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I'm Back!

Dear Citizens,

After a long, dark respite - I have decided to come out of self-imposed exile. I don't mind saying the last year since the Presidential Election has left me saddened and even despondent at times... I have the same feeling I had when Forty-Three was elected, but this time it is far more alarming. As much as I thought Dub-ya was a poor choice for the country, I feel Barry O is/will be far worse in terms of overall damage to our Country and the direction the Founding Fathers intended.

His first mission? Destroy the value of the US Dollar... This man has not met an entitlement program he doesn't like.

How to fund it all?:

Obama Shatters Spending Record for First-Year Presidents

See article text below:

http://www.foxnews.com/politics/2009/11/24/obama-shatters-spending-record-year-presidents/

Much more to come in the coming days, but thanks for reading...

Best,

Mike

Oh, I think we're all sorry at this point...

By now, you have all seen this footage of Air Force One scaring normally jaded and self-absorbed New Yorkers :

http://www.youtube.com/watch?v=-ornoJFA41A

On Tuesday, Obama told reporters, "It was a mistake. It was something we found out about along with all of you. And it will not happen again."

So how many times is this guy going to apologize?!? And when is he going to actually mean it?

His apology was laced with his trademark disdain and pseudo-intellectual stance that must have served him well at Harvard Law Review as he knocked the hell out of the short side of the A/B curve...

So, again the little things can sum up all we need to know on "Leadership Skills". Get ready for "the Blame Game" as he targets a victim for his narcissism-driven gaffe with the new toys...

Good Luck to you all...

Best,

Mike

An easy choice?

If you could choose between Barry Obama or "Socks" as President, who would you choose???

Yes, me too! But I'm afraid Socks will not be available as he was finally put down a few weeks ago after years of serving the nation during the Clinton Administration. You won't be so lucky as you will, in all liklihood, have to endure Obama's misguided policies for decades to come...

Interesting report from Business Monitor International… As per usual, the “real” economic community (not CNN analyst with an AA in broadcasting) differs greatly from what you’ll hear from Executive Branch and Congressional Majority. Have a close look at the “Risks to Outlook” section below.

Only other shoe to drop is the level and extent of dollar devaluation due to massive increase in M2 by new administration/congress… Get ready to make friends with Inflation…

BMI writes:

"Our new -2.8% real GDP growth forecast reflects in part the base effects from Q408, whose -6.2% q-o-q annualised growth result means that the US economy has even further to go to achieve growth in 2009. It also reflects the deteriorating global environment, which will all but eliminate the ability for the US to export its way out of trouble; the likely failure of further banks, which will continue to hurt the availability of credit, the lifeblood of the economy; and the uncertainty of public economic policy, which we do not think in any case will do enough to stave off the worst US downturn since the Great Depression. Overall, US GDP in nominal terms is set to shrink by 1.9%.

The bottom line is that the US is set to consume, borrow, and import less, while saving and exporting more. Although in the long run, these changes will make for a healthier, more sustainable economy, there will be some severe pain along the way. While the conditions will not be nearly as bad as they were during the Great Depression of the 1930s, they will be bad enough to make this a 'Great Recession'. "

Further bad news for the housing market, follows:

"Housing market has further to fall: One of our preconditions for a US recovery is a bottom in the housing market, as the residential mortgage fiasco is at the heart of the downturn in many ways. The housing market is clearly in depression, and we do not believe that we have yet arrived at a bottom for housing prices by any stretch of the imagination. The inventory of available houses is at over nine months, versus below five months prior to the housing boom earlier this decade, although mercifully, this number is declining. Various estimates have put the percentage of mortgage holders that are in negative equity is one in 10, with some forecasts in the marketplace of a 25% ratio at the bottom of this cycle. In any case, the Federal Reserve has estimated that household percent equity has reached an all-time low, of 43.0%. According to the Case-Shiller indices of prices in 10 major US cities, house prices have fallen by nearly 30% from their peak. We believe that house prices could fall by 50% or more peak-to-trough, given the recent historical data offered from other residential housing bubble-and-bust economies, such as Hong Kong and Japan in the 1990s. As such, writedowns on mortgage-backed securities will continue, and household wealth will continue to be destroyed."

Finally, the excessive marketing from the White House and Congress about the efficacy of the myriad bailout packages now plummets towards its manifest destiny as a failed portfolio of ill-formed rescue packages dutifully follows BMI's Risk Outlook section below:

"Risks To Outlook

Proponents of an early economic recovery typically point to two factors: monetary policy and fiscal stimulus. While we believe that these will certainly help to cushion the blow, it will simply not be effective enough to prevent a severe contraction. We have already staked out our position on the inefficacy of monetary policy in the midst of a debt-deflation spiral. Take, for example, the destruction of wealth: with households losing US$12.8trn in net worth since the beginning of Q307, the Federal Reserve's US$900bn increase in the adjusted monetary base does not appear that large. While in normal times, that base money would be multiplied by bank lending, the effective insolvency of many major institutions, and the mindset of deflation, mean that monetary stimulus is not going to have the same bang for its buck as it usually does.

We would also caution that while the fiscal stimulus package is going to have some effect, much of it is not going to kick in immediately, and it is no substitute for the economic dynamism of the private sector, especially over the long run. In fact, we would argue that one of the biggest contributors to the lack of confidence is the uncertainty over the public policy outlook, as evidenced by the gyrations of the stock market upon news that the government has decided to change tack once again. "

Socks, where are you when we need you?!?

Best,

Mike

Dubai? No, I'd suggest selling ASAP!

Good People,

I wanted to share some comments I recently received from a good friend and business associate, Pia Ault, who currently lives in Dubai. She has been there long enough to see both sides of the equation: Boom & Bust... For a time, the Emirates (read Emirs) made the suggestion that they were immune to a downturn in Oil Commodities pricing, and perhaps an economic downturn in general... Seems the perpetual geyser has been downgraded to "dribble" status...

Pia's comments:

"Data is good but sometimes it's interesting to personally observe what happens around you....

The National - our local newspaper, yesterday on the front page reported that IMF says GDP growth will slow as economic crisis continues, yet on page 3 several sheiks (and thus almost by default ministers) said there "is no crisis in Dubai" - "people are absolutely NOT leaving by the airplane load, leaving cars at the airport (with and without keys) and the govt still issues 1000 visas per day". Hmmnn, must be why I saw a car auction last week for 2000 hi-end cars. "Slightly used 2008 Porsche Cayenne, no keys available, for sale at great discount"!! That also explains the mile long line of Indian men at the check-in counter in terminal 3 the other day....no, there is no crisis here!

Usually we have construction 24/6, Fridays are absolute with no exception holidays, so quiet - but now there are no night shifts, Saturdays too are quiet, the 65% of the world's cranes at full stop. The line of sewage trucks going to the treatment plant, usually 3-4 miles long, have been reduced to 30-40 trucks.... construction projects on hold = less workers. Less workers = less crap. Less crap = less trucks - you get the picture. Traffic has become tolerable, people here say Dubai is now like it was in 2006.
However, there are apparently grumbles among the ranks and local Emiratis. The govt injected a lot of cash into - well, the govt, where else, which consists of just the royals - some 420 sheiks. That has caused a stir among the locals. But "there is no crisis".

Rents have come down 30-40% (of course AFTER we signed and paid a year ahead...) and food prices are expected to decrease by 50%.

Between September and now it's a whole different picture. But there "is no crisis". Several friends who have their own enterprises here, are in liquidity as the govt owes them money for consulting or training etc. The shortlist for companies owed money stands at 492, that's just the shortlist. Apparently nobody inside govt and royal families who own most of Dubai, can agree which [govt owned] company should pay the debts.

Anyway, that's my personal journalistic observation from the sandbox! Funny, 4 weeks ago a new law was passed that "journalists will not be jailed, only fined, if they publish anything negative about UAE and the economy and the Royal family"....no there is no crisis and certainly no censorship here!

Pia"

Thanks for sharing Pia... We share your pain here in the USA...

Best,

Mike

The New President of Bubbles...

...No, not Jacko's Chimpanzee!

I'm talking about the Debt Bubble... They would like you and me to think this is all really complex stuff with labyrinthine formulae that nobody less than a PhD from Princeton School of economics could understand.

Well, I have managed to find a short treatise written by another PhD, J.D. Foster (working with the Heritage Foundation) that spells it all out in simple terms. I really encourage you to read through this so you can understand where all this profligate debt creation by Congress and Barry O. will leave us... A very well founded document worthy of your valuable time!

Here is the opening paragraphs:

President Barack Obama and top Congressional Democrats are leading the world toward a new global government debt bubble. The United States appears headed toward a multi-trillion-dollar increase in publicly traded federal debt in just the next two years, with much more to come. Other nations appear to be following suit.

This debt explosion is likely to raise interest rates significantly for government debt, thereby increasing interest costs for future generations. More troubling at the moment, this policy will increase interest rates for all private debt such as home mortgages, consumer loans, and business loans. The near-term consequences of this debt bubble will be a deeper recession, a longer recession, and a weaker eventual recovery.

And the link to the full article:

http://www.heritage.org/Research/Economy/wm2257.cfm

Best,

Mike

A bit late to the gunfight...

...but better late than never, yes?

I received the following e-mail from Senator John McCain's website CountryFirstPAC.com:


Dear Michael,

Yesterday, the Senate began debate on an economic stimulus package that is intended to get our economy back on track and help Americans who are suffering through these difficult times. Unfortunately, the proposal on the table is big on the giveaways for the special interests and corporate high rollers, yet short on help for ordinary working Americans. I cannot and do not support the package on the table from the Democrats and the Obama Administration. Our country does not need just another spending bill, particularly not one that will load future generations with the burden of massive debt. We need a short term stimulus bill that will directly help people, create jobs, and provide a jolt to our economy.

I believe we need to evaluate every bit of spending in this stimulus proposal with one important criteria - does it really stimulate the economy and help create jobs - if the answer is no, it does not belong in a so-called stimulus package. Furthermore, the stimulus must include significant direct relief to American workers in the form of payroll tax cuts and programs to help homeowners keep their homes. Finally, we need an end game to this stimulus so that when our economy recovers, these spending programs do not remain permanent and saddle our children with a skyrocketing national debt.

I appreciate the discussions President Obama is having with my Republican colleagues, but the time for talking has come to an end and we must now begin some serious negotiation. But as of yet, Republicans have not been given the opportunity to be involved. The House of Representatives passed a stimulus bill without a single Republican supporting it. In the Senate, the Democrat leadership is trying to jam the existing proposal through regardless of reservations from a number of members. With so much at stake, the last thing we need is partisanship driving our attempts to turn the economy around.

I have long been a fighter against wasteful spending in Washington and long an advocate for a balanced budget -- that will never change. I realize we face extraordinary challenges with our economy today, but that is not an excuse for more irresponsibly from Washington. I hope you will join me in saying no to this stimulus package as it currently exists by signing this petition.

Sincerely,

John McCain

The link to digitally sign is here:

http://www.countryfirstpac.com/petition/economic.aspx

I'd also encourage you to e-mail your State's two senators and let them know they need to vote "Nae" on this devastating bailout package bill.

Best,

Mike

Another $819 Billion - Down the Drain!

The House voted today to pass the Pork-laden "Stimulus Bill" today...

One glimmer of hope was that not one Republican voted "yea" for this absurd dollar-destroying, pseudo-New Deal gambit that B. Hussein Obama seems wholly enamoured of now that "he won" (his quote to Senate Republicans upon their first meeting last week).

I, for one, applaud this negative response to a program that will (coupled with the TARP bailout bill) be the defining point of the decline of the USA once examined in retrospect.

This post from CNN (of all stilted networks) tells the story of brave Republicans who were able to resist the allure of this Smiling Saint of the Disaffected, President Barry "Oh No!" Obama:

http://money.cnn.com/2009/01/28/news/economy/house_vote_wednesday/index.htm?postversion=2009012818

One of the guys I'm keeping an eye on for 2012 (assuming no impeachment) is House Minority Leader John Boehner (R-Ohio). This guy has it all right in his quote below:

"The underlying bill, while it has some good provisions, has a lot of wasteful provisions and slow-moving spending in it," said House Minority Leader John Boehner, R-Ohio. "We have to act -- we have to heal the ailing economy. The question is how to do it best; we think that fast-acting tax relief is the way to get it done."

Think about it, friends, what would the marketplace be for the promised increased supply of goods and services capacity that the "Stimulus Package" promises if there is no market for said goods and services? You cannot create a demand side for this production if it doesn't exist in the world marketplace, can you? No, I don't think so...

So, in the end, this package and the now Trillions of US Taxpayer Dollars that Congress and the new President seem to revel in spending will only really serve to undermine our US Currency and overall stability in the future.

Sad days indeed... But at least give a shout out to your Republican representatives who today showed unity and foresight (for a change)!

Best,

Mike

They could have danced all night...

Welcome back, sports fans! Hope you had a fine Holiday Season with your families...

Back to business (or lack or business as it were):

There's a new President and so far he has been dancing and having a lot of fun!

Well, the markets voted on Inauguration Day and they voted "No Confidence" in this Lackey and his weak plan for Economic Recovery. In the worst ever Inauguration Day performance the Dow Jones Industrial Average closed down near a 14-year low. S&P 500 was down over 5%.

Here's this report from Bloomberg.com with all the gory details:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aOYw.awwsNSg&refer=worldwide

Now there's reason to dance, no?!?

So, in the spirit of the New Year and making new commitments, let me make one to you, fellow citizens:

I pledge to watch this President, his administration, and Congress and to report and publicize all the liberty-infringing, taxpayer-plundering, Treasury-looting double-speak to the best of my ability. In return, I ask you to do the same within your circle and spread the word. So many are in love with the visage at this point, so our mission will be a difficult one. But one thing I do know is that a smile won't mask this pathetic facade forever. Eventually the Galas, Balls, and gift-wrapped packages end and we are left with the task at hand. Chicanery and condescending laughter won't fix it, and the ratings will plunge, leaving us with another laughable Chief Executive and yet more national debt and trade imbalance.

So, join me this year (and beyond) and let's take our country and, most importantly, our Liberty back. Liberty as our Founding Forefathers intended.

There's a pledge I will not dance around and I am hoping you'll join me in this!

With Liberty...

Best,

Mike