Ready or not, the spending will come

Well it’s good to be back home. You may have noticed I was gone, the joy of filing taxes is all I will say.

And on that subject let’s take a look at the final stimulus package that has been rammed through Congress. This is not a bi-partisan package. It’s not even a package that is considerate of the needs of the nation. This is a rushed conglomeration of Democrat spending hopes of the last several years.

Looking at the facts for a moment we see exactly what is happening. This started as a $50 billion dollar pipe dream of the frugal House Speaker Nancy Pelosi. Once it was clear that President Obama had won, and Democrats owned the Congress, it swelled to $800 billion, in about a week. But what does it do for you and me?

Well from July to the end of the year those making a paycheck will receive $13 a week, up to $400 for an individual, if you make less than $75,000. Let the spending begin. In most of New York State that equates to 2 packs of cigarettes (excluding New York City) or a 1 pound package of chop meat, a loaf of bread, a container of instant coffee, and a package of cheese. Put another way its roughly 4 – 5 gallons of gasoline. Yet another way, it is not enough to pay any single bill you might have. And that will stimulate the economy.

Mind you that this is an absolute necessity. The economy will fall into a depression if you don’t get the extra $13 dollars a week. Just as the $700 billion for the banking bailout had to be passed or the economy would fail (ignore that fact that only $350 billion was spent of the immediate need for it all, much of it wasted, and the economy has not fallen into a depression). Not to mention the $50 billion that the U.S. auto makers absolutely needed to have before the end of the year (2008) or they would fail (even though they received $15 billion and none have failed).

But if $13 dollars a week is not enough to get you out spending more money than you can afford, it might help you stay in more. And if you are in more you might try to enjoy a different process that could help you gain more money. Extra kids. Because even if you are too poor to pay taxes, or have at least 3 kids, you can get extra money for more children. That will stimulate the economy.

And since you have more kids you will need a new home (don’t worry about the fact you may not have a job in 6 months). And to help you there, you get an $8,000 tax credit. Of course that ignores the thought that you need to be qualified to get a home in the first place. Since you will need a car for this hoard of children you can get a new car too, and take off the federal tax on that.

All with an extra $13 a week, for half the year, if you make less than $75,000. Does this sound remotely like what got us into this problem in the first place?

But the joy does not end there. If you insulate your home or buy a new furnace, you can get back up to $1,500. The furnace will likely cost $5,000 or more up front and all you have to do is wait a year to get that money back And the insulation can cost up to $55+ per roll (you may need 10 or more rolls for an attic). Mind you that you shouldn’t do both as the credit is for one OR the other. All of this on $400 a year.

You might say that is all well and fine except you need to be sure to have a job. Not to worry if you work for the Government, and we all do right? There are plenty of jobs to build roads, and move offices, and take care of honey bees. You can even get work moving medium sized fish barriers in selected rivers, because we all live near one of those. Or you can get a job in ‘green’ energy, once the technology is created and made efficient. Who care if it’s estimated to take over a decade to create that, you can get a job tomorrow in that field – you do have a Masters in engineering, conservation, chemistry, and/or biology right?

Of course if you worked for say Circuit City and have no job now you still won’t after this package. But the unemployed will get an extra $25 (not per week) in benefits and extended time for those benefits.

All of this will mean that you will have a job and more money just in time for the mid-term elections in 2010. And if you don’t there is a bunch of money left over to spend in that year to tell you that you will get a job right after you vote.

Can you imagine why any fiscal conservative (Democrat or Republican) might not have wanted to spend money on this?

The Dow Jones Index does not lie

Unless one of the better turn arounds of the stock market history occurs in the next 10 minutes, the Dow Jones will have fallen several hundred points, around the range of 7900 or less (a mere 300 points from a target I predicted over 3 months ago). This is happening at the same time that the Senate has pass the economic stimulus package created by House Speaker Nancy Pelosi, bloated by Democrats, and touted by President Obama. So I have to wonder, exactly which people involved with the economy think this is a good plan?

This plan, and the extensive bailouts that President Obama’s tax dodging Treasury Secretary Geithner, are proposing obviously have not convinced the critical group of Americans that good times are anywhere close to the horizon. Since these investors also represent a large portion of the small and mid-sized business owners in America, as well as the world, I expect only one thing. All the emphasis of gloom and fear drummed up by Democrats will actually come to pass. Just as a result of their actions, and not the inaction they claim.

Unemployment in the nation is bad. Not quite the nearly 11% level that the policies of the Carter Administration created, but President Obama and the Democrat-led Congress have just gotten started. We currently hover at 7.8% unemployment, with the seeming goal of 25% reached in the Great Depression getting closer to the crosshairs each day.

None of this has stopped any Democrat, including the President from pressing forward. We have waste and pet projects, call them earmarks by another name, and little hope of improvement. Just look at what is planned.

“$10 million for urban canals, $2 billion for manufacturing advanced batteries for hybrid cars, and $255 million for a polar icebreaker and other "priority procurements" by the Coast Guard.”

That says nothing of the $100 million to be spent on Honey bees and similar items I cannot imagine creating jobs.

“The plan that we've put forward will save or create 3 million to 4 million jobs over the next two years.” – President Obama

“The president's own economists, in a report prepared last month, stated, "It should be understood that that all of the estimates presented in this memo are subject to significant margins of error."

But the polispeak is great. The promises of improvement sound fantastic when you include supposed facts that no one can ever corroborate. And the inclusion of key words like “save” helps keep the polispeak from becoming an outright lie, while showing the absolute lack of confidence that the plans instill. Yet this is good enough for the average American that does not review transcripts nor listen intently to ever word. But those who invest and run companies do, more often than not.

“The economic stimulus bill would allocate about $20 billion to help hospitals and doctors transition from paper charts to electronic health records for their patients… By itself, the adoption of more health IT is generally not sufficient to produce significant cost savings, the Congressional Budget Office reported last year.”

Again it is the confusion of facts and expectations, without proof, that keep many Americans from noticing the horrendous ramifications of the stimulus package and continued bailouts. The examples are not limited to just these few statements, but a collection of comments to the public since Pelosi first stumbled into the idea of another stimulus package in October (then priced at $50 billion total), and the factual items in the nearly $900 billion (actually over $1 trillion when interest is included modestly) terms.

The Dow Jones Industrial index is a forward indicator of the mind of business and economic health. Often it overreacts to the actions around itself on any given day. And there will be more than enough pundits and economists declaring just that, if the major news media that has invested so much into President Obama bothers to investigate that much. But economists don’t work the stock market. Stock brokers and business owners do. And without the degrees, charts, and visions of Santa delivering a healthy economy they have concluded, since January 2nd, 2009 that things are going to only get worse.

So I ask you, who do you believe? Congress and the Executive Administration that routinely fail to pay their taxes, write bad checks, organize pay-offs, and lie about the job they were elected to do (Barney Frank)? Or the guy who signs your check, watches the economy in action every day at every tick on the Dow, and the guy that will give either of those 2 enough money to expand their business and employ more people?

I was a stockbroker, so my opinion is biased. But you can look at the facts and the carefully stated words for yourself. Just don’t look at the value of your 401K while you do so.

What "Change" amounts to in Washington D.C.

I find it so interesting that some are surprised by the problems in the Obama Administration. It’s not like anyone should have expected the Democrats to be or act better.

To start with the top, President Obama pledged that his Administration would remove the “old politics” and change how Washington does business. It seems the business was given to the public.

Rather than bring in new people to Washington, President Obama has run through the Clinton Administration, and a few popular old Democrats for nearly every position. Nearly each appointment has been a staunch liberal Party-line Democrat.

Case in point is the big pick, Secretary of State Hillary Clinton. She ran a campaign grounded in polispeak flip-flops, race baiting, gender cards, and division in the Democratic Party. For this she was rewarded with a position of massive power, repayment of millions in debt from the campaign, and the ability to position herself for a future run at the Presidency.

And let us not forget that Secretary of State Clinton is known for her Whitewater profits, inexperience in world politics (though she borrowed from her husband’s efforts liberally), ability to dodge invisible bullets, association with a fugitive from the law (Norman Hsu) – including her acceptance and reluctance to return $1 million in campaign funds once he was caught, and most recently her inflexibility to remove any question of impartiality regarding international multi-million dollar donations to the Clinton Foundation.

There is of course the joy of Vice President Biden. He is known for his ability to insult minorities, including insulting references to President Obama (when he was Senator Obama) at the drop of a hat. VP Biden is known as well for his multiple political gaffes, and strong liberal leanings. Not to mention is total disdain for the experience of President Obama, as well as his prediction of an impending catastrophic event due solely to the election of President Obama. But he is the bright side of the Administration and Congress.

Then we have Tom Daschle. He is slightly better than Chris Dodd in that his ability to benefit from his position was only temporary. By that I mean he has finally paid $128,000 owed to the IRS. And since he was so kind as to finally make this payment, the IRS decided not to ask him for the $50,000 penalty you and I would normally have been hit with. Never mind the fact that he waited 4 years (from 2005) to make the payment, and that the only foreseeable reason he made the payment was to get this major position. And don’t mind the fact that Daschle is a hypocrite

“Make no mistake, tax cheaters cheat us all, and the IRS should enforce our laws to the letter. ” Sen. Tom Daschle, Congressional Record, May 7, 1998, p. S4507.”

But why should he worry. Since Treasury Secretary Geithner, who runs the IRS, didn’t find it important to pay his taxes either (that took 8 years). At least not in any timely manner. And without the penalty as well.

Keep that in mind when you get your tax bill. Because I guarantee you won’t get the same treatment. But who are you? Just a voter.

But I mentioned Chris Dodd. He runs the Senate Banking Committee. You know the part of Congress that completely ignored every sign of the mortgage crisis. The people who along with Representative Barney Frank in the House Banking Committee looked America in the eyes and said everything was under control and anyone saying otherwise was a liar – right before several banks and AIG had meltdowns. But Chris Dodd is special. Or at least his mortgage company thought so.

It seems that his mortgages, that he promised were the same as everyone else, have turned out to be sweetheart deals. I guess everyone else means every Democrat that holds a political office. And it only took him 6 months or so to reveal this information – that he promised to provide the public 5 months ago. Compared to the others he is lightning fast. It only took until after the election to mention the truth.

Ah, but don’t forget House Speaker Nancy Pelosi. The woman behind a stimulus bill that fails to provide stimulus. Unless you think pet projects like honey bees will somehow help those 162,962 people that were laid off in January alone, get new jobs. .html But don’t worry, because she too has her own sweetheart deal in the works. Not that it’s secret, but you should recall that Speaker Pelosi holds a large stock position in a green energy company, one of the areas the stimulus plan will be dedicating money to for research to find a way, over the next 5 years or more, to create anything.

Considering all these problems, issues, bald-faced lies, broken promises, and abuses of power, is anyone really surprised? Because the American people were promised change. And if this isn’t a change (for the worse in my opinion) then can you imagine once all these people really get the ball rolling? Aren’t you excited?

And if you doubt a word of what I have said, just check Google and see the news that the media is keeping quiet. Because it would look really bad if the news media held President Obama and the Democrats accountable after having sold their souls (and committing active self-admitted bias) to get that feeling down their legs.

And some are surprised? Just wait, we have 3 years and 11 months to go.

The true Democrat definition of rich

I just figured out a secret that I don’t think most people in America have noticed. The fact is it’s not much of a secret, it’s more like the elephant in the room. And Democrats have successfully avoided mentioning it for a while now.

Looking at the supposed “stimulus” package that is trying to be shoved through Congress before the public realizes what’s in the package I noticed something. Now we have to step into the way back machine called facts for a moment. Democrats be prepared.

“So, if you make $31,850 or more you may not feel like Bill Gates and Warren Buffett but you are going to get taxed like them.”

Remember that? It was March of 2008 when all the Democratic candidates (including then-Senator Obama) voted to increase taxes on anyone making more than $31,850. It was at that time that Democrats started to insist with high order of polispeak that only the rich would suffer under their leadership.

Of course that leadership also was asleep as the mortgage crisis grew and then spawned the credit crisis. Both of which are still evolving into bigger problems. But I digress.

As then-Senator Obama won the Primaries, he began to discuss, vaguely, his economic and tax plans. It was a central point that he envisioned the rich as the sole point of higher taxes. This of course raised the question, what is rich?

The Obama campaign started to almost answer that question with anyone making around $250,000. That later went down to $200,000. Shortly after that it became $150,000. Then the nation got distracted, as financial institutions fell left and right. The only question at that point was who else Rep. Barney Frank might blame the collapse on other than himself.

Now we can move up to the present.

The House Democrats (minus 11 bi-partisan Democrats who joined the entire Republican membership) voted to pass the bloated, non-immediate, useless, stimulus package that also seeks to fund Honey bees, fix NASA, and study ‘global warming’ among other useless actions. But in this current version of the non-‘stimulus package’ there is a provision for tax rebates.

The money is to be provided to the public, as a savings each month for 4 months of about $120. But here is the catch. It’s only good for up to the first $8150 you earn, so if you exceed that amount before the 4 months are up you lose out.

Worse yet is who will get that money. And this is the elephant. You must make less than $75,000 (or $150,000 jointly). And there is the new definition of rich. The answer that has been over 6 months in the waiting has presented itself.

So if you thought Obama would only tax the rich, hello you very likely are now part of that group. Honestly I never considered making $75,000 as rich. It isn’t poor but its just as far from Bill Gates.

Think about that. Middle class income is a cut-off point for Democrats in Congress, and President Obama who is all in favor of the stimulus package as is. Can anyone tell me this is what they expected when they voted for President Obama?

If this is the threshold for who gets help, and who pays for that help, it seems more lopsided than even during the Primaries where Democrats were leapfrogging each other to sound more moderate and friendly to the public. But Congress is not partisan, nor are the current batch of polispeak promise socialisic – according to the self-admitted major news media.

Let’s be honest. If President Obama told the American public the truth, that he considered $75,000 rich, he never would have been elected. No wonder he never gave a firm answer. And why Democrats have avoided the issue entirely, because the public backlash would sink the approval ratings faster than Nancy Pelosi can waste money. And that is very fast indeed.

Well you may not hear the truth in many other place, but you have heard it from me. If you doubt this, just look up the provisions of the stimulus plan. It’s right there for you to see.

America is failing the children of the world

It’s a real shame that American politics is so filled with polispeak and soundbites that most don’t know how ineffective our Government can be. One of the most glaring failures of our Government can be seen in the Child Soldier Prevention Act.

This was introduced to Congress in 2006, then again in 2007, and again in 2008. It has never become law. In fact it has yet to make it out of committee. Imagine that. It has yet to make it out of committee.

In the 109th Congress, under the title H.R. 5966 this Act was meant

“To end the use of child soldiers in hostilities around the world, and for other purposes.”

In the 110th Congress under the titles of H.R. 2620, H.R. 3028, and S. 1175 (covering 2007 and 2008) this Act never made it into committee.

But at least it was in Congress. Before 2005 it wasn’t even an issue. Even though more than 30,000 children were used as soldiers in just the Congo region from 1998 – 2003. And even with this fact being known, and the Congolese militia leader Thomas Lubanga currently under trial at the International Criminal Court for what he has done, the current 111th Congress has failed to even do its usual half-hearted act of introducing the Act.

I’m not so foolish as to believe that if America’s Congress got off its collective fat ass and passed this Act all the slime of the world would stop using children as soldiers. But it would be a statement. It would be an action. And perhaps the fear of losing American dollars and Government support might decrease the number and desire for child soldiers. Children are the innocents of the world, and they deserve at least that much.

Yet not a single Congress has been able to do anything about this. And I have to wonder why. I would love to know what objection ANY member of Congress has to this Act. What part of ending the use of children in war makes them reluctant to have their name on this Act?

Now some might say this is not a big deal. That if this were important it would be on the news. Except the news media is not in the business of telling the public what is going on in the world. Their job is to distract and emphasize stereotypes, and they do that well. And anything that causes the death of any child that is easily and responsibly preventable should always be done.

Perhaps, just maybe, if House Speaker Nancy Pelosi could stop trying to pump up her wind power stock investment, or searching for something to blame on the past Administration, she could actually lead lead Congress and pass this Act. I can’t see how this could be held up if anyone in Congress actually gave a damn and moved on it.

These aren’t American children. But does that really matter? For Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, and the Democrat-led Congress it seems that it does. And I take that as an insult to America.

If you agree, get in touch with your Congressman or Congresswoman. Contact your Senators. Demand that Congress act. It’s a little thing, but it is something. And we can hardly stand in front of the world, professing our belief in freedom and democracy, while we allow the one group in society that cannot act in their own defense to be abused and killed.

The Democratic Party: entertaining with polispeak

Democrats are really something. I don't say this because I favor Democrats. Nor because they are special in any way. And let me clarify this - I am speaking about politicians and not people.

Democrats are just as prone to polispeak. They break campaign promises just as often. They have scandals, ignore constituents, and promote special interests as much as any other political group. But the thing that really gets me is the style they have in doing all this.

Democrats don't just get caught stealing money, they have it sitting in their refrigerator. They don't just nominate (or appoint) officials that no one has heard of or lacking experience, they go out and get people that are particularly unqualified.

Just look at recent events. In New York State we had a Democratic Governor that was actively looking to appoint Caroline Kennedy. She has no experience, has no defined political positions, and her best argument for the position is her last name. Why did she not get the position as Senator? Because she has a massive number of skeletons in her closet; and even with that information Gov. Patterson was still courting her at the last minute.

Then there is Illinois. Gov. Rod Blagojevich was caught trying to sell the Senate seat. Rather than resign, he turned the tables and made an appointment to the position. Thus making the story about the lack of Black Senators, the question of the validity of the appointment, the credibility of the appointee, and the division in the Democratic Party.

In fact the Governor of Illinois is still causing an uproar. because instead of defending himself he is talking about how he wanted Oprah Winfrey for the job. Talk about unqualified.

Yes, Winfrey is intelligent, and popular. Yes she does good deeds, and has a ton of cash. In fact she is the exact equal of Caroline Kennedy. Including the fact that she has no qualification for public office. The closest she has ever come to anything political is her lavish support of President Obama during the Primaries and election. And that puts her on the list of possibles.

Democrats don't just have balls, they are crazy. They seem willing to substitute qualifications for publicity. They seem to promote opinion polls versus positions. And they do so in a hoard of media cameras as if they were entertainers or celebrities. And then they expect us to blame EVERYONE else when things go wrong - like Barney Frank insists.

Other political parties have at least an equal number of foul-ups in their ranks. They all have prima donnas and power-hungry opportunists. But in the Democratic Party it seems that this is the best features in their top ranks.

I just can't wait to see what will happen next. Las Vegas should be running betting pools over what will happen first. Barney Frank blaming the extension of bank failures on someone else (likely the Bush Administration for another 18 months), Secretary of State Clinton being questioned about receiving tens of millions from foreign Governments while in discussions with those nations on behalf of America, Vice President Biden saying something racist and/or stupid, or House Speaker Nancy Pelosi and Majority Leader Harry Reid insisting the time of the Congress is best spent combing thru every document and comment ever made in the prior 8 years.

And all the while bulbs will be flashing, and news media will be gushing as President Obama tells the nation that he will change things while they stay exactly the same.

Yet its other political parties that are bad for the nation, filled with malcontents, and ineffective. Only Democrats would have the balls to look the nation in the eyes and spew that polispeak.

Who has bigger balls, Congress or Clinton? Clinton it seems.

Sometimes you almost feel like Congress can get something right. Then you realize it’s Congress – the worst Congress ever, that has accomplished the least ever – and then you know how bad you’re screwed.

Case in point. Senator Hillary Clinton is about to become the Secretary of State. Such an abomination should never happen outside of a nightmare. But the reality is that the wicked witch of pure ambition has made it virtually through the confirmation process.

Then you notice that Senator Lugar has a problem with the conflict of interest Senator Clinton has with the Clinton Foundation. Hurray someone is paying attention. Until he says he won’t hold up her approval.

Then you get another burst of intelligence out of the collectively dim, this time from Sen. John Cornyn. He too has the inspiration to notice that the Clinton Foundation is a conflict if it continues to receive tens of millions from foreign governments while Hillary is Secretary of State.

“Transparency transcends partisan politics and the American people deserve to know more."

Then he goes on to say he won’t block the confirmation either. On top of which the true genius of the Senate, Harry Reid proclaims that he will push Clinton thru either with a voice vote or a roll call vote – which Democrats know can’t be defeated.

So all we have to provide the nation with the assurance that our Secretary of State is unquestionably looking out for the nation is her unyielding ambition for power (which got her this job in the first place) and her assurance that there will be no conflict. Because we all know that the word of a Clinton is unimpeachable.

Except when it comes to commodity trades, adultery, pardons, political backstabbing, talking to the media, establishing a position on illegal immigration, actual political influence, historical fact of work done, or promises to constituents. How could anyone doubt them?

Where are all the balls in Congress? Surely there is a Congressman or woman that is willing to say that based on the past history of the Clintons, and their campaigns, and their top aides, just taking their word is not enough to become Secretary of State. You would think someone would want to hold her up, or attempt to block her. Yet none of the Representatives and Senators of Congress has a backbone it seems. And they are the people that are strong enough to help President Obama lead the nation out of this near depression?

If this is the kind of response we can expect from the 111th Congress, I might wish for the time wasting, money spending, pork barrel loving, ineffective 110th Congress. The days of Congressional hearings seeking to find out known facts and investigate legal actions for months seems like a pleasure cruise to a Congress that is unwilling to question and halt the image of corruption.

What can we expect from them if we find that there actually becomes corruption in fact? Maybe Barney Frank looking dumb in the camera as he watches video of himself spout utter nonsense some more. This time maybe Pelosi and Reid will join him. What a tea party.

The question of the honesty of the Secretary of State, the incorruptibility of the office, is at stake here. This is massively serious. And it is being handled as if this were about parking tickets from the U.N.

If this is what an Obama Administration portends, it’s a dark 4 years coming.

Don’t say I didn’t warn you

I have been talking about the economy and what would happen if a Democrat would win since late 2007. When it became clear that President Obama was the Democratic nominee I discussed how the stock market would react to his win. And after the election I forecasted what would likely happen to the Dow Jones Index on inauguration day.

I hit the nail on the head. Well close enough to that anyway. I called for a 7600 Dow on or shortly after the inauguration. I called for a 500 point drop on inauguration day. And I detailed how the economy would continue to tailspin to levels last seen in the Carter Administration.

The Dow Jones Index closed down 332 points. The Dow currently sits at 7949. That’s down 4% from Friday and 12% since the start of the year.

Some will want to blame this all on President Bush, but the reality from Wall Street is that a Liberal Democratic President is a negative for the economy. If only ½ the economic promises made on the campaign trail come true the national debt will tower over any level seen before, and none of the plans are good for private business. And that is bad for investing.

Still crude oil is at lows, and the inflation hitting food has not increased in a while. So maybe Joe Public doesn’t realize how bad things will get, yet. But Wall Street is preparing. And they are looking at the long haul.

I still target the low of the first half at about 7600. I still believe that the money wasted on the mortgage/ credit bailouts will increase drastically. I say again that the 2nd stimulus plan will be a worse waste of money than the first under President Bush. And I insist that the Democrat-led Congress under Pelosi and Reid are the worst Congress in at least my lifetime.

I really hope to be wrong. But so far I am 4% or 349 points from being exactly on target. Any spike in oil prices, a run on gold, a blip in the value of the dollar, continued fighting in Israel, or any of a number of anti-American nations - and terrorist groups - beating their chests (as Vice President Biden promised will happen) and my targets will be exceeded. And all the feel-good talk prior to the inauguration will evaporate.

Yes the stimulus plan will be a great political boost for our new President. And public opinion will soar, until everyone realizes that the extra $60 a week (or less) will not prevent them from losing jobs. Or that at some point soon you will be paying taxes for a house you don’t own. Or paying for a healthcare system that is substandard and as convoluted as any department of the Government. Stock will lead the way down.

But there is time to avoid all this. Congress can reel back all the new additional spending. President Obama can give up on the 2nd stimulus plan. Taxes could be cut, at both the corporate and personal levels. And departments of the Government could be trimmed of wasteful spending.

In a pig’s eye.

Congress is going to spend more than what has been used to bailout the financial industry as the first shot in the bow. Additional money will soon be needed to balance the financials already continuing to flounder, not counting those that will follow like dominoes. And the auto industry that stated flatly that a penny less than $50 billion in a bailout would mean Chapter 11, will become bankrupt as they did not get their money.

Increased regulation will increase cost, and fail to increase good business decisions. And companies will fail. The stock market will lead it all down. Lines will form for Government corporate handouts. The national debt will soar.

Sounds bleak doesn’t it. It should. It is happening before your eyes. By the end of the 1st quarter Joe Public will feel it, badly. Just in time for taxes.

And if I am only as correct as I was about my prediction for the inauguration, well you can see what that will mean. I hope, honestly hope, that I will be wrong.

I really want to be wrong. But what I see in the marketplace tells me that I am right. That double digit inflation and unemployment are mere months away. And that it will last at least as long as the Obama Administration, if not longer.

So since putting your money in a bank will gain you nothing, the taxes on investments make that plan dumb for anything with a return in the next 2 years, and gold is already moving just wait. Wait and take small bites all the way down. Because America will rebound at some point. Because I hope to be wrong soon. The reward from that will be better than me eating crow, it will be a stronger economy.

I can’t wait.

Billions for foreclosure, billions wasted

So now President Obama seems to be interested in providing up to $100 billion for those in foreclosure or about to be. It's a really great gesture. It will surely help his approval rating. And it will help guarantee that he receives the full $850 billion he has wanted for the Democrat proposed stimulus plan.

But I am opposed to this. Not because I don't want people to keep their homes. But because this is a terrible idea.

First there are the homeowners who are not in foreclosure. Those of us that are doing everything we can to maintain our homes are at a disadvantage. We get nothing from the proposed stimulus except the $120 a month that has been stated. Which is little to nothing compared to the cost of a mortgage, and raising a family, while trying to save enough money to ensure that if we lose our jobs we have something as a cushion.

In fact, it seems almost beneficial to allow your home to go into foreclosure these days. The Government is so busy trying to ensure you cannot lose your home that they are basically encouraging people to do so. You can negotiate a lower interest rate, defer payments, extend the life of a mortgage, remove interest, and soon there will be payments from the Government to subsidize your home. Given all that, why the hell is it worth struggling to stay out of foreclosure?

Second, in spending money on the foreclosures it is that much less money spent on the economy. Given I think the stimulus plan is as much of a waste as the Bush stimulus plan, basically a political look good tool or polispeak for the masses. But if spending money is the plan to turn the economy around, why dilute that plan?

In effect the average American will be paying back, at some point in the future via taxes, the money they receive + the money given to homes that are not their own + money given to businesses that made bad business decisions. And that is just the looking forward money (and does not include his new spending for new Government programs). The Government has already obligated us to pay back previous money received + several bank bailouts (which did nothing to improve the stock market and retirement accounts) + auto industry money + bailing out an insurance giant. All while inflation is creeping higher.

And none of the money going to any business or institution has any guarantee of repayment. Nor if there were repayment, any way planned of how that money would be assessed. The money could be used to fund pet politician projects (like ACORN was initially set to receive) or some other Government inspired spending spree. We don't know.

Which says nothing of the fact that the Government has no idea how the money will be spent, or where it is spent. Billions are unaccounted for at this moment, and the Obama Adminsitration has stated it intends to add tens of billions more into the pot with little better knowledge than before. Unless you believe that Congress got a lot smarter since the elections in November. The majority of politicians that were there before are still there. Like Barney Frank and Chris Dodd, who couldn't figure out what was happening in the economy until after the problems hit the news. And they head financial oversight committees, still. Think they are any smarter or more adept than 3 months ago?

But again on the foreclosures. I have enough trouble paying my mortgage, my household expenses, taxes, and preparing for higher corporate taxes. It's hard enough to do all that in an economy that is just flat, and this is anything but. Now the Obama Administration believes I should add on someone else's house? Which I will never get a benefit from.

That's a hard sell to me. Probably why I did not vote for President Obama. These are no surprises. But they are as bad a set of decisions as I expected them to be. This is not going to help the economy, though I expect it to temporarily help the approval ratings of Congress (which needs it badly).

I don't entirely blame President Obama though. This entire stimulus plan was the idea of House Speaker Nancy Pelosi. She has been fighting for this for months, increasing the amount each month as she went along. Pelosi has had the distinction of being the worst Speaker of the House, with a Congress of the lowest approval rating, that accomplished the least things, at a higher cost, than I believe any other Congress has done in 111 sessions. That's like betting on the horse that went lame and was pulled from the race. Obama made the bet so he gets that blame, but Pelosi made the horse lame and that's on her all the way.

Spending tens of billions on foreclosures sounds nice, but that's all it is. Polispeak. It is almost entirely probable that it will have no effect except a long-term negative. In fact it may speed up the downward trend President Obama was elected to fix. But it's going to happen, so be prepared.

Surprise! We are still in a bear market.

Let me see if I understand this correctly.

"A jump in unemployment sent stocks sharply lower Friday as investors feared that Americans won't soon deviate from their tightened budgets."

That means that someone thought consumers would go back to spending money, or realistically increasing debt, because the new year started? Or they thought that the $120 a month less in taxes (for only 4 months) President Obama has proposed was going to spur new home purchases? At the same time that nearly every industry in the nation is slashing jobs?

It must be great in the world that some of these economists live in.

We have lost the most jobs in this nation since 1945. That's at the end of WWII, when we scaled back from the massive military supply we needed for the war. And I believe more people had more savings and less debt than today - even adjusting for inflation. And the Government had none of the debt we have today, or will soon have even more of if Congress and President Obama get to spend as they plan on doing.

How could anyone look at the 2nd half of 2008 and not expect consumer spending to continue downwards. To expect the stock market to continue in the bear market that it's been in for months now. I mean what did they expect, President Obama would smile and the world would just step up and buy stocks?

President Obama is a Liberal Democrat. He has said from day one that he will increase the deficit, spending more money than ever before. He has made it explicitly clear that he intends to get even more money from fewer sources, business and the higher incomes. What exactly counts as higher income keeps changing, and getting smaller. And business really loves to have to pay more money as sales shrink.

Let's not forget that with the mismanagement of the Fed and the Treasury (neither of which is President Obama's fault - given) we have wasted billions of bailout dollars, have a line of industries waiting for their turn at the free money ATM called Government, and inflation is the one word no one wants to talk about. And inflation will be the one thing that really kicks everyone's ass.

Of course President Obama will say that the sky is falling tomorrow if he doesn't get to give away all our money. That's polispeak, meaning that he wants to look good at trying something that can't work so he has some political clout before it all falls apart. Then he can point backwards in time and blame everything that fails in his plan on President Bush. Politics as usual.

Of course these "old politics", that President Obama promised to banish, are very good at keeping political clout but horrendous for low wage earners and small business. The stock market knows this. That's why its a bear market. And as we approach the inauguration, I expect even more selling. I mean why have an investment when the taxes on it will cost more than you expect to make in the next 2 or 5 years.

As a stockbroker I learned to look for capitulation in the market. That emotional point when people just give up. That's when smart money jumps in and buys. Except that the emotional selling all happened in September and October. Since the election smart money is selling. And that means things are really going to get worse.

Until there is a reason to buy stocks, the market will continue to slowly slide down. Never in just a straight line, but trend down it will. The Democrat-led Congress will authorize spending in new programs that will not help any one get a job or start a business. The President will come up with plans on how the Government can take care of everyone, while being in every pocket deeper than before. And $1.2 trillion dollars in debt will look like a target to strive for in coming years.

I've said it before and I will again, a Nancy Pelosi and Harry Reid Congress with the most Liberal Democratic President in decades equates to double digit inflation, double digit unemployment, rock bottom consumer confidence, and business bankruptcies all not seen since the Carter Adminsitration - if we are lucky to have it that good.

So who is surprised? Not me.

New stimulus package is 60% waste

Now that we have entered 2009, the time for details has begun. President Obama has now stated that he intends to make 40% of the proposed stimulus plan, that was championed by Speaker of the House Nancy Pelosi from $50 billion to its now $800 billion level, business tax-cuts. That is the first logical and reasonable thing I've heard about this plan since its inception.

Some $300 billion dollars will target businesses by cutting taxes on new workers hired and accelerated depreciation among other thoughts. The tax break from hiring new employees is critical. Tax on employees is one factor that cannot be controlled by an owner and is devastating to the bottom line. If this proposal, which is short-term, could be made more substantial - by being proposed long-term or matched by a cut in corporate taxes - it will have a definite impact on the economy. But that is not thinking like a liberal Democrat.

If President Obama goes to his consistent style of thought, and Speaker Pelosi is able to forge ahead with her plans, we will see more of the compartmentalized thinking that dominated the election speeches. That is the thought that there is no connection of one economic plan with any other part, nor that new deficit widening spending or raising taxes might counter any other stimulus proposed. Listening to the Democratic leaders one would believe that each of these things are isolated and do not interact, but in the real world they always do.

Thus if corporate taxes are raised, any gains created from a tax break on new employees will evaporate and those new hires will quickly become unemployed again. But it will buy the politicians a few months of back-patting on the lowering of unemployment.

But the majority of the new stimulus plan is still solidly in the realm of polispeak. Only in that realm is the thought that $500 for singles and $1000 for a family able to turn around a mortgage crisis, credit crunch, and shrinking economy.

The last stimulus plan, which was completely ineffective, came about as a direct payment of money from the Government to the public - which will be repaid in taxes at a later date. That money was used by the majority of Americans to stave off mortgage default and pay down on debt. This time President Obama believes that by directly cutting payroll taxes for 4 months it will have a bigger impact. Which is perhaps even more dream-like an expectation.

That equates to around $120 per month, or $240 for families -

"The $500 tax credit would apply to the first $8,100 of wages, meaning a worker who earns $24,400 a year and is paid twice a month would get about $60 extra per paycheck for four months."

While that is not insignificant, it is not a factor either. If the average person in America has $6,000 in debt currently, and basic monthly costs of some $1500 to live the extra money is 1 night out, or 2% payment on the debt not including interest, or 1 month of cell phone service. Which seems most likely for a person to do?

From what I have heard across the nation a free month of phone service, or paying down on the auto insurance, or electric bill, or catching up with the cable bill, or having a bit of extra food, or paying on the car loan, or replacing clothing are higher priorities than going out for drinks and a dinner. Sure some may buy an new video game, but they may well be doing so because they will be losing cable and thus the game is their only entertainment.

The fact is that stimulus plans that depend on creating money to give to the public, that will need to be paid back via taxes, will never work. Unless the nation were to get $6,000 per person it will never work. The current individual debt and the interest on that debt is too high. And any amount below the current debt load is too small to invest in anything - even if consumer confidence were there.

This stimulus plan is a failure just as much as the one proposed by the Bush Administration was. There is no improvement. There is no greater gain. Money given to the public will garner no positive lasting effect in the economy any more than the last one did. The only thing that will happen is the polispeak will be positive for a time. Great for politicians, but ultimately bad for the public.

If this stimulus were to be a real fix, corporate taxes would be reduced, new employees would create a tax break, accelerated depreciation would be tied to new equipment purchases, and Government would not be directly involved in the daily actions of private business. But that too is a pipe dream. Just like watching the Dow go above 9000 any time soon.

What the 2008 bailouts really cost

I had some extra time today so I decided to take a look at what has happened this year. I wanted to go back and take a look at the various buyouts and bailouts that the Government has backed, and the promises made so far. And the numbers are horrendous.

The main focus so far is on the $1.5 trillion that has been authorized and/or spent thus far. $700 billion for the bailout of mortgages and the credit crunch, and now another $800 billion for mortgages and consumer loans. But those numbers are not the full amount of cost this year.

The year started with the bailout of Bear Stearns. It cost $29 billion to allow JPMorgan to buy that failed brokerage house. And we were promised that would fix everything. Then there was the $150 billion stimulus package that was promised to fix the sagging economy, which failed. Then came Fannie Mae and Freddie Mac, which Representative Barney Frank publicly pronounced as healthy and secure, that cost $120 billion each (not including the $600 billion that is now part of the $800 billion bailout package). And the numbers are still not done.

AIG cost $120 billion by itself. That though was said to be included in the $700 billion authorized by Congress. That means of the 1/2 of the funds given to Treasury Secretary Paulson only $230 billion was available for everything else needed. Not counting the tens of billions given to banks, or the money spent to buy bad loans at unknown valuations.

Of course there was also Citigroup. This cost $20 billion plus $306 billion for guarantees of their bad loans, for a total of $326 billion. Now that is a problem because if the funds came out of the same pool as AIG, we are in a bigger negative than the spending is already creating. A double negative of sorts. And yes I know that guarantees are not the same as cash, but a guarantee must be backed by something besides words. Which means cash from somewhere.

But let us not forget the $25 billion given to the auto industry. And that has nothing to do with the additional $25 billion that is being asked for now, just roughly 5 weeks later. Which is separate money. And that precedent is going to lead to the requests of the airline, credit card, home building/construction and other industries. If the Government is handing out money to businesses, it would be folly not to get in the line.

So the total is $1.94 trillion dollars. Which does not include Citigroup or the additional amounts from the auto industry. Including that figure we get $2.27 trillion in money that never existed and must be repaid. To be exact that means that every American, each of the 300 million citizens, owes $7,567 to the Government.

It is expected that some of these loans and stock purchases will eventually break-even or turn a profit. The expectation is that will happen in 10 - 15 years. Though it is absolutely unclear how the public will be repaid, though the Government will collect all the money. Thus it is possible that the Government will receive money from the public and hold repayments from loans - effectively being paid twice. And it is very likely that any repayment will be funneled into Government agencies instead of the public, as was attempted by Democrats with the first version of the mortgage bailout bill.

But even if 40% of the loans were to make a 50% profit, the bulk of the debt incurred will still be greater. And that does not cover the direct cash infusions made without a loan or repayment provision - which is about 70% of all the funds so far as I can gather.

And the fun does not end there. Remember that President-elect Obama, pushed by House Speaker Nancy Pelosi, has promised a now $700 billion second stimulus plan. The exact details of this plan are unclear, but some amount will be given to the public and some will be used to fund public works. Or so the loose plans state so far. That would mean that in 1 year the cost is $2.97 trillion.

And President-elect Obama still is pushing to add over $800 billion in new spending for new and/or expanded programs. That makes it $3.77 trillion. Or in terms of cost to you and I - $12,567. That's for every man, woman, and child alive right now - working or not.

Put in different terms, this money could have completely funded the entire NASA budget (roughly $419 billion unadjusted for inflation) since inception nearly 10 times over. We could have funded 1,000 moon landings ($36 billion unadjusted) including all the research and development.

Let me make it more personal. That amount is more than the entire net worth of Oprah Winfrey, Bob Johnson, Tiger Woods, Michael Jordan, Tom Cruise, Bill Gates, George Soros, and Warren Buffett combined and multiplied by 10. It's enough money that every single American citizen, of any age, could go to the average college for 2 years. It's enough money to give every American alive today a 10% down-payment on a $120,000 house.

And there is no guarantee, in fact there is reason to highly doubt, that it will get better.

Auto bailout - a sign of bad government

I just love the way that Congress is trying to look tough these days. An auto industry bailout? Hold on, we need details. Right.

Come on, this is the same group of people that handed $700 billion to Treasury Secretary Paulson without a plan. It was the same group of people that fell asleep when Fannie Mae, and Freddie Mac were in trouble (someone wake up Barney Frank). And it was these very same people that gave away $25 billion to the auto industry about a month ago.

Does anyone seriously believe that they won’t bailout the auto industry, and receive neither repayment terms, nor assurances of industry improvement. They couldn’t even create a bailout for the financial industry that could prevent Paulson from moving the money around however he chooses, and that was a concern of House Republicans from the start. With even more Democrats in Congress, and the continued misleadership of Harry Reid and Nancy Pelosi is a better outcome likely?

I’m reminded of a quote from Ben Franklin I believe.

“Doing the same thing over and over, while expecting a different result is the definition of insanity.”

I apologize to Franklin is I got the quote wrong. But the point stands. And it will stay in place until the mid-term elections in 2010. Won’t the damage be interesting to see then.

The fact is that the U.S. automakers need to fail. Let several go bankrupt. It won’t be the end of the world. It will actually be the best thing that could happen.

When large companies fail a couple of things always happens. Several smart businessmen rummage through the wreckage and find bits that they can create new companies with. Those new companies will in part of the gap the old company had, but mismanaged. That spurs growth as a new corporation grows in that niche.

Also the old behemoth of a company slims down. Much of the old baggage is discarded, and the company refocuses on whatever they do best. Renewed energy flows and the company normally creates profits the old company could never do.

This is all good for the economy, though the jolt during the process is unpleasant. But it creates a stronger economy than the one existing before it. And more people are employed after these events than before.

The worst aspect of the auto bailout is the fact that it will be followed by an airlines bailout, and a retail bailout, and probably another financial markets bailout. The Government has made a precedent of stepping into the markets and private industry, because they are afraid of the pain. And in each case it has proven one thing. The Government has no idea what it is doing.

The more socialized things become the more the Government is compelled to step in. The more money is thrown around to avoid feeling bad, the worse everyone feels. Because the Government is incapable of fixing anything, nor can they regulate bad decisions out of business. And they shouldn’t. Bad decisions are normal business and are resolved in the marketplace over time.

Only in America is the concept of perfect markets feasible. It’s stupid and regrettable. But it also seems inevitable. Were that not so, the auto industry execs would never have taken separate corporate jets to fly to D.C. and speak with Congress. They did it because they know they will get the money.

I stated that the Dow Jones will hit 7600 in 2009. But if Congress throw more money at the problems in the markets, and involves more politicians that sleep when they should be watchful (Frank and Chris Dodd) I could be very wrong to the upside.

Dow 7600? Believe it

As the 4th quarter moves steadily towards the holidays and businesses across the nation collectively hold their breath, I decided to look forward to 2009. What are some of the things that I see coming economically in the new year?

Dow Jones Index at 7600. Yep that’s a bleak statement. It’s not what anyone is asking for in their wishlist to Santa this year (except a few masochistic short-sellers). This is definitely a lump of coal.

But I will say something that you really aren’t expecting. That’s the upside in my view.

The 4th quarter of 2008 is going to be bad. Very Bad. We all know it. We knew it when before Halloween businesses were already getting their Christmas displays in order. They needed sales that bad. And still do.

Unemployment is up, financial companies are laying off people in the thousands, and the prospect of inflation looms larger by the day. Add to that recipe a Democratic President (a historically bad indicator for the economy) who’s policies – based on his voting records – are extremely left leaning, a Democrat-led Congress, the worst Speaker of the House ever, and you get a big mess.

But there is the fact that over $1.2 trillion has been spent this year to bailout the mortgage and credit crisis. The money has been the worst spent money I have seen since Waterworld was made. And the fact that no one has control over how or where this money is being spent, just means that it is being spent poorly and ineffectively.

So all that is left to look forward to is the thought that the auto makers are now first in line to ask for their own bailout, to be followed by retailers, pharmaceuticals, airlines and probably every other industry in America. And Congress will likely pony up the money for each of them.

But let us not forget that Congress has included the people in their spend at will program. So far a 2nd stimulus plan is being conceived, growing from an initial hidden $50 billion, to $150 to $300, and now is being speculated at $500 billion dollars. Nancy Pelosi doesn’t just screw up, she does it with swings to the bleachers.

Any one of these things would not hurt the stock market that much. And the by-product of severely deflated oil prices would be a boon to business in the mid-term. But it’s all happening at once. Saving on energy doesn’t matter much when you have no sales revenue.

The weakness in the stock market can bee seen in that just before the presidential election, the big institutions watched the polls and sold to get out of the way before President Obama was voted in. His promises to raise taxes, and his historic voting record were not overlooked. The only pause in selling came to allow smaller investors a chance to buy into the market and raise prices for the next wave of selling. My guess is that most of the money is sitting in cash right now, waiting for an opportunity in anything but stocks. At least in the U.S.

This means that New York City will get crushed this year. Bonuses from financials are getting scrutinized and thus being cut across the board. That means less money in the tri-state area, and thus a bad Northeast holiday season. That means the east coast will suffer and the nation as a rippling effect.

I’m sure some believe the polispeak that Wall Street and Main Street are separate – a concept only politicians could come up with. But this is how I see it all playing out.

Holiday sales will be off from last years rate, further pressuring the Dow Jones Index. Unemployment will increase going into the New Year, and inflation will start to rise.

President Obama will get inaugurated and the Dow will drop 500 points. This is not a racial reaction, but a political one. Within a week or so of that date a $300 billion 2nd stimulus plan will be passes raising the market temporarily. Several forward indicators will suggest a negative 4th quarter and 1st quarter 2009. Home sales will drop again – due to fewer loan approvals. Home prices should drop in proportion, with foreclosures increasing.

Oil prices should stabilize at around $65 - $70 per barrel to start the year as speculation and alternative investments will drive the price higher. Gold and precious metals should all increase dramatically in a similar manner to that of 2008. Growth in China will likely stall as well, especially since the boost from the Olympics will have faded.

President Obama will be forced to state that he will not raise corporate taxes, and a smaller increase in capital gains will be proposed. Taxes will increase roughly 3% on all income groups.

HD television service will cause a disruption across the nation and millions realize they need different television set, and will spike retail sales – but this is a false increase in the economy. It will be read as a positive indicator by politicians though.

Several mid-sized financials will fail, blame will go to short-sellers and corporate greed. Increased regulations will be passed that will not address the potential for bad business decisions, and the markets will sell again in fear of a more socialized America. The first rounds of nationalized healthcare will be discussed. The national debt will run higher, the deficit even more so as new spending will have no check from Congress.

Confidence in the U.S. Treasuries will weaken, and several nations will begin to sell in hopes of buying national debt of England and a few isolated nations. There will not be a run on America as this would instantly plunge the world into a depression. But the fear will accelerate pressure on the markets. The Fed will lower interest rates again to counter these fears, and to again increase loan availability. Inflation will start to gain attention in the media.

Unemployment will hit a 20 year high, again raising fears of a depression. And Iran and Russia will take aggressive stances in the world stage. Oil will run on this fear, as will gold. But direct crisis will be averted for the time being.

I expect all of this to happen in the first quarter of 2009. It is my expectation that to some degree every item I mentioned will occur. The importance and effect of each of these items will depend on timing and reaction as they all play off of each other. But the net result will be a 7600 Dow Jones Index, or lower.

I expect that this will be the bottom of the market. Smaller investors will flee the markets, and discussion of Federal intervention to save 401K’s will begin. This will also be seen as socialistic, but the need will outweigh these fears. The market will likely hover in this bottom range for the 2nd Quarter.

I’m not sure what might happen next.

I hope that I am wrong an most of these expectations. I would love to see the market gain confidence and rally in the face of these events. I hope that President Obama can rise to the occasion and lift the economic and personal spirits. But that is yet to be seen.

If I am as correct as I was in 2008, then 60 – 70% of what I have said will occur, though not exactly in my timeframe. Take that as you will.

President Obama's first 100 days: a prediction

Ok, now that the Obama election win inspired drunkenness has passed the question for many is what is he going to do. Fantastic speeches, and pointing fingers at the past are wonderful ways to get elected, but mean nothing when you need to lead. What can we discern now?

Well we know that Obama is leaning heavily on his old Chicago political contacts. And so far they have been very non-partisan Democrats. I am speaking of Chief of Staff Rahm Emanuel. So that means that bi-partisan policies are likely going out the window right after President Bush exits the White house door.

This bodes well for House Speaker Nancy Pelosi, Harry Reid, and the Democrat-led Congress. They will have a field day passing all the laws they hoped for. Whether that will be good for the Average American is highly questionable.

Speaker Pelosi is relatively giddy right now, because he 2nd stimulus plan is well on the way of being passed. After her failure to slip the plan into the $700 billion dollar bailout (then only a mere $50 billion plan) without notice – and the failure to fund ACORN and other pro-Democrat organizations with any proceeds from the bailout (instead of paying back Americans) – Pelosi didn’t give up. Her next step was to approach the Bush Administration with a $150 billion stimulus package, right after the auto industry received $25 billion for their woes. When that also failed (something Pelosi has been familiar with) she got quite and waited for after the election. And just as was expected President Obama has promised that a 2nd Stimulus Plan, for at least $300 billion will be passed.

The problem here is that it won’t work and will either increase taxes, the national debt, or both (most likely). Why won’t it work? The same reason the first was a failure. The economy sucks.

The stimulus plans are in essence the equivalent of adding more water to a leaky bathtub. It doesn’t solve the problem, it just gives you more water on the floor. The first time most took the money and paid down on their gas and oil costs. A few were able to lower their credit card debt slightly, and a small portion actually went and bought something.

That was all before several massive banks and brokerages failed, Fannie and Freddie died (to the apparent amazement of Chris Dodd and Barney Frank), several industries started to lay-off jobs or close, and the auto industry walked up to the free money line. And just as many are in danger of losing their homes, if not more.

What will a second Stimulus plan do? Well since gas and oil are cheaper, pay down mortgages, go into the bank savings incase you lose your job, buy extra food in case you lose your job, pay down on the credit card debt in case you lose your job – notice a pattern? Buying Christmas or Easter (depending on when the checks go out) gifts just doesn’t rate very high compared to losing your job, and thus will not promote the economy.

Another thing we can expect that has been stated is higher taxes. Yes the start of that plan is the $250,000 bracket. But with over $1.2 trillion spent this year, and other $837 billion proposed in new program spending, and $300 billion at least of a stimulus plan, higher taxes is not an exclusive tax the rich option. And we know President Obama favors removing the President Bush tax cuts, so that’s 3% more tax for everyone above $31,850. Expect quite a bit more very soon. My guess, a net 7% tax increase across the board.

To go with the higher taxes, expect higher unemployment and inflation. Someone has to pay for the higher cost of business, and corporations will always be the last to accept that bill. So the higher costs of everyday goods and fear of losing a job really kills the stimulus plan – which was a dumb idea in the first place.

To further ensure that the economy rattles at the bottom of the barrel capital gains taxes are going to go higher. This expectation is already hitting the stock market. As I was saying to a friend and former stockbroker

“The smart money is getting out. They started once it was likely that Obama would win the election. They cleared most of their positions before the election, waited for mom and pop to buy into the market before the election to raise prices, and the second President Obama won they started to get all the way out. My bet is that we lose 500 points on or in the week of the inauguration.”

I mean why wouldn’t you hold cash right now. Bond rates are useless, and capital gains taxes means you need a 35% profit just to break-even, which in a good market is tough to nail down.

You can also expect to see even less revenue in the media arena. Because of the Fairness Act, which requires that any talk show or political program must be followed with equal time of the same format for the opposing side. Liberals may love to say that the election was a mandate, but since liberal radio and programs lose money faster than Nancy Pelosi can increase stimulus plan budgeting it seems to be nothing but bluster. Still Air America Radio has a final chance to hit the airwaves again (they went bankrupt in 2 years because no one was listening). Until the loss gets so excessive that radio stations get rid of both liberals and conservatives.

What a great plan. If you can’t get anyone to listen to what you have to say, shut down your opponents from speaking too. Even if people are listening to what they say. Because silence is more fair than debate and criticism. It also helps to cut down on people noticing that your policies do more harm than good.

So far if the prospect of rising inflation, fewer jobs, higher debt, lower stock market, and the continued prospect of losing your home haven’t got you excited - while losing the distraction and/or conversation of talk radio – you can smile at the thought of higher wages. A minimum wage hike is very likely to come early in an Obama Presidency.

The hike must happen early in my opinion because the economy will worsen as the year progresses, and all the goodwill President Obama has will evaporate as fast as stimulus checks hitting the consumer market. But higher employee costs will mean more money the corporations have to pass off to the consumer, and more people that will need to be fired to maintain current (or even slightly reduced) profit levels.

Most of all this are items I expected and discussed prior to the election. And just as I predicted President Obama is following every step of what I mentioned. And the outcome is becoming more of what is obviously a bad plan. But there is something that most did not expect.

There will be no healthcare reform. Not in the first 100 days, not in year 2. The nation can’t afford it. The Government is too inefficient to run it. And because Biden believes that the nation will be under duress within the first 6 months of the Obama Administration, we will be too preoccupied (so much for a President doing more than one thing at a time). That campaign promise is out the window. As is stopping jobs from going overseas. In fact more companies will choose to go to cheaper markets rather than pay the rising cost of staying in America.

So in the first 100 days taxes will go up, as will inflation. The economy will get worse, and the stock market will drop to about 7600 – a true rout. National debt will increase, several more banks will fail. The auto industry will get a bailout of their own (around $100 billion at a guess), and so will AIG (again). Domestic drilling won’t happen, because that would make energy cost cheaper – which President Obama has directly stated he does not want. And we likely will have an international crisis that will bring us close to war, and cause Europe to go bi-polar again and dislike President Obama - though not as much as President Bush.

That’s my prediction of the first 100 days. I hope that I am wrong. I really want President Obama to hit the history books as a great President. I’m selfish and Black. I want to see his historical image live up to his speeches. But his policies as they stand means it won’t happen.

A real long prediction, President Obama loses in 2012 to a Republican. His legacy will be worse than President Carter. Expect inflation at about 15% and unemployment to match. And as I said Average taxes will be at least 7% higher across the board. Hope you’ve been saving money.

President Obama - the expectations start now

President Obama has won the 2008 election. I am as elated by that news as any African American or minority in America right now. But at the same time I am looking at what the nation said last night.

At 6pm initial exit poll results started to flow and there were several important facts that were provided by the polls, granted that the information was slanted as all exit polls have been shown to be.

While 93% stated that the economy was negative right now, only 47% thought the economy would improve in 2009 and 40% supported the $700 billion bailout package that is still working it’s way into the economy. This bailout may be part of the reason that 73% disapproved of the job the Democrat-led Congress has done. And it may also be part of the reason that 70% predict that taxes will be higher under President Obama.

And that’s the important thing to note. The economy was the single most important issue among those polled. 62% felt the economy was priority #1. It was that thought and the thought that Senator McCain would continue the policies of President Bush (50%) resonated with the masses along with the feeling that President Obama was in touch with them (57%).

Honestly these are dumb reasons.

Several key Democrats presided over the downfall of the mortgage crisis, thus directly requiring a bailout, which had it’s creation in the Democratic policies of President Clinton and Democrats pushing loans to people that did not qualify to receive them. Somehow this escaped the public notice. As did the thought that there is nothing to stop a Democratic President with a liberal agenda and voting record, backed by a Democratic Congress, from creating more bad policies that even more Democrats may ignore in favor of Party unity in a time of an economic downturn.

$1.2 trillion dollars may well look cheap before the next 4 years are up. Especially since President Obama has promised to expand the Government by $837 billion and House Speaker Nancy Pelosi is waiting for the inauguration to present a $300 billion stimulus plan (at least, it may be higher by then based on her comments). That means 2009 may well start with a Congress approved budget, passed without consideration in full, with a stimulus plan that doesn’t work in an economic downturn. That’s another $1.1 trillion and that does not include anything necessary yet. And all of it must be paid by the American public at some point soon.

Still 51% felt that Obama’s policies were just right (obviously they didn’t have a calculator handy), though the polls also showed that 60% felt that Senator John McCain and not President Obama has the experience to traverse things properly.

And for those like Harry Reid that want to say that President Obama was elected as a statement of the people, the polls (which skew Democratic) stated that only 30% of voters picked President Obama because he shared their views. That’s piss poor low. What is more accurate and clear is that voters made a statement about President Bush – whose disapproval was just 2 points better than Congress at 73%. Sadly he wasn’t the one that was up for election so the point is moot.

It was the economy, and the promise of President Obama to provide money to low income Americans even if they don’t file taxes that made the election – which was stated in the poll by the 51% that thought the Government should do more to solve problems. So the more that pundits and politicians alike explained why this plan to offer the equivalent of welfare at the cost of the economy, the more it guaranteed a win for President Obama. For the 81% that feared that their family finances would be hurt by the mortgage crisis/credit crunch, it was like manna.

Don’t get me wrong, millions were voting in this election (in excess of 105 million by the last count I saw). Not all of those that voted agreed with all of the above. But more than enough did to provide President Obama with the win. Also in that group are Americans that voted for Obama based on race – some 47% believing that President Obama would mean an improvement in race relations for the nation. That part I hope is true, both for selfish and national reasons.

But while the electoral vote was huge, and will be the focus of comments by Democrats in justifying their agenda and giddy news media, the popular vote was quite close. For most of the race up until the well after 11:39pm there was only a 3% difference in votes (which was the margin I had previously mentioned I thought would decide the election). This was no landslide victory.

The nation is still as center-right as it was yesterday. But it will be lead by a left of center Government in the Executive, Legislative, and potentially by the end of 4 years Judicial branches. That means higher inflation, higher taxes, Government run healthcare (equal in stature and performance to the way the VA is run), retreat from Iraq and likely Afghanistan, legal abortion at any stage (so effectively an alternative contraceptive), gay marriage, public votes for unions, higher electricity costs, and no nuclear power. Oh I forgot fewer coal plants, higher demand for electricity due to electric car mandates and less supply, more ethanol gluts, and limited if any domestic drilling.

Doubt me if you will but just keep track of these items as the next 4 years go by. In fact I expect the 111th Congress to vote on these 4 items in January or February

2nd stimulus plan
Tax code change for people below $200,000 - $250,000 and corporations and investments
End of secret ballots for unions
Passing the Fairness Doctrine – effectively either limiting free speech that does not express liberal views or glutting media with liberal speech that would not make it without Government intervention

Some may find all the above appealing. But almost half the nation did not, and with reason. Reasons we all may well learn very quickly.

Not to mention the crisis that Vice President Biden promised to occur. And that President Obama would seemingly fail at, again as VP Biden promised.

But I could be wrong. The economy could rebound without help, or inflation and slowdown. The stock market might not sell off another 1000 points by the end of the inauguration in January. Americans might just go right out and spend all the credit they can find this holiday season and Wind energy may become effective in 6 months (much to the benefit of Nancy Pelosi’s stock account). I hope I am wrong.

Because I honestly want the First Black President to be the greatest President ever. I want him to be seen as a strong leader. A world leader that will defend America with force if pushed, with wisdom to improve – or at least stabilize – the economy. A President that lifts the nation such that teen pregnancy and high school dropout rates fall lower. A President that inspires small business start-ups and job creation. And if he can convince China to join us in cleaning the earth, and ensure quality healthcare I’d love it.

Throw in reparations and an apology for slavery and I’d be tickled pink.

But we all know that isn’t going to happen. But we will get change. And I will blog about the positives, negatives, promises kept and broken. And I’m more than willing to eat crow and say I was wrong – especially if the First Black President can sustain history in the manner I described above.

We will see. It all starts in 76 days.

Nancy Pelosi wants 2nd try at stimulus plan failure

Just one month ago Nancy Pelosi was advocating a mortgage bailout bill that would give nearly $1 trillion to Treasury Secretary Paulson and use any potential profit or repayment for pro-Democratic groups including federally indicted ACORN instead of the public. Also in that initial bill was a quiet attempt to add $50 billion dollars as a stimulus plan for normally pro-Democratic segments of the nation.

Nancy Pelosi was shot down in her first attempt, but she did not give up. Though ACORN is now recognized as a bad choice for more federal funding, especially as a substitute fro repaying the public bailout of financials, Pelosi is still trying for her stimulus plan. And you have to give her credit, she has increased the amount she wants to spend to $150 billion now (or more if she can get it). And she is now getting support from Fed Chairman Bernanke and the White House it seems.



Long-time readers will be familiar with the fact that I thought the first stimulus plan was a waste of money. It was a complete failure in every objective it was hoped it would deal with. It did not stimulate anything, it did not bring stability to the housing markets, it did not prevent the failure of several banks and brokerages, and it did not alleviate the credit crunch.



Another stimulus plan will have the same effect. Nothing. Any funds being used to give to the public will be used to pay down bills and debt, again. Even moreso now with such uncertainty.

And we need to get this into perspective. Nancy Pelosi has presided over the worst Congress ever. It was her Congress that failed to see the crisis from the start. It was her Congress that as late as July denied any problems, in the words of Barney Frank. It was Paulson and Bernanke that have been playing catch-up. It is the current fiscal plans that are causing real inflation to grow, and business to slow – which is the only reason oil prices have dropped. And they want to make it worse by doubling down.

Pelosi is confident that she will get another stimulus plan, if Obama is elected. She plans to wait til then to really push for this useless plan.

“But we can get something signed — please, God — when Barack Obama wins the election.”

That is just blatant polispeak. But what it also means is this. An Obama Administration will bring in $832 billion in new spending, we are spending $700 billion on the bailout, we have spent over $200 billion on prior bailouts, and we will be spending another $150 billion or more on another stimulus plan while businesses will be saddled with 10% higher taxes, and investments will be shutdown with another 15% in capital gains taxes.

Given these facts, I cannot see how anyone will not have their taxes increased. And I don’t mean the 3% increase that Obama and Democrats have voted for and tried to pass in March of 2008. If anyone thinks that business will not slowdown further, and jobs will be lost while inflation grows under these economic plans, they have never done well in basic math – in my opinion.

Nancy Pelosi is decidedly a partisan and underhanded politician. She promotes wind energy without disclosing her substantial stock investment in wind energy companies. She has refused and block discussion on domestic drilling. She has wasted the taxpayers money on trying to point blame on Republicans, admittedly where no laws have been broken. She has had a Congress that has accomplished the least ever, while maintaining a majority in both Houses. And now she wants to make things worse.

I hope people in California wake up and vote her out of office. But the fact is she will hold power long enough to cause damage that will last years. And considering that she has enabled a Congress to willfully damage the nation via inaction and inattentiveness, I can only have nightmares about the damage she will be able to inflict on the nation with a Democratic, left-wing, President as banks and healthcare is socialized.

Keating 5, Tony Rezco, William Ayers - a lot of bluster while candidates avoid the economy

Wow, the words are flying now. The Presidential race has taken a step to overdrive as both the candidates attack each others past. And the points picked by the McCain campaign seem to have the Obama campaign flustered to say the least.

The Obama campaign has been targeting the investigation of McCain in relation to the Keating Five investigations. Senator McCain was vindicated in that investigation and found to be without blame. Yet this was a huge problem at the time, and may again be, as the economy flounders in the wake of the mortgage bailout and the credit crunch.

With all eyes on the Dow Jones Index, which had dropped as low as 781 points down in the day. Expectations that all the problems of the mortgage crisis were averted by the $700 billion bailout have been proven false, which really should be no surprise. Europe and other world markets are now facing their own problems which again rippled from the initial failure of the Fed, Barney Frank and Chris Dodd on their Congressional banking committees, and President Bush. Note that neither Senator Obama nor Senator McCain were responsible for this economic fiasco. But with the introduction of the Keating Five Obama is trying to paint McCain as fiscally irresponsible.

Of course if the record is to be looked at only McCain has tried to reform Fannie Mae and Freddie Mac and highlight problems while Democrats denied the existence of a problem. And only McCain actively worked on improving the bailout plan from what was essentially a blank check to an unwatched Treasury Secretary, with repayment going to Democratic pet projects of dubious nature (ACORN) instead of the public.

The McCain camp has targeted the highly questionable association of William Ayers and Senator Obama. I admit that I have trouble with the close association of the potential next President with a known, and self-admited, terrorist that actively was involved with the bombing of Government buildings on American soil and remains unrepentant. And it is accurate that Senator Obama has initially described their association as a friend, and has backed away from that since the early Primaries while the major news media has avoided all discussion of the matter.

The McCain camp has also targeted the association of Obama with Tony Rezco and Rev. Wright. I disagree with these associations being used against Obama as much as I disagree with The Keating Five tactic. Obama has never been found to have been influenced by either man in this voting record since he engaged in politics in Illinios. Without a reason to be alarmed, their less than perfect public images are just mud to be thrown at the candidate. And I have discussed my thoughts about the attacks using Rev. Wright, which I feel are a sidestep to a racial attack, in depth during the Primaries when Senator Clinton first used the tactic.

But the fact is that neither of these items being used by each camp address the fact that the economy will be weaker and troubled during at least the first year of the next President’s term. It is unrealistic that further cuts to taxes will be immediately available to stimulate the economy. It is equally unrealistic that adding 800 billion in new spending will be possible.

Right now Senator Obama is talking about taking on House Speaker Nancy Pelosi’s dream of a second stimulus plan. Considering the over $1 trillion spent this year just on failing banks and finance companies I can’t imagine where this money would come from, or how it would be any more effective than the first stimulus plan. Infact it would be less effective considering the economic landscape.

As for McCain he continues to believe that lowering corporate taxes is the only solution, which I believe will be a hard sell.

The fact is that right now the drop in the Dow Jones Index, and the up coming horrendous 4th quarter earnings that will reflect the slowdown in the economy, are helping Senator Obama and Democrats. There is no logical reason for this, since both Parties were equally lax and culpable in the creation of this problem (though arguably Democrats are slightly more at fault especially if the past is considered). But if the economy continues to falter drastically, and the promise of a 2nd stimulus plan gains attention (as it likely will) the chance of Obama winning the election increased dramatically.

And if that is what happens, for the reason of the economy, the real pain will start. In my opinion the weakest plan, and the least fiscally flexible plan, is held by Obama. With him in office, and a Democratic Congress again, I expect new record low approval ratings, double digit inflation, double digit unemployment, and an increase in taxes of all Americans by 7 – 15% minimally. Essentially a return to the environment that President Carter created.

But we will see if I am correct and if the various mudslinging attempts of the campaigns have any backlash.

Politics today: what troubles you the most?

Considering everything that is going on in America today I’m just not sure what is the most troubling thing happening.

Of course the major media is hyping the mortgage crisis bailout, which has now become dubbed a ‘rescue plan’, and politicians are making the most of this coverage to promote their political party’s Presidential candidate while blaming all the woes of creation on the other Party. But it’s the other things the major media isn’t talking about that has me equally as distraught.

There is the fact that the Bush Administration has quietly approved a $25 billion loan to the auto industry. There is the fact that Senator Obama is feared to be incapable of winning the election in just over a month, not because of his political views or plans for the nation but because he is Black. There is Barney Frank and Chris Dodd screaming that anyone and everyone else but their banking and finance committees are to blame for the current crisis, or for not seeing the impending problems as late as this July. And there is House Speaker Nancy Pelosi.

Nancy Pelosi is special. In a kind of special needs kind of way (and I don’t want to insult those with such needs by associating Nancy Pelosi with them).

She is the most powerful woman in politics right now, if you can believe it. She is 2nd in line for the Presidency if anything happened to President Bush before the election. Yet she has run an extraordinarily expensive budget in her position as Speaker, with a Congreess that has achieved the least in at least recent memory. She presides over a Congress that has the lowest approval rating since ratings have been kept.

But that is not enough. She has tried to block any discussion of domestic drilling, like Pharoh forbidding the name Moses from being spoken. Which is fantastic for her since she makes money on that delay because she owns stock in alternative energy companies. She also helped to write a bailout plan that allowed the Treasury Secretary to wield sole control over virtually a trillion dollars. When that failed she helped write another plan that took any repayments and gave them to a Democratic pet project, ACORN, which is under federal investigation. And now we learn that paid her husband just under $100,000 from political donations – which she voted to ban in 2007.

“Financial Leasing Services Inc. (FLS), owned by Paul F. Pelosi, has received $99,000 in rent, utilities and accounting fees from the speaker's "PAC to the Future" over the PAC's nine-year history...

FLS is on track to take in $48,000 in payments this year alone - eight times as much as it received annually from 2000 to 2005, when the committee was run by another treasurer [which is now her husband].”

So we have Democrats that won’t cross racial lines, asleep while watching the nations money, pushing to give people homes they can’t afford, spending money they don’t have without control, blocking the near-term solutions of America’s energy needs for personal profit, and violating laws they are supposedly trying to pass, while doing the least work in Congress possible. You have to admit it is an impressive cluster of failure all at once.

And Senator Obama has no intention of not spending another 800 billion dollars in new spending, nor failing to raise corporate taxes in a decidedly negative economy. But he will speak with Iran about not building nukes – pretty please. And he will tell Russia that they are being bad when they invade other nations, after he thinks about it for a while.

Honestly I don’t mind Obama’s inexperience that much. In combination with his other plans for the nation means that things will get worse though. But the supporting cast that would come with him, especially if Democrats were to win the Congress again, really spells “Danger Will Robinson, danger!” (Those older readers will get the reference).

But I wonder for those that don’t follow politics everyday, that aren’t up at 5am reading the latest political news, what bothers you most?

The bail out deal: Polispeak and political campaigning instead of action

I love listening to Harry Reid. He is absolutely partisan and 2-faced. He is the best example of what polispeak means. Listening to hear him talk today you just can’t escape this.

He is speaking about Republicans that didn’t want to go to the meeting at the White House yesterday, but he has no comment on the fact that Senator obama wouldn’t go until the President asked him to be there.

He speaks about Senator McCain and blames him for the failure of the deal, but fails to mention that there was no deal. House Republicans, and many in the Senate never liked the Paulson bailout proposal. There was no deal, except as expressed by Democrats and the media.

He wants to blame McCain, but he forgets that he stated earlier this week that there could be no deal if McCain was not on board, which he was not. He refers to McCain as an outsider, yet McCain is an active Senator with responsibilities to those that elected him.

Democrats like Chris Dodd and Harry Reid, and Barney Frank want to make it seem like this deal is good for America, yet those that look closely at the deal think it is not. And they want to add to the bail out items that are not part of the issue. They want to include the $50 billion that House Speaker Nancy Pelosi advocates, that does not have to do with the bailout but is another stimulus plan that is ineffective and a waste of money.

Democrats are being very political here. They are trying everything they can do to phrase this as a Republican or Senator McCain problem. They want to rush forward and throw money at this problem. That type of plan did not work when Bear Sterns failed, or when Fannie Mae and Freddie Mac failed, or when Lehman failed, or for AIG. They seem to think that throwing your money, my money, at this problem is more than just filling a leaking tub with more water.

Not one Democrat can state that the Paulson plan, as proposed and what they are trying to advance, will work and prevent another problem in a month. Not one can explain why a single person in the position of the Treasury Secretary, should be left with virtually sole responsibility and accountability of nearly $1 trillion dollars.

Harry Reid, and Chris Dodd are speaking about how they will be in D.C. and working on this deal all night tonight, and Saturday and Sunday if necessary. They are saying this is the most important issue before them. Yet they support that Senator Obama go off and focus on a debate, that can be postponed. This is the most important issue in America right now, that’s why all of Congress is doing their jobs – except for Democratic Presidential candidate. And the Republican Presidential candidate is the one being blamed for doing his part of the job.

Either Obama or McCain will be President in a little more than a month. One of those 2 will be faced with the resulting issues that this mortgage crisis bail out will cause. But Democrats believe that neither should be involved in the terms or process of this deal. That seems smart doesn’t it.

I find it completely partisan and polispeak when Barney Frank states that everything is fine in 2003 and July of 2008, and now is trying to blame everyone else for what he failed to stay on top of. Chris Dodd is no better. And as I mentioned above Harry Reid has flipped as well. Not to mention how Senator Obama sprinted from the meeting with the President yesterday to get out and in front of cameras, instead of going back to Congress to wotrk on the deal more as McCain did, is quite telling on who is using this as a means to win the Presidential election.

Our elected officials need to stop with the politicing and focus. This deal needs to resolve the liquidity issue, and ensure that we are prepared for the difficulties to come. It does not need to give away money to pet projects that otherwise would never pass. It is not an ad for the election campaign. It is not a gift to Wall Street, nor an open invitation for every company and industry with sagging sales to line up at the door. Neither should it be the start of the American Government as a real estate broker/business.

Anything short of that is false and stupid, and baseless polispeak meant only to prop up the political futures of selected individuals.