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The Need to Keep One's Head....
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Freedom of Speech at its best
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Should the Adminstration Be Believed?
As the week came to a close, the markets continued their recovery. Wells Fargo Bank had records profits and Ford cut its debt. But, unemployment has continued to rise. The International Monetary Fund has estimated worldwide losses at somewhat in the neighborhood of 4 Trillion Dollars.
In the United States, losses by US State and Local Pension Funds are estimated to be at approximately 40 percent of the 2 Trillion Dollars held by the 2600 Pension plans that pays out pensiosn for retired teachers, police officers and firefighters.hese pension plans are selling their assets at fire sale prices trying to make their pension obligations.In the midst of this mixed news. I continue to be concerned about Congressional Budget Office estimates on the actual costs of the proposed Budget Blueprint. The deficit is projected to be 9.3 Trillion Dollars over the next decade. It will average 5.3% of the GDP--something that the President's Budget Director himself concedes is unsustainable
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We must never, ever forget!!!
Whenever someone dies, it is always a sad moment. Life is the most precious resource granted. The death always leaves a void. Although I have continued to believe that we are all passengers in this journey of life, the emptiness will never overcome. I view it as ever more tragic for the heroes who have paid the ultimate price while serving in wars in faraway lands. This includes Americans, Canadians, British, Australians, German, French and other NATO and coalition members who have strived to eradicate the extremism that continues to grow like a cancer.
When President Obama came into office, he directed Secretary Gates to leave it to the families to decide whether to allow coverage of their fallen coming back home. Mr. Gates decided to leave it up to the families. The first coverage was of the latest fallen hero, U.S. Airforoce Staff Sergeant Philip Myers
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Why was this allowed to happen?
In the midst of all the continued bloodletting I have written, I was especially shocked to find out that the man in charge of the Pension Benefit Guarantee Corporation decided to move its' investments to stuff like hedge funds and other riskier investments. The fund appears to have lost substantial sums. What is troublesome is that this is the fund that guarantees defunct Pension Funds which continue to pile up as the US Economy continues to implode. I could only think what would have happened to the Social Security Trust Fund if George W. Bush would have succeeded in moving monies into the private markets. Why was this allowed to happen? Why weren't safeguards in place? Where was Congress in all of this?
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Although Funny...it may well be scary.....
I find the recent spat between Jon Stewart and Jim Cramer and Meghan McCain and Ann Coulter hillarious to say the least. Bill O'Reilly talked about it in his Factor show on Monday on Fox News. He talked the Cramer vs. Stewart feud with Stewart Varney of Fox Business and on Meghan McCain vs. Ann Coulter with a reporter for the Washington Times.
I saw Jon Stewart's show, I saw Jim Cramer's "response when he appeared on MSNBC and NBC and then Jon Stewart's rebuttal. Jon Stewart nailed Jim Cramer. There was no question about it. But, O'Reilly's way of lambasting Stewart for going after him for being "liberal" and "mainstream" is a bit far-fetched. What O'Reilly and the folks at fox forget to tell the rest of the world is that they were the "mainstream" during the 8 years of the Bush Adminstration. They pushed this fiction that markets work and self-regulate and had to be left alone. Well, this so-called conservative philosophy (as they call it) was in fact the cause of the economic winter we are faced with today. Bernie Maddoff and Allan Stafford are but the most extreme of examples. But, the entertainment nature of CNBC was also just as much to blame in my view. Jon Stewart called Jim Cramer on it. I do commend Jim Cramer for agreeing to appear on The Daily Show later on tonight. That should be quite interesting. But, this fiction of a liberal bias that Bill O'Reilly continues to push gets to be old. It is entertaining and funny, though. Cramer made some bad calls and he has to own up to it
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The Battle Lines Have been Drawn
The President's Budget Blueprint has been released and is now available on http://www.omb.gov, the Office of Management and Budget Website. It is 142 pages long. There is a big gap between capacity and the ability of businesses to produce right now. Government has to be the purchaser of last resort. The blueprint has begun this process.
Understanding this blueprint will take a while. I will not take what the Republicans or the Democrats say at face value. I do welcome a number of initiatives. For instance, I think that in the spirit of "Smart Government" that I advocate, some of the weapon systems is clearly not geared towards war in the 21st Century. The one weapon system is the F22 Raptor. There are jobs at stake. But the F22 has not seen one day of action and is suspectible to be brought down by a single missile. It seems to me that at $ 140,000,000 per plane, the taxpayers can get a lot better bang for the buck by investing it in drones. From the recent testimony I have seen Secretary Gates give before the Congress, he is in agreement with this. There are many other places where we can look at doing things differently
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No One Knows What Will Happen?
There is only one sentence to describe what happened in the markets on Monday: It was a dismal day. The Dow dropped down to 1997 levels. There were some discussions by analysts that markets may even drop to the 6500 level before any "turn-around" is evident.
Barack Obama hosted the Congressional Leadership at the White House and took questions. Today was the day when he addressed his goal to half the deficit by 2013. I commend him for this stance. But, with the exploding cost of Medicare and the continued stress on the financial system, it is going to be a tall order. In addition, there is of course the two wars in Iraq and Afghanistan. I view the committment to be more transparent in the budgeting process as a signifcant move in the right direction. I have continued to be bothered by how the Federal Government did not count the costs of the wars as part of the overall budget
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An Interesting Development
The stimulus plan continues to be the talk of Washington as the Governors gathered for their conference. Apparently, Sarah Palin has been a no-show. I do find that interesting. Governor Palin has been quite busy, though.
I made the rounds of the Sunday talk shows to see who was there. ABC and CNN had the California Governor, NBC the Louisiana Governor and the Florida Governor and CBS the US Housing Secretary. Quite a few Republican Governors have spoken up against the stimulus and said that they would refuse some of the money. I commented on Governor Jindhal's decision a few days ago. Most of them (Jindhal, Barbor and a few others) are ambitious and want to be President. As I saw Jindhal on Meet the Press, he was focused on his talking points: lower taxes and smaller government. I hope Jindhal succeeds in Louisiana. Louisiana needs someone who is commmitted, honest and knows what he is doing. They seem to have one in their present Governor
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The Verdict Is Still Out.....
The President's Stimulus Plan has made some headway. The U.S. House and Senate Conferees have come to an agreement. There are tax cuts and aid to the States. I am especially gratified to see that California may be getting monies necessary because of the predicament I just wrote about. My local school district has to find 38 Million Dollars in Cuts. I am seeing reports of teachers throughout the country being laid off. This is reality that the Republican do not seem to realize.
The three Republicans who participated in the Deal (Arlen Specter, Olympia Snow and Susan Collins) may be considered RINO's by the tried and true Conservatives. I consider them Americans because they seem to realize that we have an emergency. I salute them for their courage for having gone against the orthodoxy that the Republican Leadership seems to have laid out to oppose it
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Another Day In Paradise....
Mr. Obama went on the road today to sell the stimulus. He went to Indiana and then onward to Washington for his primetime news conference. He is making the push to get this in place soon.
While Mr. Obama was on the stump, everything continues to fall apart at the extremes. The bad news keeps getting worst. Nissan came out with an annoucement that 20,000 people are losing their jobs. The U.S. National Retail Federation has come out with a report stating that retail store inventories will be falling by 11.8% for the first half of 2009. The Baltic States in the former Soviet Union are seeing their economies literally falling apart. Riots have been happening in Latvia and LIthuania. According to Fitch Ratings, European and Middle Eastern Companies are slashing capital spending by at least one third. Sales of Personal Computers are slated for their first drop in seven years. The U.S. Government is out with record amounts of debt it is trying to sell. The yields are starting to creep up which is another cause for worry. The most worrisome of all, for me, is the financial predicament of the States. California still does not have a budget. Other States are faced with budget shortfalls as far as the eye can see. States are faced with stark choices
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How scary will it get? I just don't know.....
The debate on what to do about how to jumpstart the US Economy rages on. I personally have received appeals from both Senator McCain's new CountryFirst PAC and President Obama's Organizing for America Organization. The roundtable held earlier between four leading lights of the U.S. Congress on NBC's Meet the Press underscores this divide.
As the debate continues, teachers, fire fighters and cops are on the chopping block. States are in dire straits. California continues to operate without a budget.
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A Ray of Hope, Perhaps?
Earlier, I reported on an agreement in the U.S. Senate regarding the proposed stimulus plan to jumpstart the US Economy. I was pleased to see that the recovery.gov website is ready to go already. The need to get going on the day after is more critical than ever. I am of the view that is going to get worst before it gets better.
As the debate has gone on in Washington, two banks failed today. A bank in Georgia and a bank in Culver City California were shut down by Federal Regulators. Emerson, a major conglomrate, announced around 14,000 job cuts. California continues to be without a budget. Today saw over 200,000 California State Workers being furloughed. It is a shame that there is no budget after six months. The Dow was up as a sign of hope that the stimulus will be adopted. Maybe the markets know something
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..and the hits keep on coming.........
In my almost daily columns/comments on the Economy, I had thought about the calamity as a Tsunami. With a Tsunami, there is at least a chance to see Sunshine. However, I think the better term for it is a Winter Storm. I continue to wonder when we will see sunshine.
On Wednesday, the bleeding continued. Cisco Systems, the leading network gear maker, missed the numbers. Alcatel-Lucent continued its' downward slide which has been on-going for a number of years. Disney missed then it came out with its numbers and annouced jobs cuts totaling some 400 workers at the ABC unit. Earlier in the week, Electronic Arts annouced a job cut and delay in new games
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When will the bleeding stop?
Although the Dow went up today, the bleeding has continued. Over 70,000 job cuts have been announced. This include massive cuts at Catepillar, Sprint/Nextel & Phillips. Auto Suppliers are getting ready to go to the Federal Government with a request for $ 10 Billion. To add insult to injury, Citigroup is about to take delivery of a $ 50 Million private jet.
Right now, The President has been given $ 350 Billion to Spend. He is pushing for another $ 825 Billion. Out of that, about $ 500 Billion is cash. So, he'd have a Trillion Dollars to spend. I will be many who will be holding his feet to the fire in terms of transparency. We will need to figure out how to jumpstart the economy. So far, nothing has worked. It is scary to see what is going on right now. The President spoke to this on Saturday during his weekly address. I wonder if the Republican Leadership was listening or truly understood what he was saying when he met with them at the White House. What he said was clear enough
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Is the Obama Plan Bold Enough?
I was listening to NBC News' Meet the Press. It appears that the Republicans are beginning to be obstructionists. The House Minority Leader acknowledged that there is a difficult economy. But, he thinks that the Economic Package will not work. The Adminstration believes that this is rightly sized. Larry Summers said it clearly so during the NBC interview:
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May we truly live in interesting Times....
I have been come to grips with all that has been going over the past day or so. Between the Rick Warren Controversy, the Price of Oil, the continued saga of the Auto Industry and the turmoil in the Middle East, it has been quite a ride. Oil has steadied at $ 36/Barrel. That is almost 1/4 of the the price just six months ago. This is good news. But, the problem is that we will become complacent. I have warned about this before and I know based on history it will happen again. Many countries in the world will also be closer to the edge of the abyss because of this.
I changed the title to reflect the commentary on what we're faced with. Right now, reports are coming in that Rio Tinto, the big Australian miner, is about to cut 14,000 jobs. Worst than that is what is happening in the Democratic Republic of Congo. It is estimated that over 300,000 people have lost their jobs in the province of Katanga that produces the basic stuff that we all yearn for (Cobalt, etc.). The average guy who went into those hell holes to squeeze out a living is the only one losing. I think this should be an opportunity to see what alternatives can be available. I continue to wonder how long can we draw on this credit card called Earth. Suppose Cobalt goes out..what can we do to replace it? The problem with Oil seems to not have taught us anything. There is talk of a $ 1/Gallon of Gas. I welcome it. But, the problem is that people have short memories and will get back on the road until the spike occurs. The spike will occur.
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Can anyone do anything about it?
I can't help but be worried. As I continue to write about our world, I want to remain hopeful. But, the bad news continues coming in. The Dow lost over 300 points on Friday. As America continues to be in the midst of a Presidential Campaign, the world seems to be falling apart. BBC is reporting on a very disturbing development in Colombia threatens to undermine all that seems to have been achieved in the so-called war on drugs. A number of Army colonels have been sacked because they apparently kidnapped homeless men and then killed them to secure body counts and in turn promotions. Colombia was the same country, of course, that pulled off the release of Ingrid Betancourt and others using the emblems of the International commitee for the Red Cross. I view it as a bothersome development because it will undermine the very perilous nature of achievements made in the war on drugs that the world seems to be losing. Look at what is going on in Mexico. I regard Uribe as the ultimate teflon, though. I think he would muddle through as he has through other crisis.
The more worrisome development, though, is the killing of foreigners in the center of the Afghan capital, Kabul. Afghanistan is on fire. Karzai is useless and is a lost case. I am heartened by Joe Klein's comments on Time.com about Barack Obama's views. According to Klein, Barack Obama (and General Petreaus) are in favor of negotiations with the Taliban. I would be interested in any alternative anyone could offer. Right now, I see none
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Mike Pouraryan
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