This President is Toast

I screwed up. After months of hating Obama and pleading with people that Obama was going to destroy the fabric of capitalism and bring an extreme left ideology to the Oval Office, I blinked for two weeks. I think it was the week prior to and after inauguration when it sounded like the guy actually had ambitions to be a middle of the road President with a focus on fiscal restraint, hawkish national security views, and a willingness to shut out the extremes of both parties to forge bipartisan agreements.

WHOOPS!

I am back to the thinking the pre-inauguration Obama, the one that had coffee's with Ayers and broke bread with extremists (That would be Palestinian Liberation buddy Khalidi) from any and all walks of life, is back with an even more aggressive approach to taking America on a course from which it may be hard to return.

Lets look at the evolution of the Green Energy and Infrastructure Stimulus Bill. About $800B all in. Green energy and Infrastructure don't even crack a quarter of the bill's total. And when anyone dare's to question the amount of pork in the bill or why we are rushing into such drastic action, we are quickly told that this isn't actually Obama's idea. In fact, this is the idea of "TOP ECONOMISTS." Well now I'm comforted. Our President is using pretty basic negotiating tactics to scam American's into believing its spend or bust.; HIDE BEHIND THE 'EXPERTS.'Chuck Schumer is telling us that American's really don't care about what's in the bill, just as long as its big. And Obama is threatening us with a "get behind me or die" approach that is reminiscent of McCarthyism. Round up the disloyal in hold them accountable. And thanks, Mr. Biden, for letting us know your scientific approach to the bill where there is a 30% chance we "might get it wrong." Well said.

What strikes me as even more hilarious is what people are saying when told Obama is fear-mongering his way into a massive spending bill; "Well, fear is the same approach Bush used to get us into Iraq." HA! When we tallied up the votes based on intelligence info presented to the Senate, nearly 100% voted in favor of the right to use force. But when the Dem's shove close to $1T in untimely, un-targetted pork onto the agenda, the vote was nearly 100% on party lines. Hey folks, guess which party actually as moral fiber?

Now, let's look at Timmy Geithner's down 400-point introduction and follow-up commentary about the bank fix. So it basically sounds like he is re-wording TARP, executing the same plan, but he gave it a name. That's brilliant. The guy supports Lehman going under, saves everyone else, and can't figure out tax day is April 15th every year..yes, even in a leap-year! Sounds a lot like McNabb not knowing there are tie's in football. Either he's a liar, or an idiot. I am going with liar, since he is way too smart to be an idiot.

SMART, btw, doesn't mean much. I was taught my first month on Wall Street that "brains are a dime-a-dozen on Wall Street, but very few people make it big. When you figure out the difference, you will make it." The difference, as best I can tell, is intangible but involves pride, self-respect, grit, anger, ego, and relentless pursuit of goals. Geithner has none of these traits because if he did, he would've either let ALL the banks failed and just gotten through the pain already, or he wouldv'e saved ALL the banks and just accepted that the next 20 years marking the "wasted 2 decades" as we un-wound layers of government spending that completely crowed out any private sector investment. What is it with these politicians? Always half pregnant. Spend and cut taxes, raise taxes and spend more. But never committed to any discipline that ever works.

Write this down - Republicans having finally found a purpose again and I predict that, as soon as structurally possible, Republican's will be back in power in Congress and Obama will be a one and done President as unemployment creeps into the double digits and the Chinese follow up on their displeasure with the Stimulus Bill and refuse to fund our deficit further.

US Banking Bailout Take 75...Action

The WSJ is out with yet another potential government bail-out for the banking industry. The Obama administration, no doubt, planted the article as a feeler to see public response. But given Obama and the money-tree (Holy Cow its Phil Rizzuto...RIP) appear to have no bounds and no checks and/or balances in the new economic team, and the public is brainwashed to believe this is just free money to make them feel better with little to no long-term consequences, a feeler article/idea is just as good as gold these days anyway. So tonight, when you turn on CSPAN (maybe I am the only loser watching, but whatever) and you see the scare-crow...AKA Nancy P...she will undoubtedly talk about a new bailout as if it were A.) Her Idea and B.) Another example of where Bush failed. (Note to all the blind-folded Democrats that think Bush was a big spender...You have know idea what you are in for with your new fearless leader.)


Meanwhile, the cover of the Journal talks about Obama seeking a new era of "FISCAL RESPONSIBILITY." So his down-payment on RESPONSIBLE is a $2T deficit, which he will then over-tax (ever look at the Laffer Curve Mr. Prez?), which will then lead to a massive revenue short-fall, which will then lead to a another Greenspan era of over-lending to generate the Government's whopping 1.2X multiplier....

And you wanted to be long the dollar? Good one! No, the other countries aren't as bad as us or worse because they accept they are socialists. We keep trying to run a free-market capitalist society in the construct of a socialist fiscal system. That's why Bush failed...Low taxes is a way to speed up the private sector and shrink the government. He tried to lower taxes and spent like a mad-man.

Thanks for pissing me off Mr Journal. I know it's not your fault, but how about an article on Palestinian's bombing Israel 3hrs into a cease fire? Oh, that's Israel's fault too..they shouldn't have worn black suits since Palestinian's hate black.

Bush vs. Obama

If American's had the ability to ignore party lines for a minute, the comparison would likely aggravate Democrats and elate Republicans.

Bush's Legacy:

1.) Showed up in 1-20-09 on a platform or conservative values and smaller government.
2.) Had his plan tested with 9-11.
3.) Executed a justified response in an un-Republican manner.
4.) Began a Congress supported, veto-proof spending blitz.
5.) As a result, government grew, and monetary supply was needed, thus the overly lax FOMC policy.
6.) Responded to Recession with anti-Republican 1x stimulus checks that did nothing.
7.) Allowed Paulson and Co to support the socialization of American Capitalism.
8.) Choked on a Pretzel.

Obama's Path:
1.) Ran on a platform of Marxist/Socialist values.
2.) Surrounded himself with terrible friends and confidants.
3.) Proposed tax increases for the 'rich'
4.) Gets elected and it all changes.
5.) Starts building a cabinet, back tracks on liberal campaign promises, makes it harder for the auto's to get bailed out.
5.) Keeps Gates in charge of the war.
6.) Marginalizes Reid and Pelosi (see below.)

But Obama ultimately will have to continue down a path of conservative values to prove he is Reagan-lite. The stimulus package could ultimately lead to a death spiral of inflation that rips apart domestic capitalism. But based on the transformation from candidate to President-elect, I am hopeful (terrible strategy to be hopeful vs. realistic, but what choice do we have?) that the stimulus package is ultimately spent a little more pragmatically over time, similar to how the first New Deal was supposed to be executed before everyone folded to the "GET THE MONEY SPENT TODAY BEFORE ITS TOO LATE" mentality."

Bush? Not a Republican. Yes, he is still a social conservative, but do we care more about Gay Marriage or dominating the global financial landscape? I take the latter and leave the former to people's own personal choice.

Obama Marginalizes The Know Nothing Know it Alls

Cavuto reminded me of a famous quote last night:

"There are two types of economists; those that don't know anything and those that don't know they don't know anything."

Couldn't be more apropos to the current environment, but taking it a step farther, there are also those that don't know they don't know they don't know...

Case in point: Pelosi and Reid.

First, neither of them know what they are doing. They both represent states (Ca. and Nv.) that were are the epicenter of the financial crisis, yet speak with a sense of moral superiority to the common man. California, yesterday, declared a State of Emergency due to a fiscal crisis resulting from the most liberal fiscal policies in the country.

But what they really don't know is that they are about to be marginalized by a power-house team Obama is putting together that doesn't like to play games and doesn't want to be bullied by ideologies. Love-em or hate-em, Obama has a team full of people that are working to build legacies as reformers that actually get goals accomplished. And so far, bipartisanship is no longer the longest 4-letter word in DC within the Obama coalition building.

Pelosi? She deserves it.
Reid? It's why we need term limits!

How to Prevent a Depression

I am so tired of all the back and forth and over-intellectualizing and man-hours that have been wasted on trying to rescue this and save that. This problem started with, and can only be helped by fixing the problem of home values.

This solution is so simple, its embarrassing to post because it doesn't even fill 20 lines.

START ADJUSTING THE LENGTH OF PEOPLE's MORTGAGES. Take TARP money, and create a lending pool that banks could use to meet their funding cap created by lower monthly payments. The extended term, and greater amount of interest payments over time, creates a synthetic tax cut."

Please note I said length, not value. Please not I said this will help, not cure. But in that context, its the best solution because nothing has gone as far as to even help at this point.

Why would it help?

Confidence: If people can stay in their homes on a 50 year mortgage instead of a 30, they no longer worry about day to day and maybe spend $5 to rent a movie. Confidence matters a lot. In Japan, people saw the writing on the wall and started buying safes.


It's not really a bailout: The homeowner's still pay face for their homes, just over a longer-period. Trust me, they will be thankful, but this won't make em rich. They will be stuck in an upside down home for a very long-time and better make plans to retire at the same home because they aren't going to building much equity on a 50-year.

TARP Lending: TARP is used as a Fed Funds type of vehicle that enables banks to quickly and cheaply meet overnight funding gaps from lower monthly mortgage payments. It's just that simple. The government has nothing at risk in this case. We don't have to worry about a return on TARP money and whether our preferred equity in AIG will pay off. Instead, the government creates some of the highest velocity money in the world every day, and is paid back every day.

Welcome Aboard

Welcome to what is sure to be the best blog on the web that no one has ever heard about. It's kind of like the best golfer to never win a major or the best quarterback to never win a ring, only I don't get PAID TO FAIL.

Which leads me to topic number 1: PAID TO FAIL

In the "want something for nothing" decade, driven by instant gratification, terrible parenting, leftist/socialist government, leftist education, and a media system that derelicts its reporting duty and sways popular opinion with biased information, everyone has their hand out.

Ford, GM, Chrysler, Citi, Lehman, Bear, JP Morgan, Wells Fargo (though they didn't want the money but Paulson coerced them into taking it as a "Patriotic" move), Goldman, Merrill, Banc of America, UBS, Barlcays, Fannie/Freddie, all have their slimy, grubby hands in your pocket.

But Why? Why is it socially acceptable and almost universally expected that failing is not only OK, but should be treated with great sensitivity towards the poor sufferer?

Let's start with Dodge Ball. You know, the game where a bunch of 8 year old kids run around and toss a soft ball at each other with the goal of being the last one standing?

Well, in the 1950's-1990, Dodge Ball, along with Tag and Little League, were great games for kids. Such activities fostered a competitive but fun, spirited environment where the goal was to win or finish better than the last time you played.

But a sudden sensitivity movement made it so there could no longer be winners in Dodge-Ball, and if you pitched the ball to fast for your age you were no longer allowed to pitch to kids in your age group. And if you scored too many touch-downs in a high-school football game, your team was suspended and forfeited a win...because you were too good. And on the other side, the the bad team that would finish 2-8 for the high-school football season was suddenly incentivized to be much worse than bad, with the goal of losing by as many points as possible so they could challenge the game and ostensibly be outscored 1-million to zero and finish the season 10-0.

If a kid played Dodge Ball too aggressively, he was told to slow it down, dont make the other kids feel bad by winning. In other words, "Don't Live Up To Your Potential."

Now these kids are working in government, working at Citi, working for the news papers. And they are using these life-lessons to tell you to back off Citi for loading up its balance sheet with bad debt, don't get mad at GM for making bad cars, and leave poor Fannie Mae and Freddie Mac alone. They all tried really hard to do their best. Honday and Toyota? Sure they make great cars. Sure they build them in America. But their cars are way too good for the price and we should not help their businesses do better because the poor people at GM will be hurt.

So lets all open our wallets up one more time and make sure the execs. that flew in on their private jets aren't forced to ever fly first class. We wouldn't want them to have a bad day because of our insensitivity.