry. So, their once pristine portfolio now contains junk. In fact, they hold more US government debt than China. China holds $895.6 billion in debt while the Fed holds $896.7 in US debt, including some questionable assets. They realized this and they changed their operating procedure to transfer this bad stuff to liabilities of the Treasury. In a recent hedge report this was notated and highlighted by this other math fact: if Fed assets fell by just 2%, the Fed would be wiped out because their assets could not cover the corresponding losses. And you thought Enron was a thing of the past? This is blantant corruption of our currency by the keepers of the of the key. They continue to privatize the profits and socialize the losses. Now, they have plenty of money to keep all the games going like the debt ceiling, now at $14.3 trillion and soon to be $16.5 trillion and counting... which is making it terrible for everyday citizens. END THE FED!
LIARS and CROOKS: Watch the documentary on Hulu.com called, "FLOW." It shows the corrruption of the IMF. They use a committee to determine how to provide water for the global community. The make-up of the committee is all the CEOs of water companies setting price and standards that will continue to make them rich with little concern for their mandate of providing water for the poor of the world.

Sign of the Times...Liars and Crooks

A recent list of names with predictions received their due date today, not all, some are still evolving. Me, I said that the Japanese government and Tepco Utility should come clean about the damage to the nuclear plant. I stated that it is a meltdown and offered a suggestion to entombed the site. Today, they announced that indeed the fuel rods had melted in reactor number one and very severe in three and four.
Meredith Whitney took abuse for stating that there will be many municipal bond deflaults later this year. Today, the state finance minister of Illinois said that taxes to cover the state's deficit would amount to $42,000 for each citizen of that state.
Sergio Marchionne of Fiat, S.p.A. stated in 2009 when Chrysler got out of bankruptcy that he would repay the two governments, US and Canada, the entire bailout with interest. He was jested and that is the nicest thing that "they" said at that time, especially after he laid out his plans for the merger. Today, he repaid the bailout. He is on schedule with his timeline plan. Chrysler made money for the first time in five years and the merger is a real merger with better days coming. And if the NFL ever compromises, the Detroit Lions will do better that Minny or Chicago. That's right I said it and you can call me on it later, if there is a football season.
Ben Bernanke said that QE2 will end in June.
LIARS and CROOKS: A senate bill is circulating that will limit defense spending on printing. Yes, PRINTING! It doesn't matter that the NATO helicopter which is really the American military fired on Pakistani soldiers who fired on the airship after it entered their airspace illegally or that the military stated that they would enter Pakistan again illegally, if they thought that it would result in claiming another terrorist leader and that the two wars have stolen one trillion dollars from our nation for nothing, including the lives of so many brave young men. The senate is watching costs in printing.
One other tibid: The National Literacy Month ended in April, maybe we should give it another try - for the remedial students...and the senate.

DISASTERS: Natural...and Man Made

Got Bills, Need Cash? Sell Assets, Sell House...LIARS and CROOKS

Unlike the government we are mostly still in a recession and the garage sale mentality is spreading to include municipalities and states. Would you sell your house, knowing that you have no place to go? The selling of public assets to private firms is a disease of stupidity. For stop gap cash flow to relieve serious thinking and creative output, small minded officials are misusing their public positions and offering fire sales for landmark buildings, turning over toll roads and even power plants to firms like sleazy, shameful and deceitful.
Look Good Tonight, but in the Morning Light...
Officials are selling their office buildings for immediate cash to cover shortfalls, but for the next twenty years, they will have to rent back or seek leases for the same space and that will only add to their debt along with the loss of an asset.
Make a Donation, Get an Asset
In Wisconsin, they are considering selling their power plants to private companies like Koch, which happens to be a big campaign donator and employs many lobbyists.
In Chicago in 2008, Mayor Daley sold the parking meters to Morgan Stanley, et al. who immediately raised the fees 42%, cut the size of parking spaces and lowered the time allowed on the meter.
And the REPUBLICANS don't want regulation. NOW, YOU SEE WHY!
Fix the pothole? No problem as long as you allow the placing of billboards - Everywhere! You won't see a street name, but you will know where the next fast food joint is located.
LIARS and CROOKS: Can't believe this is true. Sorry, I didn't catch the officials name. He is with the European Common Market(ECM)in the fiance division for the Euro. He said,"Yes, we have to lie when the issue is so serious that we feel that the public just would not understand." And speaking of which the ECM officials said there is no truth that Greece is leaving the Euro, Portugal needs a bailout or Spain for that matter. Ireland is doing a fine job with its austerity program. Believe what you will, but I said it before and I'm saying it again, "END the FED!"

Did They "CHECK" with You?...and LIARS and CROOKS

According to an analysis by the Associated Press of S&P's 500 companies, which had the same CEO for 2009 and 2010 and using a formula which adds up salary, perks, bonuses, preferential interest rates on pay set aside for later, and company estimates for the value of stock options and stock awards for the day granted for the top 50 CEOs of this group. They did not call me. Did they check out with you? In any case, this represents "our" economic recovery. By the way, I know that these guys are fair and when you returned to work, I'm sure that your salary and "check" increased in the same percentage ratio as these leaders. In addition, I'm sure that these same companies increased their profits to the same ratio along with their stock performance. It goes without saying. Right? Also, to limit space, I only used a few of the top 50.
Philippe Dauman, Viacom, $84.5 million, up 149 percent.
David Zaslav, Discovery Communications, $42.6 million, up 265 percent.
Robert Iger, Walt Disney, $28 million, up 30 percent.
David Simon, Simon Property(malls), $24.6 million, up 430 percent.
Ahmet Kent, Coca-Cola, $19.2 million, up 30 percent.
Glenn Britt, Time Warner Cable, $17.3 million, up 10 percent.
David Snow, Medco Health Solutions, $16.4 million, up 23 percent.
Like I asked, how much of a wage increase did you receive?
LIARS and CROOKS: good old "helicopter" Ben held his first Fed newscast after their meeting last week. He admitted there was a little inflation, but it would soon dissipate. Funny, but the CPI does not include food and energy. I guess that last year(2010)when gas was high at $2.68 per gallon and now, approaches $4.00 per gallon and food(up 25 percent), forget about it, we're all on a diet for now, cause' our Fed leader said that these false signs of his spending by the Fed will soon disappear and he supports a "strong" dollar which is down from its purchasing power(joke) of .89 cents to .72 cents. You do the math.