Friday, February 27, 2009



We have still received no explanation from the Administration regarding the secret meetings and millions of dollars in support that Goldman gave to or raised for Obama to get him elected. We still have received no comment from the Administration during the campaign or now that Obama is elected about the role Goldman played in the sub-prime mortgage mess, the oil price run up, or the billions of dollars in executive bonuses paid by Goldman. The silence is becoming deafening.

Maybe this will help explain why the Administration is keeping the media attention away from Goldman. Look at the stock value of our major investment banking houses, the largest in the world, since Obama got elected.

On election day, November 4, 2008:

Goldman Sachs traded at $95.00
Bank of America traded at $24.62
Citigroup traded at $14.81
JP Morgan traded at $42.42

On the day Obama was sworn in as President, January 20, 2009:

Goldman Sachs traded at $59.13
Bank of America traded at $6.50
Citigroup traded at $3.58
JP Morgan traded at $21.27

Yesterday, February 26, 2008:

Goldman Sachs traded at $94.00
Bank of America traded at $5.89
Citigroup traded at $2.83
JP Morgan traded at $24.18

Since Obama got elected:

Goldman Sachs lost 1% of value
Bank of America lost 76% of value
Citigroup lost 81% of value
JP Morgan lost 43% of value

Hummm. Goldman loses 1% while the rest lose 43%, 76% and 81% of value. There seems to be something seriously wrong with this performance since Obama got elected. Wonder why Congress seems to have no interest in it?


On Balance What Problems Might Obama be Solving?

As the new Administration continues to struggle to get new programs out the door, which is certainly understandable when you are throwing everything including the kitchen sink at the public, I wanted to offer my help to them.

First, I find it rather bizarre that after two years of investment financial analysts, media financial analysts, Congressional financial analysts and Executive branch financial analysts being dead wrong on the economy and virtually every aspect of the economy that Washington, Wall Street and Madison Avenue continue to listen to them as if they had a clue what they are talking about. Don't the leaders in the Obama administration remember? Oh yeah, the same mouthpieces that blew it before are speaking for the new administration.

Congress has been studying the collapse of the housing market for over a year and we are yet to see anything except ways to save mortgages in foreclosure or save the criminals that wrote the mortgages that are in foreclosure. Even Obama's chief of staff was part of the Freddie Mac Fanny Mae mess that evolved from the liberalization of mortgage rules.

You want to fix the problem here is a good start. Allow 4.5% refinancing with minimum closing costs. Bank of America is allowing refinancing after receiving $45 billion in federal bailout funds but the Bank of America closing costs on refinancing have risen to $16,000 when they used to be $3000-5000. What kind of a deal is that for clients? They may be lending money again, our money from the federal bailout, but now it costs us 3-8 times as much.

There is no reason to require appraisals, title searches and registration fees costs thousands of dollars for refinancing mortgages already owned by the banks. Get rid of the corrupt fees and rigged appraisals and put money back in the pocket of mortgage holders and you will finally get real stimulus. While some of those in foreclosure should be saved most should not be when over 95% of the people are making payments on time. Lowering the monthly mortgage payment of the good loans will immediately put those hundreds of dollars a month into the economy.

The sale of foreclosed homes should not be allowed to impact on the market value of homes not being foreclosed. Appraisers are dropping market rates where ever there is a glut of mortgages and applying such loss of value to regional areas experiencing no foreclosures. Unscrupulous appraisers can get away with the same manipulation to lower values as they did to raise values the past 3 years.

Speaking of appraisers, if a home has been remodeled and exceeds energy and environmental code it should have a much higher value than a home not remodeled. Even homes built to code are far from achieving energy and environmental efficiency peak potential. Right now a home needing $50,000 to $100,000 in energy and environmental upgrades to exceed standards is valued the same as a home with the most advanced materials and equipment, a joke if the nation really wants to save energy. There is no value gained by making the improvements. We are encouraged by present law to take shortcuts and not use advanced materials to keep the costs down.

Historic preservation must accommodate energy and environmental improvements and reward them when made but these homes are also discounted for age and penalized for maintaining historical standards. For example, if a home was built without closets but used cabinets or free standing wardrobe closets they will be rejected as a bedroom and significantly decrease the present value of the home even though they are being historically preserved. Does that make any sense?

What about the banks, how do we save them from self-destruction? Well, if you are liberal and believe it is our responsibility to pay for their sins then do whatever Pelosi and Franks tell you as you already have made up your mind they are too big to fail even if it takes nationalization to save them. What is a few more hundred billion dollars when money can be printed at will? Even Obama slipped $750 billion more into his new budget to cover unexpected bank losses.

I wonder why the Administration finds it so important to save banks like Citigroup and Bank of America when they have already cost us $90 billion to keep them alive, snd after all that cash they are still on life support. Now since all individual deposits in those banks were already guaranteed by the FDIC, that means any money they need has nothing to do with the little people. So why in the world have we already pumped in $90 billion when the little people were protected? Who is Congress protecting and bailing out if the money is not needed for depositors?

So where does this leave you? In the first place, 47% of you didn't even vote for Obama which the media seems to keep forgetting as they talk about the president as if everyone in the world voted for him. Here in American a six percent victory is not a landslide. Truth is he should have won by 15-20% and didn't.
However we still have those that did support him. I doubt they all believed he would advance such a liberal - socialist agenda, especially in such dire financial times.

In normal times I would say contact your Congressmen to stop the largest government spending spree in history but the Democratic Majority are demanding he spend even more. Obama promised to stop pork barrel spending. His own stimulus bill had at least $10 billion in pork and a new appropriations bill he is expected to approve has $410 billion, with a substantial amount of pork barrel. I guess Obama can't keep all his promises.

We have no campaign reform being discussed though it is the biggest violator of ethics and cause of corruption in Washington. We have no control over pork barrel spending as witnessed by the legislative record to date. We have no control over lobbyists working in government as a number of lobbyists have been hired by the Obama administration.

We do have a worldwide expansion in abortion approved. We do have stem cell research approved that encourages the "harvesting" of unborn fetuses for scientific research. We do have a move to force unions into all the states and industries nationwide, even if a state has chosen to be right-to-work. We do have millions of federal dollars being poured into liberal activist organizations that demand bigger government and more spending.

One final observation and that is regarding the liberal-biased media in the television and newspaper business who were so responsible for trashing Palin and McCain and getting Obama and Biden elected. As these media are rapidly falling into bankruptcy and disappearing I'd say your hero seems to have lost interest in your cause. Now are you glad you got him elected? Do you still have a job?

Wednesday, February 25, 2009

Obama Seduces Congress - Promises Everything Now

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President Obama finally adopted the Bill Clinton approach to getting away with anything by copying the Ronald Reagan straight talk technique. The big difference, however, is that Reagan was honest about what he said and straight forward in what he meant. With Clinton the style never matched the morality and with Obama the style was used to mask an expansion of his people's agenda to a liberal assault that has not been seen since FDR tried to stack the Supreme Court because his legislation was constitutionally illegal.

It was a masterful speech before an adoring Congress and media and absolutely no one seemed to notice that anyone in America with money was going to be taxed more, any corporation with success was going to pay more taxes, anyone driving a car, truck or bus was going to be taxed more, and about the only people who really won't be taxed more don't pay any taxes to begin with.

The speech was a blend of Harvard business school, Harvard Law School and Harvard Divinity School in which we are told why his agenda is the only door to the future that has the blessing of our Founding Fathers, the Ivy League and God. It was great theater. Congress is great theater. The avalanche of congressional hearings on the "crisis" are great theater. We just had no idea how much we were paying for the tickets to this theater.

There is no doubt we are on the way to pouring $5 trillion into solving the crisis, if not much more. We are already way over $1 trillion and there has been no change in the economic mess. A couple of trillion more may be committed already through Federal Reserve, Treasury, FDIC, Fannie Mae, Freddie Mac and other agency actions. Then there is the $410 billion slush fund bill sneaking through Congress right now. Add to that all the new money that will be needed to pay off the corrupt bank loans, so called "toxic" debt, and the social agenda Obama described covering everything to do with health, energy and education, and we are close to overtaking France and Spain as leader of contemporary socialism.

One truth we should carefully examine. How much of what is happening is the careful, patient and long term strategy of Osama Bin Laden dating back to 9-11 in NYC? He said he would set in motion actions that would bring down our economy. Blowing up the heart of Wall Street in the World Trade Center was certainly a masterful stroke. Maybe the world economic crisis immediately after 9-11 was just the first wave of the long term impact. Bin Laden knew money, he was worth millions, and he knew the vulnerabilities of the American economy. All he had to do was to quietly encourage the proliferation of greed and dishonesty that was already well entrenched in Wall Street and Washington, DC.

Make no mistake, Osama Bin Laden has cost the USA hundreds of billions of dollars in military expenses in Iraq and Afghanistan every year since then and terrorized many other areas around the world. No one has ever reported the real losses to Wall Street and the economy from the 9-11 attack on the World Trade Center. What was really in the vaults of the Twin Towers? Was Bin Laden behind the run up in energy costs? Was he behind the repackaging of mortgages into sub-prime investments? Who knows? The most powerful nation with the best intelligence agencies in history doesn't have a clue what mountain he may be hiding in today, let alone how he survived and what he did the past decade.

Oh yes, as for the cost of the tickets to the theater in our nation's capitol, if we throw $5 trillion at the problem that means every citizen of the USA will pay about $14,200 to cover up the corruption, bank mismanagement and expansion of social services that will all be solved with the largest cash infusion in history. Now, are the theater tickets really that valuable? And how is it 95% of our citizens will get a tax reduction?


Wednesday, February 11, 2009

Obama and Geithner - Enough Whining & Finger Pointing - Give Us a Reason to Hope!

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President Obama and Treasury Secretary Geithner both gave major addresses in the last 24 hours, talks given with a great deal of advanced hype on how they were going to show how the new Administration was in control of the economy, and the result was a public relations nightmare casting severe doubt on the real communications skills in our nation's capitol.

First Obama went on prime time TV and his long winded answers seemed more like a lecture from a professor on the fundamentals of blaming everyone else for his woes, raising fears on the fate of our economic system, and promising everything would be clear this morning when Geithner gave his national address on fixing the economy.

I always thought the president was supposed to give us hope when we were down, not further depress the public with talk of the worst economy in our history or an Armageddon on Wall Street. Even Franklin Roosevelt, on the day Japan bombed Pearl Harbor, gave us hope.

Obama, Biden and Geithner take every opportunity to remind us that our problems are not theirs, but were inherited by them because of the irresponsible actions of the past. Bush and the Congress let things get out of control but Obama and Biden were Senators, Senators with the power to stop the president at any time. And Geithner, he was president of the New York Federal Reserve and also in a position to stop the financial meltdown.

Obama condemns tax cuts for the wealthy saying it has been tried over and over again and failed. Yet two of the most successful tax cuts for the rich were the work of John Kennedy and Bill Clinton and both led to recovery and economic growth. Did Obama forget he is a Democrat?

So now that we have established that Obama and company are not to blame for anything, but Wall Street and the past government are to blame, then what is the real relationship between Obama and the giant of Wall Street Goldman Sachs? Goldman is the only financial institution on Wall Street whose value has shot up since Obama became president, the only firm out of hundreds in the financial sector. What makes Goldman's different? They have the most toxic debt. They championed the oil price run up that nearly destroyed the world economy.

Several years ago they secretly had the Board meet with a young senator named Obama. They quietly financed his presidential bid before most people knew who Obama was. They even had another secret meeting with Obama during the primary campaign and brought in Tom Brokaw to help prepare the new kid for the grueling campaign. The same Tom Brokaw who was moderator of a debate a year later between Obama and McCain but no one knew that they had practiced a year earlier.

So what happened to Goldman's since Obama got elected. Take a look at the fate of some of our major financial institutions in the time between election day November 4 and today. The stock price 11/4 and 2/10 are shown with the percent change.

Bank of America $23.61 $5.56 -76%
JP Morgan $40.73 $24.62 -40%
Citibank $13.99 $3.35 -76%
Wells Fargo $33.80 $16.35 -52%
Goldman Sachs $89.09 $90.40 +1%

While virtually every other financial institution in the market has lost between 40% and 76% in total value only Goldman Sachs has increased in value since Obama got elected. Of course Goldman has also stated they will return the $10 billion in bailout money they received, meaning they didn't need it in the first place or the restrictions Congress is contemplating don't appeal to the firm with the highest executive bonus program in history. When will the president explain his secret relationship with the super bank and when will the media ask about it?

What is the real relationship of Biden with the credit giant Mastercard and Visa headquartered in Delaware, his home, firms whose outrageous credit fees and practices helped lead to the economic crisis and who were bailed out a couple of years earlier when Congress passed bankruptcy reform that stole the rights of the consumer and allowed the credit card companies to undertake collection and debt recovery methods the Mafia could not get away with?

Who was chief lobbyist for the credit card assault by the thugs on Congress, why I believe it was Biden's son who then became State Attorney General. Let's see, the Biden son lobbies Congress to strip the public of their rights and the bill is sponsored by Senator Biden to strip the consumer of his rights and passed by the Congress. No conflict of interest there because that would violate the high ethical standards of the new Administration who is going to change the way things are done in the capitol.

We deserve explanations and we deserve better. The media seems incapable of digging up the truth because the truth is the media elected Obama. Congress can't dig up the truth because the Democrats controlling Congress think they now rule the world when in truth they were bought and paid for by money interests long ago. The Truth is Out There because it sure isn't here on Wall Street, Madison Avenue or at our nation's capitol.

Friday, February 06, 2009

Big Money Now Owns America

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I think this is a pretty good description of the treacherous ground we are venturing down with the financial meltdown and the government response of tossing billions into the mess.

"Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be saved by the government and nationalized; ..."

Big Money gets greedy. Big Money finds new ways to rip off the public like the sub-prime mortgage market. Big Money hedges their bet by secretly backing a future unknown to be president for when the day of reckoning may come. Big Money gets Congress to change the laws and regulations to allow them to avoid being detected as they pursue the illegal deals. Big Money gets too greedy and people can't afford the phony mortgage deals leaving trillions of dollars in losses to be absorbed by someone.

Big Money has now destroyed the US credit market and must change tactics to cover their losses. Big Money manipulates the oil futures market to generate outrageous oil profits to cover the outrageous mortgage losses driving prices to record $150 per barrel levels. Big Money sees chaos as opportunity to drive competitors from the marketplace and suddenly 10 legendary investment banking houses are reduced to two survivors.

Big Money sees chaos as opportunity to finally secure unlimited control and access of the US Treasury and Federal Reserve and tells Congress, whose campaign coffers are inflated with Big Money donations, to pass multi-billion dollar bailout bills. Big Money gets benefactors in Congress to bail out billion dollar losses in mortgage, insurance and banking industries. Big Money realizes they got too greedy and have now nearly destroyed the world economy thus limiting future chances to steal from the government if they don't fix the mess.

Big Money gets unknown candidate for president elected and promptly loads up his team of economic advisors to assure blame is deflected for mess and they control the future of the world economy. Big Money gets Democratic friends elected to control Congress and assure future Big Money prosperity. Big Money gets new Congress to adopt nearly trillion dollar economic stimulus bill to revive the sconomy and increase stock values.

Big Money gets US Treasury to underwrite "toxic" loans of Big Money and their banking partners thus transferring the debt to the taxpayers. Big Money gets Congress to pass home mortgage reforms to bailout all the toxic pending foreclosure losses of the past three years, again paid for by taxpayers. Big Money keeps new president from laying any blame for the economic meltdown, regulatory and oil price manipulation where it belongs thus assuring the continue to dominate the world.

Big Money never even has to tell the government how many trillions of dollars it will cost them to fulfill the economic stimulus, credit restoration, Wall Street welfare and Main Street salvation programs caused by the greed of Big Money over the years. Big Money has now successfully protected their financial windfalls and deferred payment to the next generation. Big Money is now hauling the taxpayer money from their Big Money friends in Congress and the White House to the big banks they own to finance the latest schemes they devise to further the interests of Big Money around the world.

The world is now the Big Money playground and the Treasury and Federal Reserve are now safely secured in the hands of Big Money. That pretty much sums it up. And by the way, the end of the quote and the source is:

"the State will have to take the road which will eventually lead to communism."

Karl Marx, 1867
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Wednesday, February 04, 2009

Cathe's Corner - The View From the Other Side of the Mirror

It's not often we dedicate a column to a reader but it is not often a reader fits the mold of Cathe, the pride of Philadelphia. For all the years in the newspaper and media business I have seen it is very seldom that writers get much in the way of feedback from the readers and in most cases the same person seems to keep writing over and over, someone named Anonymous.

Then there is Cathe. A Philly blueblood through and through, Cathe is one of those rare characters whose life has been mystical, a bit bizarre, most certainly entertaining and something Jane Austen would have died to have written about. In Cathe's world reality and fantasy have been genetically compressed and if you do not meet some very high standards you are cast out with the riff raff and cease to exist.

She loves life. She loves Godfathers. She loves family. She cares about everything. She does not like violence or war. To prove it she married a soldier. He stole her from a blueblood. Then he discovered he had to protect the nation and her. Why did she marry a soldier when she didn't like wars and violence? It seems Cathe had a rebellious streak and she was just trying to teach her parents a lesson.

I guess she figured if she threatened to elope with a rifle carrying soldier instead of having a huge family wedding with an ascot wearing blueblood they would react in horror and promise not to cutoff her chauffeur, maids and cooks when she finished college. She underestimated her dad who simply responded, "That's great darling, be sure to let us know where the wedding will take place."

It was not the response she expected. She got the soldier and lost the chauffer, maids and cooks. She might be the only person you ever meet who had never driven a car, made a bed, picked up her clothes or cooked a meal on the day of her wedding. Needless to say the soldier was more than a little surprised but he was the one who pursued her relentlessly before she ever agreed to go out with him. It was all his fault to begin with.

Imagine moving into your first apartment and being asked by your new wife when the interior decorator would be there, what all those pans were for and where was the nearest dry cleaner. Our military might get a decent pay but her needs required a trust fund for a dowry and that was not one of the wedding presents.

To the new bride if the chef wasn't preparing the meal at home then eating meals was going to your favorite restaurant and putting the bill on daddy's account. She had no idea what a credit card might be, nor the cost of the meal as she never bothered to look at prices on the menu. Even the grocery store was a mystery to her, food was supposed to magically appear in the pantry and on the dinner table. Her driver took her back and forth to school or where ever else she wanted to go.

Somehow Cathe and the Godfather survived that start in life. Her hubby made a career of the Navy while seeing the world. They spent a good deal of time in Sicily, the place off the coast of Italy, which seems an ideal post for an Italian American and his bride. In time they went on to build an entire life and family where fantasy always trumped reality. He survived her. She survived without the servants. And they are now happily living in St. Mary's County, Maryland and Cathe can be found at the Vintage Source, the world's most unusual antique center and social club.

Of all my readers Cathe is the most inspiring, most persistent, most demanding and most rewarding as my articles are distributed by her to a host of family and friends throughout the country and when I don't get new articles written she is the first to protest the lack of news. As a result, this column is dedicated to Cathe and all those like her in the world who never stop thinking about ways to help people and never lose their quest for information and/or entertainment.

Obama Cabinet Nominees Spoil New Criminal Rehabilitation Program

Just when we thought the highest ranking appointees in the Obama Administration were going to constitute the most elite criminal rehabilitation program in the nation two of the three charter members withdrew from consideration this week.

Treasury Secretary Timothy Geithner, who failed to pay $43,000 in back taxes until his Senate hearing, was first to make it through the process in spite of the tax problem. Obama said it was no big deal and Geithner said he didn't understand that he owed the taxes, a bit scary for the next head of IRS. What would happen to you if IRS discovered you did not pay $43,000 over a four year period? Geithner gets to be US Treasury Secretary. You would get federal prison.

Then along comes Tom Daschle, the former leader of the Democrats in the Senate and Obama's nominee to fix the health care mess. Seems he was paid over $5 million for lobbying for health care companies in a couple of years though he never bothered to register as a lobbyist. That was okay with Obama. But IRS said he owed $143,000 in back taxes for failing to report a full time car and driver paid for by his lobbying firm. He paid that and once again everything was okay with our new king of clean government President Obama and he urged the approval of Daschle.

Would you get a cabinet post with Obama if you owed $143,000 in back taxes? Once again federal prison would be more likely. A third key Obama appointee, Nancy Killefer, picked for what he described as the most important new post in his Administration, the government's first Chief Performance Officer, then had to acknowledge she also owed back taxes but just $946.69, a miniscule amount compared to the tens and hundreds of thousands owned by the old boys.

Nancy did the right thing, she immediately withdrew from consideration. Thus one of the most prominent female appointees of Obama was the first to recognize her civic duty and dropped out. A few hours later Daschle followed suit, even though Obama and others all agreed it was not significant enough to warrant withdrawing from the race. So far the new Obama standard is key employees are okay as long as they don't steal more than $143,000 from the government.

On Jan. 21, the day after his inauguration, Obama issued an executive order barring any former lobbyists who join his administration from dealing with matters or agencies related to their lobbying work. Nor could they join agencies they had lobbied in the previous two years.

However, William J. Lynn III, his choice to become the No. 2 official at the Defense Department, recently lobbied for military contractor Raytheon. And William Corr, tapped as deputy secretary at Health and Human Services, lobbied through most of last year as an anti-tobacco advocate. Before the ink had dried the first waivers of the brand new executive order had to be granted to allow lobbyists to join his staff in top agencies. Didn't Obama get a lot of mileage smearing John McCain for having lobbyist in his campaign?

It just seems that those campaign promises for a new way to govern free of the influences of the past don't seem so real now. A new level of ethics promised has not materialized. In fact, far more promises have been broken than kept in the early part of the new regime. If there was any doubt about this ask the United Auto Workers at General Motors. The union was one of Obama's biggest supporters and were promised a bail out for the auto industry and told by the new president they were the priority of his administration. Today GM announced one third of the UAW workers must be laid off. That does not sound like they are being protected by the new president.

Tuesday, February 03, 2009

The Day the Music Died

Today, February 3, is the 50th anniversary of the day the music died in America. On a cold winter night in Iowa this night in 1959 Buddy Holly was killed in a plane crash in a snowstorm after leaving a concert in Clear Lake, Iowa.

Holly is considered the single most influential creative force in early rock and roll. His works and innovations were copied by his contemporaries and later musicians, notably The Beatles and The Rolling Stones, and Buddy exerted a profound influence on popular music. On April 15, 2004, Rolling Stone magazine ranked Holly #13 on their list of the 100 Greatest Artists of All Time.

Also on the private charter with Holly were the Big Bopper and Richie Valens. Holly's death was immortalized by the song The Day the Music Died.

I was a huge Buddy Holly fan while growing up in Iowa. One time I played Oh Boy, a Buddy Holly hit, 43 straight times on a juke box to honor his death much to the chagrin of the country club members in the club Canteen who didn't like country music.

On that fateful night in 1959 I had tickets to the Buddy Holly concert, a drive of a little over 100 miles away, but the snow storm that killed him kept us from reaching the venue. It was a night I will never forget and I will always be sad at how close I came to witnessing his last performance in this world.

Buddy Holly belongs to the ages but his music belongs to us.
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