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The Need to Keep One's Head....
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The Terrain is scary.....
Workers continue to be worried as reports of layoffs and missed earnings keep coming. One such law in California to at least help mitigate the shock is the California Worker Adjustment and Retraining Notification Act. The so-called WARN ACT requires certain employers to give affected employees at least 60 days advance written notice of an intended plant closing or mass layoff. 147 companies will either have a mass layoff or an outright plant closing during this month alone. For instance, in January 2009, a major regional hospital in Orange County California filed to shut down with some 500 employees. Things continue to move in the wrong direction.
As for the sickly auto industry, I reported on the drastic measures being taken by Chrysler to pare its' dealer network. When the folks are not buying the cars, there is no reason to support such a extensive network. My initial estimate of the number of jobs lost was apparently way understated. The estimated job losses are slated to be around 38,000 people. GM is also right behind Chrysler. They are cancelling 1100 dealer contracts. The National Automotive Dealers Association is politically connected. After the dust is settled, only the major players (Penske, AutoNation) will survive. All others will fall by the wayside
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Freedom of Speech at its best
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A Sign of Desparation, Perhaps?
Today Eric Holder was before the U.S. Senate Subcommittee on Appropriations for the Justice Department to discuss the FY 2010 Budget for the Justice Department (Source: Really Long Link retrieved 5/7/2009). Not withstanding the usual mundane testimony, I found one particular question by Senator Alexander of Tenessee quite funny. As the country continues to come to grips with the debate over torture, Lamar Alexander threatned to start investigations about what the Clinton Adminstration (including the Attorney General) knew and approved about torture. My initial reaction was, wow!!!
Up to today, I viewed Lamar Alexander as a reasonable guy. But, I suppose he has to march in lockstep with the Limbaugh/Savage/Hannity wing of the Republican Party so that he won't be thrown under the bus. What Lamar Alexander and the Republicans are working on is to basically whitewash the sins of the Bush Adminstration by blaming everyone else. What Lamar Alexander showed today was a total disregard of the past 8 years and what the country has gone through. The Republicans wrecked the Constitution and banrkupted the country. If they want to present a constructive alternative, I welcome it. I am yet to see one. All I see are empty slogans and discredited old arguments
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It will be quite a Day!!!!
The results of the bank stress tests are due later on Today after markets close. I have seen reports that a number of the banks will be forced to raise additional capital. For instance, the number I have seen for Bank of America is 33 Billion Dollars. The number for Citigroup is around 50 Billion based on the reporting I have just seen from the Financial Times.
The numbers that are being talked about are scary. The remaining funds in TARP I are around 100 Billion Dollars only. The scale of the need for capital means that there is going to be a need for TARP II. Although some members of the conservative community do not wish to hear it, the need for nationalization of the institutions is becoming ever more vital now. The U.S. Treasury has given some 45 Billion Dollars to Bank of America so far. The fact that it requires a further 33 Billion Dollars means that the Bank is not a viable going concern in its' present form. The math simply just does not add up
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Will Republicans Listen?
Jack Kemp died of Cancer last night. For those who do not know who he was, he was a Quarterback for the Buffalo Bills who went on to have a very successful Political Career as a Member of the U.S. House of Representative, Cabinet Secretary and Vice Presidential Nominee. He helped to pass Ronald Reagan's First Tax Cut along with the late William Roth of Delaware.
Although I have had fundemental disagreements with his views on Government, I respected him because he understood how to reach out to others. He believed in the Republicans having a big tent. He understood before many how America was changing. He talked about it in this Meet the Press interview with the last Tim Russert
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Can Something be saved?
Chrysler and Fiat have joined a partnership!!! 30,000 jobs are being saved at Chrysler. The Governments of the U.S. and Canada have committed to making it work. The continued transition is going to be painful. Today is one such day. Chrysler will declare bankrupcy, though.
The President is continuing to speak on this annoucement. The United Auto Workers stepped up. Lenders have stepped up. I was especially surprised at the sacrifices by the Union. Some who were sceptical about the Unions should now see how the Unions did their part fo the sake of saving jobs, healthcare and pension. If only the banks and the hedge funds did their part
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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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Reality Has Arrived....
Bob Gates, the U.S. Secretary of Defense, has begun a process to truly transform U.S. Defense Policy. I have written about the F22 and the analysts who have attacked how useless the plane is. We have to truly think about Smart Government in the era of limited means. For a country that continues to fight two wars with no end in sight, the country has to change its stance. The Secretary's bold move to transform the defense budget has begun this process.
As this debate begins, the opposition will be fierce. Senator Inhofe of Oklahoma has come out with a YouTube Message accusing the Adminstration of disarming America. There will be others on the so-called right who will be just as strident and bellicose in their rhetoric without realizing the true realities going on. I view Mr. Inhofe's pronoucement as not truly credible simply because of his role in delaying plans to deal with global warming due to his scepticisim and belief that somehow global warming was an "act of god". I think that Mr. Gates understands what needs to be done. If there are concerns, I expect it to be on the merits. If the human capital is the concern, I am certain that they can be reassigned to other projects and initiatives. As it stands, America will still spend more than the entire rest of the world combined. Taking advantage of Smart and Innovative ways to adjust to the new realities is the right and responsible thing to do. I see no other way.
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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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Lessons On What Not To Do.....
As I have written about the Econmic Winter of our times, I have also continued to witness quite a transformation despite the challenges all around us. I view the transformation in the technology space as nothing less than spectacular. As a "Twitter" addict, a facebook "fan", and a committed writer/blogger, I am excited about the possiblites. I was witness to Sun Microsystems meteroic rise to be the darling of the IT world during the dot.bomb era. I cut my teeth writing my first email on a Sun Sparcstation 2. I was also witness to the spectacular fall when the bottom fell out back in 2000.
Since the internet bubble burst, Sun Microsystems has tried to figure out a reason to live. It has attemptef to be the go-to vendor for open source by buying the leading open source database player (MySQL), it made a signifcant investment in storage by buying a major storage player (storagetek), yet it has failed to gain any traction. It has a large installed base and a signifcant service business. But, it appears that the days of it being an independent major player has passed. I view Sun as a company about potentially what may have been. I think that it is another symbol of the very transformation that we have had to deal with throughout the last number of years
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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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Is the Message Coming Through?
I have been making the rounds of the Sunday Talk Shows. NBC and ABC had Tim Geitner on and CBS' Face the Nation had the President on as well: (available at http://www.cbsnews.com).
As I listened to the Face The Nation Interview, I was glad that Bob Schieffer brought up Mexico. I have regarded Mexico as the soft underbelly that is indeed a major threat to the security of the United States. I did also find Meet the Press quite insightful in explaining in layman's terms how the plan is supposed to work. As I listened to all the shows, the central message I heard was that the Obama Adminstration views the strategies on both the economy and Afghanistan was on track. Time will only tell
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Quite a Performance.....
The President had a busy day. Earlier, he hosted a conference call at the White House with some school kids and some members of Congress. They were talking to the crew of the International Space Station. What was cool to me was their access to email and the fact that they were able to call him using Voice-Over-IP technology. This is the exciting stuff going on. I am sure the kids were blown away by it. I know I was.
Later on, I caught the President's news conference. It was part of the full court press he had when he came out to California, went on the Tonight Show, had a 60-Minute Interview and even went on ESPN. As I listened to the news conference, I found someone who was in command of his facts and understood the magnitude of the problem that the country faces
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Cause to Celebrate? Hardly......
The Dow went up almost 7% today. The rally was quite spectacular. It was in response to the U.S. Government's plan to buy up to a Trillion Dollars worth of Toxic Assets to help get lending going again.
Although Paul Krugman noted that "..Zombie Ideas have won...", It is frankly gratifying to write about some good news after so much bad news that has been out there. I have written weekly about the Economic Winter we have had over the last number of months. The U.S. taxpayer will guarantee any monies put up by private investors against any downside risk. To me, It is quite a deal for anyone who has money to invest. Yet, what bothers me is how the underlying fundementals of the banking system remains shoddy and broken and has to be changed
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We can use the "Luck of the Irish.."
Tuesday was St. Patrick's Day. Irishmen all around the world celebrated this day!!! Although it was a beautiful day, it was a day that continued to be tempered by all the continued challenges we face in our world.
There has been enough fury and discussions at the bonuses that was paid out by AIG. It appears that there is not much that can be done. I was at least glad to see that apparently the U.S. Treasury has decided to "wind down" AIG in an orderly way. Hank Greenberg came out today noting that he would not have paid out the bonuses and if anybody wanted to sue, he would sue us. I was glad to see that he agreed with my assessment. Based on what I was to learn subsequent about Hank Greenberg, it appears that if he was there, he may have taken the action necessary to avoid this catasphore. His successors sure saw to it that the company was driven to the ground--and by extension, faith in the U.S. economy
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Some Basis for Discussions....
Newt Gingrich has annouced his 12 solutions for America. I found the 12 solutions to be full of ideas for the future. Here is how he talked about it on his American Solutions Website:
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I wrote about the profound concerns about the California Budget. I wanted to assess how the new stimulus plan will help California. California, for instance, is slated to receive around 11 Billion in Educational Funding alone. Funds are starting to be distributed. I am particuarly keen to understand how the 11 Billion Dollars slated for California is going to trickle down to the local level.
Right now, the Capistrano Unified School District in Orange County, California is faced with a 38 Million Dollar Deficit. They are slated to make substantial cuts. According to the California Teachers Association, Twenty Six Thousand Teachers were slated to receive pink slips. As California has already launched its' companion website, available at: http://www.recovery.ca.gov/, I will be looking into the 11 billion dollars and how it is going to be spent
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Serious Stuff Indeed!!!
The talk of the media during the past week was Cramer vs. Stewart. Jim Cramer is the host of Mad Money on CNBC and Jon Stewart is the host of The Daily Show on Comedy Central.
Stewart went after him and rightly so!!
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What other shoe will ever drop?
I had hoped to leave behind the Bush years in my writings here. Yet, it appears that the actions by the Bush Adminstration will continue to be the talk of the nation for a while yet.
I have been reading with horror comments by Seymour Hersh about what had transpired about an alleged assassination squad. The accumulation of power is quite scary. I realize that the reporting done here by MSNBC is biased. Between the John Yu memos and this allegation, it shows an apparent debunking of the Constitutional Form of Government during the past eight years. Not withstanding the political tone of it, the mere fact that this kind of "command" existed should be of concern to all
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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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Who is right? Who Knows/
The Sunday Talks shows on US Network Television featured quite a number of political and media personalities. As I attended the NBC and ABC's webcast, I was trying to find an alternative vision that the Republicans offered. Lindsay Graham and Richard Shelby only said that they were opposed. Beyond that, I did not hear any concerte solutions to get this economy jump-started again.
NBC also featured New Ginrigch. He is probably the leading Republican thinker right now. He also brings a historical sense of it all, having been a Professor of History. I was gratified to hear him say two key things: 1) The Economic Winter we're contending is nothing like we have seen before & 2) He does not want to see the President fail. In my view, these two key things are a solid basis to talk about a constructive vision of the future. I found his contention that the proposed tax increases as equivalent to the smooth-Hailey Tarriff Act a bit of an overstretch. I also think that the advocacy of doing nothing is also quite distrubing because of the disastrous decision made by Herbert Hoover
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The Market (Courtesy of Bigcharts.com)
I was monitoring the markets as they opened on Monday. As this chart (Source: http://www.bigcharts.com, retrieved March 3, 2009) shows, the market has been at its lowest points since the mid 90's. I see no "end" to the blood letting in sight
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...we should all listen!!!!
Dr. Doom (aka Nouriel Roubini) was just interviewed by France24 (http://www.france24.com). He was one of the few economists who foresaw this Economic Winter we are faced with. A startling statistic he noted was that US Banks have a capital shortfall of some 1.5 Trillion Dollars. Furthermore, his assessment was that the U.S. Financial System was under government control. The guarantees extended by the Government is some 9 Trillion Dollars.
The argument of whether we're socialists now is pretty much settled. Nationalization has happened for all intent and purpose. Citigroup was the first to fall. Right now, AIG is getting a 4th bailout. Others are in trouble. I predict that The Obama Adminstration will make the decision in relatively short order to formalize this and work to get it cleaned up. There is no other way out.
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They have some work to do.....
Rush Limbaugh's key note at CPAC was quite extra-ordinary and entertaining. I found this excerpt posted to his website especially interesting when he talked about the President:
"....Now, let me speak about President Obama for just a second. President Obama is one of the most gifted politicians, one of the most gifted men that I have ever witnessed. He has extraordinary talents. He has communication skills that hardly anyone can surpass. No, seriously. No, no, I'm being very serious about this. It just breaks my heart that he does not use these extraordinary talents and gifts to motivate and inspire the American people to be the best they can be. He's doing just the opposite. And it's a shame. [Applause] President Obama has the ability -- he has the ability to inspire excellence in people's pursuits. He has the ability to do all this, yet he pursues a path, seeks a path that punishes achievement, that punishes earners and punishes -- and he speaks negatively of the country. Ronald Reagan used to speak of a shining city on a hill. Barack Obama portrays America as a soup kitchen in some dark night in a corner of America that's very obscure. He's constantly telling the American people that bad times are ahead, worst times are ahead. And it's troubling, because this is the United States of America
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We're Living in Interesting Times
The week has been an interesting, fun and exciting week. It started with Barack Obama's Speech to Congress, the release of the budget blueprint and then culminated with the Conservative Annual Lovefest at CPAC in Washington. Barack Obama also announced plans to remove troops from Iraq. I found John McCain's support to be surprising. Yet, the Democrats were not happy. There was of course Tavis Smiley's State of the Black Union in Los Angeles. I saw Michael Steele there as well. MIchael Steele continues to interest me a great deal.
CPAC's Congress has interested me a great deal. I have been reading with great interest the speech by Rush Limbauagh, who is the "man" in talk radio. I saw other conservative luminaries come out to make their case. I almost fell out of my chair when I heard Rick Santorium throw George W. Bush and John McCain under the bus
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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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A Lesson For Us All......
The Camerons w/their late Son Ivan
Ivan Cameron died earlier on Wednesday. He had celebral palsely and epilepsy and died of complications. He was the son of David and Samantha Cameron. David Cameron is the leader of the UK official Opposition, the Conservative Party. Mr. Cameron called him his "beautiful boy". He was only 6 years old
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Quite a Scene!!!!
Mr. Obama went before the Congress to speak on the State of the Nation. He began by reminding the country and the world about the crisis America faces, but he said that "..we will recover". As I reviewed a preview of the speech on the White House website, I was moved by a quote form Ty "Sheoma Bethea, a 8th Grader from South Carolina. She is a student in a run-down school. She took to writing to her members of Congress asking for help for her school. She borrowed the money from her principal to mail out the letter. She reminded the members of Congress that , "....we're not quitters". This is what the American Spirit is all about
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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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Some tough decisions have to be made....
I have just seen a disturbing report about Citigroup negotiating with the Government about the Government taking a 40% stake in the Bank. As I see it, it is nationalization for all intent and purpose. When the entire market capitalization of Bank of America is 19 Billion and the Government has extended 45 Billion Dollars already, that means that the Bank has been nationalized.
As I await the President's message on Tuesday, I am trying to assess why The Adminstration is not considering the Swedish Model of the 90's and subsequently reorient the banking sector so that it is somehow like the Canadian Model. Canadian banks are among the healthiest banks in the world. The Tier 1 Capital ratio is quite healthy and it can indeed be a model to follow going forward. There are successful models to follow. We can't afford to live through what Japan lived through during its lost decade of near depression
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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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As the stimulus plans begins to work its' way through the economy, the continued suffering continues. The news continues to be dreadful. There is the drop in Japan's GDP--some 12.7%. Spain's economy is in dire straights. The unemployment rate is forecast to be at 19.5% and the deficit at 6.5%of GDP. There is talk of a depression in Spain. Moving on to Russia, there is the drop in Russian Industrial Output of some 20%. Dmitri Medevedev seems to begin to get it. He came out criticizing the Government (headed by his old boss Vladimir Putin) and had already fired four Regional Governors.
The United States continues to be on the edge of the abyss. John Laing Homes, a major home builder, declared bankrupcy this past week. Markets continue to be spooked. The market dropped 100 points on Friday alone. Gold topped $ 1000/Ounce
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A Sore Loser, Perhaps...or a true expression of Republican Sentiment?
Alan Keyes came out and said that he does not recognize Barack Obama as the President. He asserted that military officers are going to court to say that they will not obey the orders of their Commander-In-Chief. I wonder what is prompting such comments by him.
The issue of the Birth Certificate was put to rest a long, long time ago. The man is an American and why Alan Keyes is pushing this fiction is beyond me. Many made the same argument about George W. Bush. I have disagreed vehemently with his policies, but I still believe that he should be accorded the due respect for having occupied the highest office the people of America can bestow upon any man or woman. Mr. Keyes is extremely irresponsible in his views and should figure out a different way to express his views. I wonder if he understands that
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What can be done for an Encore?
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This is not a joke anymore.....
The stimulus passed, Recovery.Gov is up and running. Yet, there seems to be no confidence in the markets.
Let's just see what has happened over the last few days
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Now the Real Work Truly Begins.....
The Congress has passed the Stimulus Plan. I was getting the twitter updates throughout the day as the proceedings continued. Three Republicans (or as the Repubicans say RINO's) joined the Democratic Caucus in voting to enact it. The U.S. President is slated to sign it into law on Monday.
I view the three Senators who voted for this as courageous. Olympia Snowe, Susan Collins and Arlen Specter have gone against the grain consistently. Olympia Snowe and Susan Collins are two Senators who are from the Republicans of years past as the party evovled. Arlen Specter gained my respect when he grilled Alberto Gonzales during his disastrous tenure at the Justice Department. Olympia Snowe and Susan Collins don't have to worry about their consitituents. Arlen Specter will probably have a fight on his hands as he faces re-election. But, the man has faced down cancer, twice. One of his nemesis in his home state called him a houdini
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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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I saw the speech by the Secretary of the Treasury. From what I gathered, it promised a three-prong approach to re-do the TARP and insure that it is made more transparent. It also promised a comprehesive plan to deal with the housing crisis over the next few weeks.
As I listened to the speech, I viewed the speech as all well and good. The price tag was shocking, though: 1.5 trillion dollars. They're going to have to find the money somewhere. What was also startling to me was the fact that 8.7 Trillion in monies has been pushed into the financial system by the Federal Reserve. I wonder where all those monies have gone. Right as Geitner spoke, the markets tanked!!! The Dow lost almost 400 points. So, The markets spoke and they were not too happy. Although it is good news that the U.S. Senate adopted its' version of the stimulus plan, it still has to be reconciled with the house. So, we will end up losing more precious time. To underscore how precarious things are, GM announced another cut of 10,000 workers. I wonder who they will have left after all the cuts
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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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He Did the Right Thing.....
There is breaking news that Tom Daschle just withdrew as nominee for the Department of Health and Human Services over the taxes controversy. This is on top of the nominee for the Deputy Budget Director over an apparent tax lien that she had to pay out. Everyone seems to understand the higher standards expected of our public servants. I commend Tom Daschle for having done the right and honorable thing. I hope that he continues to find other wasy to serve.
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The Bad News Gets Worst!!!
The new month continues the bad news we have been subjected to since mid-2008. Right now, Ryannair has posted a loss of 130 Million Dollars for the final 3 months of 2008. Ryannair is oen of the leading budget airlines in Europe, based in Ireland. Going around the world to China, China has just come out with a report noting that some 20 million Chinese workers no longer have jobs to go back to. According to the statistics reported, this represents 15% of the workforce.
As the flow of red ink and bad news continues, we have the give and take in Washington. There is at least consesus that something has to be done. But, states and local governments in the United States continue to suffer. The Governor and the Legislature are continuing their game of political football. This is the California Governor's Take on this
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The world is right now fascinated with Davos. The rich, the famous and the powerful are all there in paradise talking about the world and all the problems. There is enough being said by all pundits which will speak for itself on Davos. But, two key things occured which I wanted to note:
1) Turkey's Prime Minister Edrogan stormed out of a discussion with Shimon Peres during discusisons on Gaza. Edrogan was given a minute by David Ignathius of the Washington Post to rebute a lengthy comment by Shimon Peres. I think the gesture by Mr. Edrogan must be taken seriously by Israel. It shows the frustration with Israel and the fact that as Amr Mousa said, Israel "does not listen". I was quite disappointed by David Ignathius when he did not grant equal time during the discussions. It seems to me that Dinner could have waited
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A Ray Of Hope, Perhaps?
The bleeding continued Wednesdsay. Boeing annouced 10,000 people were to be laid off. Starbucks up'd the ante on cutbacks. 6700 people are slated to lose their jobs and stores are to close. AOL is laying off 700 people. To top it all off, the UN came out to say that the total job loss worldwide is slated to be around 51 Million. The U.S. House, though, passed the President's rescue package.
As package was coming up to a vote, John Boehner came out stating that he believed that the stimulus plan will not work. He said that his stimulus plan would create 6.2 Million Jobs at half the cost. John Campbell, the conservative fool from Orange County, was on a local radio station stating that it is full of "government spending". Republicans are fond of making general statements without offering specifics of their own. They seem to be trying to find their bearings against a popular President. I can't help but feel sorry for them
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Mike Pouraryan
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