Stimulus plan in Binghamton, New York

Recently I read about a part of the $787 billion Stimulus Plan President Obama has spent, that affects my town of Binghamton, New York. The funds that will be coming to the city is just over $850,000. Not a huge sum, but in a small town like Binghamton it’s a lot.

This money is part of the Neighborhood Stabilization Program. Obviously this is intended to improve neighborhoods across the nation. In Binghamton, the local press did a story of how 8 buildings are to be condemned. In addition some unnamed amount of funds are to be used to pay for apartment housing. Sounds good yes?

Not exactly. First consider this. The only housing project I am aware of going on in downtown Binghamton is student housing. And that was paid for before the Stimulus Plan. So where is the money going?

Another question is how much does it cost to tear down a building? If we look at just the 8 buildings that were detailed in the newpaper then that means around $100,000 per building. The average home in Binghamton does not cost that much. In fact you can easily buy a home in the range of $60,000 – which is including the increase in housing prices that has been going on for the last 6 months at least. So it would seem there is some waste there.

Separate of that is the question of what impact removing these houses has. Of the buildings identified, the neighborhoods are some of the worst in Binghamton. The homes on the same streets are in horrendous condition. The people there are lucky if they can be considered part of the local middle class (not the national average which is way higher). So fixing or removing 1 building is suddenly going to improve the neighborhood?

And this is in the face of the fact that every time there is a strong rain (which is frequent here) several areas have flooding, in part due to the poor drainage system, which cause traffic and health issues. It is in the face of the fact that 1 in 3 (if not more) storefronts in Downtown Binghamton is empty – and has been for the last 5 years I have lived here. In fact there are dozens of empty buildings in the downtown area right now. Not just the storefront, but the entire 4 or more stories of building. Which includes space that easily can be or is apartment space.

What stabilizes a community is jobs. Not short-term projects like tearing down a building, but a full-time consistent job. It gives the people in the area the funds to improve their homes, and buy furniture. It creates a feeling of anything but despair and disdain. It provides opportunity for a better life of a family.

What do apartments in a vacuous downtown mean? Nothing. Beyond students that only live in the city seasonally and would like to be closer to the bars, there is no benefit to citizens. There are no new jobs that are nearby for students, or citizens, to work at. There are no grocery stores close by. Nothing is centralized beyond the bars. Oh and 4 banks plus the sports arena. The framework for a thriving downtown it is not.

I’m not saying that the condemned buildings don’t need to be torn down. They do. But the limitiations on how the money from the Stimulus Package can be spent seem to be more waste than benefit. Because the decreasing numbers of citizens in Binghamton will not reverse itself with 8 more abandoned buildings no longer standing. Adding more aparment space in a town with ample cheap housing does not improve the standard of living. And none of this employs anyone (except the bars downtown).

It just makes me wonder where the stimulus is in the Stimulus Plan? Because the window dressing in Binghamton does nothing but anger me. I’m not paying a mortgage on top of my actual mortgage to watch a building be torn down and politicians claim that this rights the ills of the entire town. I’m just not that stupid.

How is the stimulus money being spent in your town or city? Is it actually creating real jobs? Is it improving the lives of people around you? Or are you finding that your $120,000 (approximately your share of future earnings for the entire stimulus plan including interest) is just going nowhere fast?

I really would like to know.

The first 100 days of President Obama

So we have made it thru the first 100 days under President Obama. The nation is still called America. This is still a democracy. The public, and more importantly the major media, still love President Obama. But this is no longer the nation that I grew up in.

There have been many changes under the Obama Administration, some due to the President and other due to the Democrat-led Congress. All of the changes have been based in the goals of the far-left and selected campaign promises.

Let's start with the appointees. There are many critical Cabinet positions that have yet to be filled. Several have had a revolving door of nominees, leaving some of the most critical positions that effect the economy open. Worse yet, there has been an undeniable consistency that virtually every Democratic nominee has failed to pay taxes, in some cases for multiple years, until nominated. Which is troubling in a "Do as I say, not as I do" kind of way.

But beyond the appointees are other troubles.

President Obama has failed to live up to many of his campaign promises. The Guantanamo Bay Detention will be closed, eventually, though there is mass confusion on what to do with the detainees. Will some be imprisoned in American jails. If so at what higher cost than normal. If not in America then to where? So far only France has accepted exactly 1 detainee. So much for international support and their belief in President Obama.

President Obama has failed to increase transparency on 7 of 9 major laws since taking the Oval Office. This too was a campaign promise that was broken. The most notable case of this was the $787 billion stimulus bill. A stimulus package that does not spend all the money now, that limits the income level of those that can use it, that applies only to citizens that RECEIVE a paycheck, and is primarily a tool of social change.

There are numerous examples of millions being spent on projects like artwalks, skate parks, and non-existent homeless projects in cities without homeless problems. All of these are attributable to the stimulus package, and the fact that to this date almost none of the members of any level of the Government has read the full law. In fact almost no member of Congress or the White House read the entire bill before it was voted on and approved by Democrats. Nor did the public get a chance to read it before President Obama passed it into law. The reverberations of this are still being felt now.

Moving on, President Obama has enforced the ability to gain an abortion, even in later term pregnancies. Which is in line with his long-standing political beliefs, though not exactly the beliefs of the nation at large.

President Obama has approved the use of embryonic stem cells, another issue that flies in the face of overall public opinion.

President Obama allowed Congress to break the Constitution by retro-actively penalizing American citizens. This was in the form of specific and non-grandfathered taxes to the executives at AIG. These taxes were on bonuses that the executives received as part of their contract, that the Government did not renegotiate when they had the chance, and in fact guaranteed in the stimulus package that no one read. The Congressman that guaranteed the money? Senator Chris Dodd, a Democrat and in charge of the Banking Committee.

Also, while violating the Constitution - which President Obama taught at one point - the concepts of all contracts were broken. In violating the contracts that the Government itself assured, all contracts are theoretically void. Because if the Government can break one it can break them all.

Plus the Government asserted its ability to control private business. First in taxing the AIG executive, thus stating the Government can retro-actively dictate pay. Then in forcing the removal of the CEO of a major auto company, while demanding changes to the operations of that company along lines that only the Government desired.

All this before the Government requested the expansion of power to allow the Treasury Secretary, an un-elected position, the ability to take over any company that it deems is significant to the nation based on undefined criteria. Which if passes will allow the Government to theoretically take control of any and all companies it chooses to.

But President Obama has done more. He has ended the Iraq War, by removing troops (a campaign promise) in an extended timeframe with the exception of 50,000 troops (both violations of the same campaign promise).

President Obama has also proposed his new budget. This is separate of the $410 billion continuation bill that was passed, also funding 9,000 pork-barrel projects. It was passed the same day that President Obama made a public outcry to stop wasteful spending by the Government. And it violated a campaign promise to end pork-barrel spending.

But the $3.6 trillion dollar budget of President Obama does not include the continuation bill or the stimulus package. It does include some $600 billion for a nationalized healthcare plan, that does not exist today nor have any plans of how it might be implemented. And this budget, going by President Obama's own best case figures will reduce the budget by 50% in 4 years. This part has been highly publicized. What has not been publicized is the rest of the budget plan.

President Obama's budget goes on after year 4 for a total of 10 years. By the end of that time, according to the President himself, the deficit will have increased by 250%. Few in the major media discuss this outcome, nor question how any plan that creates a larger deficit than it starts with can be called positive or effective.

But like every Administration, there have been bumps in the road. Besides the appearance that no appointee in the Obama Cabinet pays their taxes, while demanding that citizens must do so in greater numbers, there have been other gaffes. Like the recent decision to fly a plane over New York City without notification of the Mayor or any public notification - creating a panic based on the 9/11 events. There has also been the bow that President Obama bestowed - which has been described as everything but what your eyes will see in the video. There is the publicly friendly, and privately harsh, discussion with Hugo Chavez. There was the embarrassing gifts to our strongest ally's leadership and monarchy.

Yes the Obama Administration has had a hit parade. And these are only the most public and notable points. There are many other quieter, even less publicized actions affecting law and governance, and the appearance of the nation.

Like the now unspoken manner in which North Korea essentially turned it's nose up to the U.S. and fired a rocket that in one move threatened our ally Japan, and our nation itself. This cemented the fact that America has less respect and instills less fear than ever before on the world stage. An idea confirmed as our Secretary of State, and President, issued apologies for the existence of America and our actions to continue to exist.

Yet on the domestic side of the table things are even more unstable. America now fights terrorists, and the ideal of terrorism, by giving it a new name. The idea must be that there cannot be a terrorist act if the Government cannot call anyone a terrorist. That is except of Americans themselves.

Yes, because the Government - in the guise of Napalitano - has sought to isolate those that disagree with the governance of the land. Those that hold ideologies separate of the Administration, that have vowed to defend this nation with their life, and/or those that believe a religion strongly have been placed at the top of the list of dangers to America. Quietly, and without public scrutiny. The Amish and bloggers like myself be warned.

This is but the briefest coverage of the first 100 days of the Obama Administration. Likely each point will be something ignored by the major media. Yet it is these things that define where America is truly going. And doing so with smiles. President Obama's approval rating is over 60%.

So though this has been used to describe President Bush, I think it more directly applies to the America that President Obama is shaping

"So this is how Democracy ends. With thunderous applause." - Princess Amidala in Star Wars Episode 3

But if the poll on my sites are correct, Democrats had best watch the clock carefully. Because their time in the sun may well be short. My poll results state that since the inauguration the total outlook by my readers that responded are

39% feel President Obama has kept his promises and is doing a great job
38% feel President Obama has BROKEN his promises and is doing a horrible job
16% feel they need more time to decide
13% feel President Obama is the same as any other President

My poll may be small, but I believe that my readers are some of the most informed, intelligent in the blogosphere (well overwhemingly most are minus the ones that shout profanities), and those from America are real representations of America. Thus I would state that this is the real view middle America holds.

So in summary, President Obama promised change. He never clarified what that meant or what he would change. After 100 days we now have an indication. It is a change indeed. Though none I know would have voted for this.

Thankfully we will have the mid-term elections soon, and might be able to reverse or hold off the worst of that change.

Don't blink, Democrats might have paused on spending your money

Perhaps the most stunning news to be announced since President Obama won the election has just been made. It has nothing to do with global warming, creating green energy, or nationalized healthcare. It has nothing to do with the growing problems with China, Iran, or Afghanistan. But it does deal with the monumental spending that has occurred since the beginning of the year.

For the first time since Democrats have overtaken the Congress there is going to be some restraint in the spending spree. Yes, that is shocking. Said by House Speaker Nancy Pelosi herself, the Democrats might not spend even more money just because they can. Amazing.

This of course is in reference to the possibility of a second stimulus package (the first best described as the ‘Obama gift to liberals’). The mere concept of which denotes the complete failure of the first Obama stimulus package.

“I really would like to focus on the first one," Pelosi told reporters. "I think it's important that the American people and the Congress of the United States have confidence in the recovery package that we have passed.”

Yes confidence. Like the confidence that Representative Barney Frank, Chairman since 2007 of the Financial Services Committee – which he has been part of since 1981, had in Fannie Mae and Freddie Mac

“Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee since 2007, characterized Fannie Mae (Stock Quote: FNM) and Freddie Mac (Stock Quote: FRE) as "fundamentally sound financially" at a hearing in September 2003, as the two entities went through major accounting scandals. Frank also said he didn't want "the same kind of focus on safety and soundness" on Fannie and Freddie as other financial firms and preferred to "roll the dice a little bit more" to support subsidized housing.”

Or the confidence of Senator Chris Dodd – member of the Senate Banking Committee for 25 years and Chairman since 2007 –

“Sen. Chris Dodd (D-Conn.), chairman of the Senate Committee of Banking, Housing and Urban Affairs since 2007, called Fannie and Freddie "one of the great success stories of all time" at another hearing in 2004, noting that they brought homeownership levels up to 70% of the American populace. As recently as last July, Dodd called the two entities "viable" institutions that were "fundamentally, fundamentally strong."

Or the confidence you might feel when President Obama states that his economic plans (blunders in my mind) will “save OR create 3.5 million jobs”[emphasis added by me]. A statement that is factually impossible to prove. In addition to being polispeak for ‘my ass is covered no matter what happens’ – in my opinion.

The confidence these critical lawmakers display is awe inspiring, if you happen to be an anarchist or stock market bear. This is especially true when you consider that Democrats waited for a Democrat President to be in office before spending $410 billion on keeping the Government afloat – including 9000 earmarks that President Obama directly stated in his campaign to be elected would be checked line by line to avoid wasteful spending.

Yes you can feel very confident that either President Obama lied to the American public, is impotent before a Democrat led Congress, or that both the President and Congress just don’t care how much they spend as long as they can get everything they have wished for in the past 30 years - to the tune of $3.5 trillion just for this years budget.

What else could explain the $787 billion dollar stimulus package that neither stimulates new businesses, encourages job growth, nor provides an incentive for Americans to buy anything. But that same package does wonders for just about every liberal goal and social engineering agenda you can name.

But it seems that for the moment Democrats have paused on the all-out spend at every turn mentality that is the hallmark of the Obama Administration so far. I feel as if I just won the lottery.

President Obama thinks stock market is a good deal he doesn't care about

There is nothing like watching the daily polispeak dance that politicians like to do. It is especially interesting when the dance is being done by the President. Few Presidents are as skillful with polispeak as President Obama, which says a lot.

I mean just look at how President Obama has handled the complete meltdown of the stock market. The Dow Jones Index, along with virtually every stock on any exchange, have nosedived down a vortex nearly every day since he was elected. But this is considered merely “day-to-day gyrations” that are of no consequence.

An almost total freefall, some 26% since the first trading day of 2009, is a minor happenstance. This is hardly worth talking about in the view of the President. And if you must speak about it, it is all the fault of the prior administration.

Of course President Obama started talking to the markets and the nation months before he was inaugurated. He was dictating economic policy and outlining his initiatives well over 60 days before he was sworn in. And he has effected economic policy changes as well as given somewhat direct guidance on what steps he plans to take in these troubled times. But the current effects on the economy have nothing to do with his Administration.

I mean let’s just look at what he has done so far.

His Secretary of Treasury has gotten the remaining $350 billion dollars from the Bush mortgage bailout. There has been no word on how that money is going to be spent, if it has not been already, but he has the access to it.

He let the Democrat-led Congress loose on a stimulus package that swelled from the day he was elected (then a mere $50 billion dollars) to the final passage of $787 billion dollars. The package is all money borrowed from the nation to be repaid by taxpayers with interest in the future. But everyone who receives a paycheck will be able to make an extra $13 a week for 4 months – if they are under the class of rich which is $75,000 for individuals.

But besides the non-lump sum of $400, the public is also paying for honey bee research ($100 million), and moving Government Agencies at $500 million a move, and research to find a way to create usable green energy (~10 billion dollars - just to find a way to make it, not a dime to actually implement it since it does not exist and may not for a decade), and $100 million for moving fish barriers in mid-West rivers among hundreds of other spending programs.

All of this is to ensure that the roughly 500,000 people who were laid off from Circuit City and almost every other major private sector company in January alone will still have a job. I’m not sure how since I doubt most people have degrees in biology, physics, engineering, and so on, but he said it so it must be true.

President Obama also told the world that he was going to increase the tax on investments in the stock market. Because the fact that interest rates are too low to invest in bonds was not enough. Plus he intends to tax the hell out of those able to afford to invest. So you can understand why the world has rushed in to invest in our markets.

But in case anyone just wanted to hold onto their cash, President Obama is authorizing the Government to essentially take over banks. This way the Government can ensure that loans are made – as well as who will receive them (by the way, isn’t that part of the reason we are in this mess?). Plus the Government can be right on hand to wherever people are putting their money.

But lest you try to give away your money, to charity, the Government under President Obama has another answer. The taxes are to increase on donations. Thus you can give away all your money to a charity, and still owe the Government a huge sum of money. Because under President Obama the Government is smarter than the public and will decide where your money should go and who can receive it. Even though the Government can’t balance a checkbook and most of the public can.

Still just in case any money is not accounted for the Obama Administration has a plan. By increasing the cost of energy, like gasoline and electricity, with taxes they can scoop up more money. Even though this means the price of filling up a car, heating a home, buying food or any other consumer item will increase as well. But remember the Government gave everyone getting a paycheck an extra $13 dollars a week for 4 months to cover the cost of everything going up. If you make under $75.000 and thus not rich.

Yes, all of this. Yet the stock market has continued to sell off like a waterfall. Why should anyone be concerned. It’s not like the stock market is a forward indicator of the economy.

Still, just to cover his tracks, President Obama is now talking like he cares about the IRA’s, mutual funds, stock investments and retirement funds of tens of millions of Americans. He has now stated that “buying stocks is a potentially good deal”. Isn’t that great!

Oh I can see the crowds forming a line to just jump into the markets, with money left over from I know not where. Considering the prospects he has laid out, it’s easy to see how you can make all of 10% - before taxes and commissions – in about 2 years. That’s only a LOSS of maybe 20% after taxes and commissions. Why wouldn’t anyone want to get on that train.

And that loss should coincide perfectly with the $2 trillion in spending cuts President Obama plans to make, if he does not continue with his plans to spend $3.5 trillion on the national budget. Plus every projection he has made – that his own economists think are improbable – comes true exactly as he has stated they should.

Polispeak is a wonderful thing. Because after stating all these things, driving away investors and making every industry of business cringe, President Obama maintains a 64% approval rating. Just watch him dance

Where is the bottom?

Over the past several days I have been asked two questions over and over. Where is the bottom, and where would I invest? They are difficult questions, and I don’t have great answers.

It has taken the market 4 months to reach the lower target for the Dow Jones that I called for on November 18th 2008. Once it reached that point I expected another 500 point drop, which took a week. At this point some 55% of my predictions from last year have happened. And that is a conservative estimate.

Since that time I have spoken with many former stockbrokers, business owners, and investors. And from all these discussions, the political environment, and what I believe, I can say the following with confidence in my mind.

The Dow will flounder between 7100 and 6600 for as long as the next 9 months.
Any upside movement in the market will be temporary.
If any global political events heat up in the next 9 months, things may get far worse.
Gold and oil will run sharply first.
A major bank will fail.

Since the start of 2009, the Dow Jones Index has lost 20% of its value. This was predicated on a liberal Democrat taking office as President, a Democrat-run Congress, the addition of $800 billion (not including interest but rounding up slightly) in spending called a stimulus package, and the fact that some $350 billion of authorized bailout is pending use.

None of this is a positive for the economy. Every large investor and institution could see that. I believe that major investors took the time from October until December to pull out most assets from the market. December was a time when small investors entered the market, and some short seller closed their positions. Which led to an artificial rise in the markets, seen by small investors and some media as confidence in President Obama.

From Jan. 2nd and on (at the latest), I believe large investors have shorted the market – if not just before that time. I believe that they foresee little opportunity for an investment over the next 18 months. Bonds are worthless at these interest rates (especially if inflation grows even half as some expect). Corporations are troubled by negative growth for at least 2 more quarters, and the continuing credit squeeze. Thus stocks are inadvisable, generally.

But I do not see large shorts to close their positions yet. They are waiting for a signal from the Oval Office and Congress. IF the Obama Administration goes forward with creating a nationalized healthcare, costing tens of billions of dollars to start, and Congress goes forward with the currently whispered 2nd stimulus (of the Obama Administration), then the shorts will increase and the Dow will go far lower.

The result of continued spending is that tax rates for the “wealthy” and corporations must increase. Where else will the money come from? And wealthy is a relative term. Because as the just passed stimulus package has made clear $75,000 for singles and $150,000 of couples is the threshold. And since corporate taxes were promised to increase 10% during the Presidential campaign, that cuts the current profits. Including transaction costs and taxes, the Dow would need to go down roughly 800 more points to give a decent net profit. If the cost of the Government is increased the assurance of who will pay grows exponentially.And thus the profit needed must as well.

But a friend mentioned something interesting to me. The market is always wrong at the top and bottom. With maybe some 90% of the market negative currently, we must be near or at capitulation. Which I agree with. Except normally at the top or bottom of a market there is an obvious near or mid-term expectation. There is none now.

There is virtually no sector of the market that can be observed to have an obvious benefit under the current political plans. Nor in the current private markets. Thus there is no area for capitulation to rush forward to. Thus it will not happen.

When the markets do reach the profit point of acceptance, and close their positions, where will they invest?

It is my expectation that the safest and smartest positions to create are in oil and gold. Only in those 2 arenas are we able to see assured continuous demand. Every other sector is questionable on time and return. Especially in this political environment.

There are companies in these sectors, or related ones, like Alcoa that trade at below book value now. This is an interesting value. But expectation of near-term growth is null. Yet at some point the vital raw goods will be needed, and demand plus speculation must drive the prices higher. And as that price rises, without another sector to compete with any real assurance, there will be a run – latter to be followed by another crash in those sectors.

At the very best, I expect some sectors of the market to show better than expected numbers in the 3rd quarter. Those that took short positions and closed out long positions in mid-2008 might have the same result for the 2nd quarter, but that will be far fewer companies than in the 3rd quarter.

This is a recipe for very flat to downward trends in the market.

Still there is hope. But it takes a lot of patience, building of positions in small steps, and no expectation of a reward (ie a return of 15 – 25%) for 18 to 30 months from now.

There is my answer. Take it as you will.

Dow Jones at 7600 - what I said, right and wrong

Back on November 18, 2008 I made a prediction. I said that in the first quarter the Dow Jones Index will hit 7600. I then proceeded to explain why it will do this and what will be happening. With the Dow having crossed my target I will reflect on what I said then.

“…auto makers are now first in line to ask for their own bailout,… And Congress will likely pony up the money for each of them.”

In fact the auto makers asked Congress for $50 billion dollars. As a surprising move, probably meant to give citizens the impression that Congress has some idea of what it is doing, the auto makers only received $15 billion.

Keep in mind that like the credit bailout, auto makers claimed at the time that the entire amount was needed or they would fail. To date the auto makes have not failed (though they have laid off workers, which was inevitable) nor has the economy though less than all the funds requested have been used.

“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.”

House Speaker Nancy Pelosi not only hit the bleachers, she hit it out of the park. The stimulus package is being signed by President Obama today at the eye-popping total of $787 billion. But only Democrats think there is no waste in the stimulus.

“This means that New York City will get crushed this year.”

So far the budget of New York State is so bad that Gov. Patterson is in the process of taxing citizens based on weight. And who knows what will be next, but be assured the State is in severely bad condition.

“President Obama will get inaugurated and the Dow will drop 500 points.”

In fact the Dow dropped every day from the start of 2009. On the inauguration the Dow jones Index dropped 337 points. Not the 500 I expected, but close enough.

“Oil prices should stabilize at around $65 - $70 per barrel to start the year…”

I am completely wrong. They are currently at about $37 a barrel of crude oil. The economic crisis is keeping demand way down, and so far oil is not being used as an alternative investment.

“Gold and precious metals should all increase dramatically in a similar manner to that of 2008.”

As of today, Gold hit $973.80 an ounce. It is within $36 of an all-time high, set last year.

“Growth in China will likely stall as well, especially since the boost from the Olympics will have faded.”

The World Bank has stated that real exports will be down 7.5% in 2009 (at 3.5% versus 11% in 2008) and the growth in that nation will slow to 7.5%, or down 1.9% from 2008.

“Taxes will increase roughly 3% on all income groups.”

Wrong so far, but just wait for it.

“Several mid-sized financials will fail, blame will go to short-sellers and corporate greed.”

Expectations are that this is on the horizon.

“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.”

Thankfully I am wrong on this so far. I pray to remain incorrect. But there is no reason for any nation to buy Treasuries at below 5%. It’s just not worth it.

“Unemployment will hit a 20 year high, again raising fears of a depression.”

I cannot count the number of times Democrats, and President Obama, have stated we are in or about to be in a depression. Call it fear mongering if you want to be honest, but it’s a daily statement without question.

Unemployment recently broke a 28 year record.

“Iran and Russia will take aggressive stances in the world stage.”

They have been blustering a bit of late. But they have not taken a full-blown aggressive stance. Yet.

“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.”

Well looking at it empiracally I would say that I have got it about 55% right so far. The 1st quarter isn’t over yet either. World politics can shift in a minute, so that might push up my percentages at any time. And honestly I don’t what the rest of what I expected to come true. It would mean devestation to millions.

I will stand by a though I made at that time as well though. I expect things to get a bit worse and hold through the second quarter. But given I had no idea what the stimulus package would entail, nor such a enormous wasteful pricetag I will ammend my thoughts.

The 2nd half of 2009 will be just as bad, if not worse than the first half. There is no stimulus in the stimulus package. There is nothing to preserve or create jobs. No sound person would use any of the paltry amounts the stimulus will provide to do anything but save, pay bills, or watch evaporate if gas and/or oil prices move up at all.

At this point I would imagine gold hitting $1150, crude oil eventually getting back to about $60 (mostly through alternative investment speculation and production cutbacks). I fear but expect unemployment to hit 10% by the end of the year. The 4th quarter will be horrible. Inflation will likely run 3% higher. The Dow Jones Index can be expected to drp another 500 and stabilze there over the next few months.

Again I will say that I hope I am wrong. I want to be completely wrong by the end of the year. I want to laugh at what I expected with tears of joy. But I doubt it.

I’m at 55% and we are only in the middle of the 2nd month of the year. With a liberal Democrat President, a Democrat-led Congress that is headed by 2 of the most incompetent (in my opinion) politicians in decades, and expectations of spending that might have been called astronomical only a few years ago.

But we will see. Do let me know what you think.

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?

Senator Judd Gregg withdraws and highlights problem

Did anyone notice what just happened? Senator Gregg has just dropped from the nomination as the Commerce Secretary in the Obama Administration. Some may focus on the fact that this is the 2nd person to drop from that post. Some may question the multiple high-profile losses the Obama Administration has encountered. But that isn’t really important in this case.

The reason why Senator Gregg dropped out is important. Because he disagrees with the stimulus plan, which I don’t fault him for, and the census. And it is the census that should demand the most attention.

With so much attention focused on the stimulus and economic conditions of the nation there are several other things happening in the Obama Administration that is being unseen. And with a corrupted news media that still swoons when the President appears, the public is being denied the opportunity to speak about or learn what is happening.

Why is the census important?

The census is more than just a count of the people of the nation. It’s political power. It’s who has control of that power.

Currently the Commerce Department runs the census. And they use human beings to go out and visually count who lives where and how many. Based on those reports the House of Representatives grows or shrinks. With that change comes many other repercussions.

As an example, let’s say that San Francisco is a bastion of far-left liberal democrats. Lets say they have 2 million people according to the last census run by the Commerce Department.

Now what is being proposed by the White House is that they will run the census (or in thier words "work closely with the census director"), and not the Commerce Department. In addition the White House feels that computer models are far more efficient and accurate in deciding how many people live where.

But unlike the Commerce Department, the White house will not publish the computer models, just the results. So like any statistical poll, the models can be made to say almost anything wanted.

Thus in my example, San Francisco could become a city of 5 million people. That doubles the number of Representatives from that city and increases the Democrat power in Congress. The same model could decrease the population in any Republican or Conservative leaning city or town in the same manner. Thus we have an artificial imbalance of power arbitrarily and specifically created by those already in power.

Also going along with this ability to shape political outcomes is the ability to reward those the White House likes, and punish those it does not.

In the same example the increase in population would also give more federal money to San Francisco. That money, like the power would be taken from other cities and towns that the White House does not like, let’s say Dallas for example.

In essence it is a bribe and a manipulation of the Government. It is warping the democratic system this nation is based on. It is purposively taking the power of the people and redistributing it based on the whim of a small group of people, that may not have the best interest of the nation at hand. And who knows how such a hidden, non-transparent system may be abused in the future.

This is not what President Obama promised the nation before and after getting elected President. In fact this violates a promise President Obama did make.

Something needs to be said about this. Something needs to be done to prevent this. Because some far-left wingnuts like Moveon.org may love this idea, but most Americans are far more level-headed and rational that that.

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.

The problem of a fiscally responsible homeowner

Maybe it’s just me, but I’m feeling very frustrated of late. It is the talk of the tax credits and benefits for new home buyers and those facing foreclosure. I just can’t help but be annoyed.

As a homeowner, I am listening to how the Government wants to give so much money to people who over-extended themselves. They want to make it so easy for people buying a new house. And those are good things. But for those of us with a home and paying our mortgage, well we just are being ignored.

There is no benefit to me for paying my mortgage on time. I get no accolade, nor tax break or credit beyond whatever has already existed. Yet I too am suffering. Maybe not as much as those that made bad decisions, or came upon unforeseeable problems. Still this economy is no joyride.

The Obama Administration wants to give a $15,000 tax credit to new home buyers. Those in default or foreclosure get to re-negotiate they mortgages, and/or Government aide. That’s a huge amount of money, individually or as a group. Yet because I am fiscally sound, because I made decisions that would provide me the ability to pay my obligations as I agreed to, I am effectively penalized.

The penalty is not just that I receive no benefit from the Government or via my mortgage. The money that has been spent, and will be spent in the near future, is money that will have to be repaid via taxes. That’s coming out of my pocket. Add to that the fact that since I have no adjustment, and I will have to be paying for what others are receiving for bad decisions I am effectively paying their mortgage and my own.

If I wanted to own another house, I would have bought one. But what I am getting is my home, and another place that I have never seen, cannot live in, and gain no benefit from. It’s almost as if the Government is saying

“You have a nice house. This family will be moving in with you. Oh, and you will pay them to do it. Thank you for being reliable and fiscally sound.”

But maybe it’s just me. Though I imagine that anyone that is renting would be even more upset as they don’t even have the benefit of a home, yet they are paying for someone else’s in spades.

So how do you feel about this?

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.

House Democrats are scamming your money

I had a friend ask me why the Republicans are causing trouble. The reference was to why all the House Republicans (and 11 Democrats) voted against the Stimulus Package. And when I mentioned some of the things I have long written, I was asked for more details.

Now I imagine others are wondering about details as well. How can I claim this is a horrible plan that will bankrupt America if there are no specifics. How can I be sure that this won’t stimulate the economy. Perhaps this is just a giant plot of Republicans to make President Obama look bad.

Well back in the land of reality, I decided to see if I could find a few more details on the stimulus package. And here are some of the things your money is being spent on. Remember that this is your money, and you will have to pay for this out of your pocket sometime soon.

$245 million for maintaining and modernizing the IT system of the Farm Service Agency
$175 million to buy and restore floodplain easements for flood prevention
$2.7 billion for rural water and waste disposal direct loans
$150 million for emergency food assistance
$50 million for regional economic development commissions
$1 billion for "Periodic Censuses and Programs"
$650 million for Digital-to-Analog Converter Box Program
$100 million for "Scientific and Technical Research and Services" at the National Institute of Standards And Technology
$30 million for necessary expenses of the "Hollings Manufacturing Extension Partnership"
$300 million for a competitive construction grant program for research science buildings
$400 million for "habitat restoration and mitigation activities" at the National Oceanic and Atmospheric Administration
$600 million for "accelerating satellite development and acquisition"
$140 million for "climate data modeling"
$3 billion for state and local law enforcement grants
$1 billion for "Community Oriented Policing Services"
$250 million for "accelerating the development of the tier 1 set of Earth science climate research missions recommended by the National Academies Decadal Survey."
$50 million for repairs to NASA facilities from storm damage
$200 million for "academic research facilities modernization"
$100 million for "Education and Human Resources
$4.5 billion to make military facilities more energy efficient
$18.5 billion for "Energy Efficiency and Renewable Energy" research in the Department of Energy
$2.4 billion to demonstrate "carbon capture and sequestration technologies"
$6 billion for energy efficiency projects on government buildings
$600 million to buy and lease government plug-in and alternative fuel vehicles
$150 million for deferred maintenance at the Smithsonian museums
$700 million for "comparative effectiveness research" on prescription drugs
$1 billion for Low-Income Home Energy Assistance
$1 billion for Amtrack

Again this is only part of the list of things that are needed “immediately”, and will “improve the economy”. Please do correct me and explain how Food assistance, research, or climate data modeling are going to improve the economy and help the guy/gal down the block keep their job at the local Macy’s or Office Depot. Please explain how those ex-employees of Home Depot are going to feed their family and pay the bills for the next 2 or 3 years because of repairs to NASA or Earth science research.

I dare you.

Do I think funding for education is important? Definitely. Is it part of a stimulus package meant to help people stay employed tomorrow? No. Thus anything that does not help the NATION create jobs or maintain employment is a waste of time and money in this package.

If Democrats really wanted to improve things, why not take the billions of dollars that are being wasted, roughly $36 billion just from the examples I cited above, and give it directly to the public. That would be about $123 for ever man, woman, and child in the United States right now. Take out children and those not paying taxes (since they can’t repay they don’t get the benefits) and you get around $250 each.

There is still another $790 billion more to look at. Think that there might be just a bit more waste in the 25% of the package that won’t even be spent for 2 or 3 more years. How abut just giving us the money today and not wait 3 years. That would be almost $2,500 each. That would stimulate the economy.

But that isn’t going to happen. Which means the entire package is nothing more than polispeak, and a way for the Government to gain more control of your life. The Republicans that voted against this aren’t bad guys, they are actually helping you. But don’t expect the major media to explain it.

Obama Stimulus Package: an urgent need to do nothing

The more I hear about the Obama stimulus package, the less I like it. Yet it is the most “urgent” piece of legislation that his Administration is working on passing, immediately. Just as the $800 billion for the credit crisis had to be immediate.

And just as with the mortgage/credit bailout quick action without forethought provides for mistakes, waste and a few political amendments that no one will notice until after the fact.

As of right now, the Obama stimulus package is being referred to by President Obama as

“All we can do, those of us in Washington, is help create a favorable climate in which workers can prosper, businesses can thrive, and our economy can grow," Obama said. "And that's exactly what I intend to achieve - soon.”

Now think about this for a moment. The stimulus package is intended to avert a depression and reverse the recessionary trend currently happening. This is important to remember as I continue.

25% of the Obama stimulus package will not take effect until after 2 years have passed. That’s not my opinion, that’s from the White House itself. Thus the package is not immediate.

The package includes several hundred billion dollars for environmental studies. That also takes an extended amount of time, and provides nothing to the economy. But it does make the global warming crowd feel all warm and fuzzy.

The package requires that:

“Much of the spending would be for items such as health care, jobless benefits, food stamps and other such programs.”

Jobless benefits do not create jobs, and therefore does not help the economy. Food stamps do not create jobs and therefore does not help the economy. Healthcare could create jobs, except that the money allocated for that is to supplement the coverage and cost for those that have lost a job. Again it does not create anything.

And a huge portion of the stimulus package is targeted to give the public money. But that’s not exactly true. First you have to make less than $75,000 (or $150,000 for those filing joint). Second you must receive a paycheck. Third you will receive a discount on the federal taxes you pay – up to the first $8150 of your annual salary.

That last one is important. It means that if you get paid once a month (as an example), and in month 2 or 3 your income exceeds $8150 you will no longer get the benefit. Of course the entire benefit only amounts to about $120 a month anyway. Which should be plenty of money to go out and buy hoards of new items. Which would create new jobs.

Except that $120 a month isn’t much at all. For most major purchases, like a new TV that will work with the HD changeover, cost far more than a mere $500 (which would take 4 months to save up to and is not immediate). Add to that equation the fact that the average American has $6000 in debt, and with tens of thousands of jobs being lost so far in this month alone most are more concerned with lowering debt as opposed to buying a new shiny something to compete with the Jones’ next door.

So again this is not creating jobs.

But there is some portion of the funds that will go to small businesses. Roughly $2.7 billion dollars. Or in other words, next to nothing. And larger businesses will get money as well, if they can prove they can create jobs through Government approved calculations that have been proven to be next to impossible to qualify for.

But do not fear. The Government will be funding jobs via public works. Like in the time of FDR. Except that just like then, if nothing is being done to create private sector jobs, which the above proves it is not, when the Government stops the funding there are no jobs for people to apply for.

In essence, this is a political polispeak attempt to look good. The long term effects are negligible at best. The quiet side provisions are definitely not popular. In virtually every aspect it fails to create jobs, or spur consumer confidence. It fails at its immediate and definitive purpose, stimulus.

If this passes, Democrats in Congress and President Obama will look good. For a while. And Republicans will have yet another thing that will be blamed on them. And when the built in failure of the plan becomes apparent, Republicans will be the first people selected to blame for their disagreement.

What is needed is a stimulus plan. Not the word stimulus, not the projection of sending the public checks that will need to be paid back at some point in the future. Least of all is the need for the Government to take care of everyone as if they were children, which this package does in abundance.

I don’t want the Government to give me what it thinks I need. I want the ability to earn enough to make my own choice about what I actually need, and if I do well what I want.

All politicians should reject the Obama stimulus package. Democrats won’t. Most Republicans will. And it will get passed because there are more than enough Democrats who seek political gain over their constituents well being.

Not the definition of change most voters expected, but it is change indeed.

The 100 day countdown has as many questions

Well I read something that was quite interesting the other day. It dealt with the questions of what we can expect from an Obama Administration. The article by Jim VandeHei and John F. Harris titled What we don't know about Obama points to some interesting thoughts.

So far we know that President Obama has ordered the detainee prison in Guantanamo Bay closed. He expects this to take one year, though the Bush Administration has spent at least 2 years seeking to move some 60 of the worst prisoners to any nation that will not just release them to Al Quida. This is part of his promised acts as a peace maker. That is in conflict with his plans for Afghanistan.

President Obama believes we can win in Afghanistan. He has stated that is the center of the war on terror. And that is where he wants to focus, then end our fight. But to do so is anything but being a peacemaker.

“Most military experts think a decisive win in Afghanistan — as opposed to a muddle-through strategy leading to a gradual withdrawal —will involve a major surge in troops and a willingness to tolerate high costs and high casualties.“

And speaking of war, there is Iraq. Which President Obama continues to move towards running from. The country is finally in some semblance of stability after our prolonged presence and several gaffs of the Bush Administration.

“But this remains an extremely volatile region that could erupt in new bloodshed. Will Obama still cling to a speedy pull-out if it means the country could implode?”

With anti-war hawks like Hillary Clinton in his Cabinet, and a majority of the Democratic Party looking for nothing less than absolute withdrawl what would President Obama do in that situation? Especially as he focuses our troops in Afghanistan thus escalating that conflict? Especially as military history states that a war involving multiple fronts usually end up with loss.

Also along these lines is the question of torture and interrogation. The first part of which is what to do with the detainees in Gitmo as I stated above. But moving forward is what to do about any future suspects we might encounter. They will not be able to be detained. Thus we must presume they will be interrogated in the field. But under what rules?

No matter what some may feel about the use of questionable techniques or outright torture there is one absolute truth. America gained needed information that has led to no more attacks on American soil. With many of the prior interrogation techniques now banned will we still be able to gain that information? Since we will not have detention areas to hold these suspects will we have an opportunity to learn the information that would prevent another major attack?

Then there is the question of the economy. An issue I have long has major problems with. The proposals made by the Obama Administration demand and create multi-trillion dollar deficits, which President Obama has said cannot be maintained long-term. But there is nothing in the proposals that would indicate that the deficits would be paid off in the next 4 years, or even 10.

The public is now becoming used to, and insistent on stimulus checks. If you ask the average American right now they believe that another stimulus check will be in the mail – which has been directly refuted by President Obama. And the poorer the person the more they are anxious for that check.

But that is a mere $850 billion dollars. If President Obama also goes forward with his healthcare plans, his expanded Government, and the declared spending (bailouts) for the economy the imbalance will be at least $1.6 – $2.1 trillion dollars when it’s all said and done (this year alone).

If President Obama plans to keep his budget in massive record deficit only for the short term then he must raise taxes sharply - for ALL Americans, cut entitlements drastically – including the new healthcare and social security, and reduce the military’s budget even as we have soldiers fighting in Afghanistan. And a major deficit will still exist, with no guarantee that the economy will have improved.

And then there is a hot-button issue for me. Darfur. A subject that most politicians have avoided on all levels. America has yet to pass the laws sitting in Congress for 4 years that would prevent corporate or individual investment in the Sudan (Darfur Accountability and Divestment Act). This is similar to the laws passed that prevented funding Apartheid in the 1980’s. Yet even in the Democrat-led 110th Congress nothing has been done.

Will President Obama step up and use his extreme approval ratings to draw national attention to this genocide that has been ongoing for some 7 yeas now? Will he place financial bans, or even use military force to help save millions of non-American lives? Does his role as peacemaker end at the shores of America or does it include other parts of the world that have dire need and no strategic benefit to our nation?

What will President Obama do? No matter what he chooses he will piss off some part of America. But is he strong enough to piss off his main support – far-left liberals? They gave him the money to win. They rallied him over Clinton. They want some of the most extreme (I believe socialistic) changes to the Government. And if President Obama is to be an effective President for all of America, the far-left must be pissed off often and on major issues at times.

But that would bode poorly for his approval rating and chances at re-election. And virtually all the plans of the Obama Administration seem to require 2 terms to come to the proposed fruition. Is President Obama willing to risk that second term for a more balanced Government?

All serious issues, all serious repercussions. And all without any assurance of what will happen. Many wanted change, and in some form or another they are about to get it whether they like the outcome or not.

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.

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.

Gold, oil, stocks, Democrats and 2009

Last year I was looking at the gold markets and speculated that gold would surge along with several of the gold stocks. On December 6, 2007 I rebuffed the claims of Goldman Sachs when they stated to sell gold. At the time the spot price was $855.

In January of 2008 I pointed out a few gold stocks:

• Streettrack Gold Trust
  
• Barrick Gold Corp.
  
• Agnico Eagle Mines Ltd.
  
• Goldcorp Inc
  
• Western Goldfields Inc
  
• Agnico-Eagle Mines Ltd
  
• Alamos Gold Inc
  
• Anatolia Minerals Development Ltd
  
• European Goldfields Ltd
  

- each of which was soaring. At the same time I was pointing out my belief of what would happen to gold spot prices, oil, and the Dow Jones Index.

"All stock markets, all financial markets, move on emotion first. That’s given. And few things are more emotional that 1.25 basis point moves by the Fed in a week. But fundamental facts of the markets always come to fore and correct the emotion. To me, $1000 gold, and higher gold stocks across the world, is as fundamentally sound today as when I discussed it earlier this month and in December of 2007."

Which lead me to state

"Now I will go one step better. If supply remains constrained, as we can see is likely, and the U.S. economy has the mild recession now being stated by the Federal Reserve. If oil production is cut, in combination with the recent U.S. refinery accident that has placed pressure on capacity, and Senator Barack Obama becomes the Democratic nominee for the President of the United States. If all those actions occur, which seem 80% probable to me at this time, then I believe that gold spot prices in excess of $1125 are possible by the end of this year. Commensurate with this move should be gains among the gold mining stocks across the world."

How close did I get? $1035. Close enough for me and many others. And then gold drifted down. The power outages in South Africa were resolved, oil prices peaked and then dropped. The world was consumed with the problems of the mortgage bailout and then the credit crisis. Major financial institutions failed and/or were on the brink of collapse as politicians (like Barney Frank), The Fed, and the Secretary of Treasury all scurried around like rats on a sinking ship.

Now we have entered 2009 with several important facts known. Interest rates are at all-time lows, the mortgage crisis has yet to be abated, oil is on the rise again - albeit from lower levels than seen in recent years. The American economy is leading the world into a depression, and at our helm is a new inexperienced highly liberal Democrat. None of these things are positives.

The American Government is about to spend even more money than all of 2008 combined, with a Democrat-led Congress that has no desire to reign in the Democrat President. Both his policies as stated and his indicated primary goals are wastes of money on a grand scale few countries could ever command as their GDP.

Thus we are seeing gold sit at $879, the Dow at 9034. That's just about 2000 points lower than my initial expectations for 2008, but above the lows of the year - barely. What will happen next?

In a move much like what was seen in 2008 we will see gold and gold stocks rise. I again call for gold spot prices to hit $1125, with gold stocks reaching new 52 week highs. This will likely be coupled with a reduction in oil production, increases in crude oil prices (to a high of around $105 a barrel again), an ethanol glut, higher energy costs, increase home losses, the failure of more financial institutions, the bankruptcy of at least 1 major auto company, and higher unemployment.

The new stimulus plan envisioned by President Obama, some $850 billion dollars (about 5x the Bush stimulus), will stabilize investor fears and consumer confidence for 1 quarter. Then the resulting fact that most of the money was spent on mortgages, credit cards, bills, or placed into bank accounts and mattresses will be seen. And the economy will drop again. The stock market will drop to about 7600 - as I stated in 2008. The bear will roar.

Gold and gold stocks will be one of a few places investors and those that fear financial institutions will run to. Crude oil will be another. Demand will outweigh supply, and emotion will propel prices ahead of that. For 9 months of the year the economy will be abysmal.

If I am as correct as I was in 2008, then my expectation for gold will be in excess of 90% correct. In terms of the Dow I am being overly generous, if my past predictions are accurate. And Crude oil will likely exceed and then under-perform my belief.

While many will feel my thoughts are overstated, as they did and were partially correct in 2008, I believe that the overall outlook is less stable than in 2008. Politics internationally are as bad with Israel and Palestine trading rockets and Iran moving forward on creating nuclear weapons. Fewer banks are making loans, and fewer people and businesses are qualified to get them. Democratic spending is looking to increase the national debt to levels unseen, without any real expectation of improvement. Government interference with private business is greater than ever before - with the Government consistently proving it has no clue on how to run anything.

It is quite early in the new year. Our new President has yet to be sworn in. Much in the world is in flux. So I hope to be wrong, I hope very wrong, in what I am predicting. But I believe that at the end of this new year I will be no less than 60% correct. How you act on that is up to you.

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.

Scam email alert: IRS Stimulus check scam

I was made aware of something today that I wanted to share with you my readers. Now I have no doubt that none of my regular readers are affected but for those that find this post as an introduction to my site I hope it helps.

Everyone is aware of the Economic Stimulus Plan authorized by President Bush and the Government. $600 is being sent out to those who filed their taxes as single, married families get about $1200 depending on how many kids they have. None of that is new news. But there are scam emails circulating the net that are using this information to phish and scam based on this check. [The following is from a scam email recieved by a friend of mine]

Sent out randomly as an email and supposedly from an IRS email account, like Internal Revenue Service (IRS) esr@irs.gov, it has a title of 2008 US Economic Stimulus Refund ! or something similar. This is a fake address, and it has nothing to do with the Government.

The body of the text may state:

Over 130 million Americans will receive refunds as part of President Bush program to jumpstart economy. Our records indicate that you are qualified to receive the 2008 Economic Stimulus Refund.

The fastest and easiest way to receive your refund is by direct deposit to your checking/savings account.

Please follow the link and fill out the form and submit before June 20, 2008 to ensure that your refund will be processed as soon as possible.

Submitting your form on June 20,2008 or later means that your refund will be delayed due to the volume of requests we anticipate for the Economic Stimulus Refund.

To access Economic Stimulus Refund, please click here.

Note: If you received this message in your SPAM/BULK folder, that is because of the large amount of e-mails we are sending out or because of the restrictions implemented by your ISP.

This is a fake and a scam.

The IRS will not contact you via your email account. They don’t even know if you have an email address. Any document from the IRS will state that it is from the Department of Treasury of which the IRS is a part. Also any official documents will be sent via the postal service and bear the U.S. seal. Not to mention that any document will be in proper American English - ie. the first sentence fails to have proper tense structure.

Any Stimulus check will be sent out to the address you have placed on your IRS tax form(s) you filed with the government. If you filed via electronic filing then you will receive your Stimulus check via direct deposit to the bank account you filed. There is no other means to get a check.

Checks are being sent out via social security number. You cannot speed up the process no matter what government department you contact. Plus any contact must be via writing and not email.

Any information from the U.S. government that could come via email will not trigger your spam filters. Nor is the Government limited on the number of emails it is able to send out or receive.

If you receive an email like this, DO NOT follow any of the links. Notify your email provider and delete the email.

Again this is a scam with the intention of either getting your bank account information, or to gather enough information to steal your identity.

I hope this helps someone out there.