RATZINGER AT IT AGAIN - ANTI-CHRIST?

There are religious among all the financial issues. Ole’ Pope Benedict is at it again. He has an agenda like I mentioned some time ago. My mother (the big Catholic) says that once a Nazi, always a Nazi and that is what she thinks of Benedict.

She may have a point but I think it is his German-ness that is showing. What did he do this time? Well you probably don’t remember but after Vatican II liberalized the Catholic Church, many opposed the “new” rules and vowed to never accept them. One of the changes was allowing Mass to be said in a language other than Latin.

This group of Catholic clergy that opposed Vatican II rules among other issues were joined in a group called SOCIETY OF POPE PIUS X which was founded by the infamous French Archbishop MARCEL LEFEBVRE in 1970. He was against all liberal reforms or how about ALL reforms; he lived in the past.

This renegade Archbishop named other clerics to bishop positions and held his own masses in Latin. At that time, Pope John Paul II excommunicated the whole bunch.
Now Benedict also known as Joe Ratzinger, reinstated the bozos. Yes, he reversed John Paul’s excommunication order - got balls?

I told you before that Ratzinger is going backwards. He prefers a smaller Church but a Church with right-wing twits and no flaming liberals allowed, except young boy liberals or all young boys no matter what their ideology.

In going backwards, Ratzinger also re-instated Easter prayers that called for Jewish conversions. This prayer was thrown out because it insulted Jews; I guess Ratzinger don’t care about them stinkin’ Jews that killed Jesus. The Jews responded by breaking off relations with the Vatican - nice move Ratzinger; the previous Pope tried to mend relations between Catholics and Jews and you basically just ripped them apart again.

Back to the men he reinstated as Bishops. Well, one of them denies the Holocaust and believes no Jews were gassed in WWII. Do you see the type of people Ratzinger wants to bring back into the Church?

ALERT: RATZINGER / BENEDICT IS THE ANTI-CHRIST!

WE SHOULD NOT STAND FOR THIS ANYMORE...

Here is another item that caught my eye. Lately I have been livid at the behavior of some people and institutions on Wall Street and the fact that they were getting away with it while the poor ole’ taxpayer is being taken for a ride.

But just as I was aghast at the woman having octuplets on top of the six she already had, I was also dumb struck by incredible stories about our financial institutions.

John Thain, CEO of Merry Lynch was watching the company die but while it was drowning, he remodeled his office for 3.5 million dollars. I have never imagined that an area rug under my desk could cost $100,000 or that a garbage can that I throw my garbage in could cost thousands. The question here is WHAT WAS THAT MAN THINKING?

His company was going bankrupt and he is remodeling his office. He also approved millions if not billions in bonus money to be paid before the year is out and before the company was acquired by Bank of America. He said he needed to pay the bonuses to keep good people at the firm. Many people do not buy that logic since it is these “good” people that drove the company into the ground and who would want to hire such people?

Actually, many of these people have a loyal client herd that follows them and so they are paid big bonuses to keep their clients at a specific company. Anyway, the timing of the bonuses as well as the remodeling could not have been worst!

The same could be said of CITIGROUP buying a $50 million private jet while accepting billions from the taxpayers to prop it up.

President Obama even made a point of scolding Wall Street and banks for the above actions as irresponsible behavior that cannot be condoned. I am happy that some prosecutors are starting to look into possible illegalities surrounding this irresponsible financial behavior.

A social side note on this stuff is the new song written and recorded by JOHN RICH called ‘SHUTTIN’ DETROIT DOWN”. Music has always reflected the “times” and there are many protest songs from our history.

This particular song is about what I just wrote about. The millions in bonuses given out while the working man suffers. It is very creative and I think will become some type of rallying song for people getting madder and madder at the shenanigans happening on Wall Street, in our finance system and in our government.

“My daddy taught me in this country everyone’s the same
You work hard for your dollar and you never pass the blame
When it don’t go your way

Now I see all those big shots crying on my evening news
‘Bout how they are losing billions
And it’s up to me and you
To come runnin’ to the rescue!

Well, pardon me if I don’t shed a tear
They’re selling make-believe and we don’t buy that here

Cuz in the real world they’re shuttin’ Dee-troit down
While the boss-man takes his bonus pay and jets on out of town

D.C’s bailing out them bankers
As the farmers auction ground
Yeah, while they’re living it up on Wall Street in that New York City town
Here in the real world they’re shuttin’ Dee-troit down
Here in the real world they’re shuttin’ Dee-troit down

Well my granddaddy worked hard in that plant most of his life
Now his pension plan’s been cut in half and he can’t afford to die
It’s such a cryin’ shame cuz he ain’t the one to blame

And when I look down and see his callused hands
Well let me tell you friend, it gets me fightin’ mad

Cuz in the real world… "

You know my views on capitalism, socialism, unionism and the like but I tell you now, working people have something to be pissed off about because they were pissed on and I think people should start demanding something to be done about the people and institutions that put us in this very precarious position, endangering us and our families and making our futures very uncertain - STAND UP AND TELL TEM YOU WILL NOT TAKE THIS ANYMORE!

MEDICAL MORONS!

Man do I have a lot of topics on my mind; many of them just mad raves at how stupid people and institutions are.

Let me just start with a story that just pissed me off to no end when I started hearing the details. The usually happy story of the birth of OCTUPLETS in LA, California turned ugly when people learned that the mother who may be a single mother living with her parents, already had six (6) kids at home.

It took over 50 doctors and nurses working in teams at Kaiser Permanente to deliver the eight preemies (they only expected seven (7) and were surprised to find one hiding. The doctors appeared on TV at a joyous press conference bragging how hard they worked and how good they are. The whole exercise probably cost millions and millions of dollars that WE get to pay for.

Why would a mother of six that probably has no husband or job want another eight to add to her brood that she can never support or even care for adequately? She obviously must be deranged BUT how about the physician that obviously knew about her six existing kids go ahead and implant eight embryos? Did he do it as an advertisement of his skills? What about medical ETHICS?

The medical profession is all up in arms because obviously we need some regulation here and the docs don’t want the common man from regulating their godly profession but it is obvious that their profession NEEDS SERIOUS REGULATION cause’ they’re too dumb to do it themselves!

I am not only talking about the idiot doctor that implanted the embryos but what about the whole Kaiser medical system even agreeing to it in the first place and paying for it? This whole thing should have been stopped at the “idea” stage NOW IT NEEDS TO BE A PUNISHABLE OFFENSE!

Just in: The mother has never been married. Has a college degree. Grandmother wants to disown her. Always wanted many kids but did not want to get married (probably ugly as sin).

This story should be quite interesting as it develops!

RESPONSES TO BLACK DETROIT QUESTION

My previous blog “IS CALLING DETROIT A BLACK FAILURE RACIST”? was prompted by a white, city attorney, so frustrated with a basically black court system, she called it a “Ghetto Court” at which point she was called racist and fired from her position. My blog sought to explain the “black political culture” in Detroit that is so ruinous to the city.

I was very buoyed by letters to the editor from black residents of Detroit that agreed with the fired lawyer that the Detroit court was dysfunctional and ill managed and that judges on the court were plainly incompetent (judges are elected). They went on to say that hiding one’s incompetence by playing the race card is unacceptable in this day and age.

The fact that some black Detroiters themselves are fed up with the city’s incompetent bureaucracy which is stymieing their business or personal progress, is the best sign ever that change may be on the way.

These Detroiters do not see just black or white, they see competent or incompetent, qualified or a political/family appointee, they see themselves as part of a unified Detroit, a Detroit that needs desperately to shed its racist culture and start to behave (vote) like a city that is ready for real progress and growth.

OBAMA: The first days

Well we have a new president. I watched the inauguration at work and the rest of the festivities at home after work. My wife was crying most of the time and I was wondering how self-controlled that man was; I would be a total wreck especially when Roberts and Obama flubbed the swearing-in – don’t they rehearse?

I also could not believe the energy the first couple had throughout the day and into the night; they must take drugs or something. The whole affair was very well done.

At work I heard a variety of opinions about the inaugural but one especially caught my attention; it was about how Obama is being claimed by African-Americans as their very own. The person said she voted for the man because he was the best candidate but also because, to her, he was mostly white except for his skin. He was raised by his white mother and her white parents, his grandparents with his Kenyan father (the black factor) having hardly any role (but biological) in his entire life. How can this man call himself black?

I have touched on this subject before and Obama himself has spoken about his gratitude to his mother and grandparents for bringing him up the way that they did BUT he also knew the realities of race in the U.S.; your skin color determines who you are not the percentage of white or black blood.

Obama knew he had to run as a black man because he was viewed as a black man. At first he was having trouble convincing African-Americans that he was like them; he wasn’t. His father was actually from Africa and not an American of African decent. He grew up white and they knew it BUT in the end they embraced him and boy how they embraced him – did you see the inaugural?

I talked to my co-worker and asked if it mattered if she voted for the white Obama or the black Obama, especially when she saw the unifying effect he was having on the whole country. Yes, the blacks were ecstatic but they had a right to be; white America finally elected a man of color which means more may follow. More importantly, black youths have a role model; the highest role attainable by any man or woman – period! And even more importantly, we as a society may finally be leaving racism as a phenomenon of our past with no role in the present or future.

I feel much buoyed right now, full of hope but I have already heard words from the dark side. Our new Catholic Archbishop in Detroit made comments about the unacceptable pro-choice position of our new president while conservative media commentators already finding fault with the president in his very first day on the job. Well, some people will never change but let’s kick ass anyway!

WE ARE THE ONES WE WERE WAITING FOR

IS CALLING DETROIT A BLACK FAILURE RACIST?

Today, an article in the local paper, told of a Detroit city lawyer being fired because she called the district court a “Ghetto Court”; she is white, the court is mostly black.

Why did I react to this article, because I think, in general and specifically in Detroit, the race question needs to be revisited?

Let me tell you about Detroit and then you tell me what you think.

Our former black mayor is in jail. He took his blackness and the blackness of the city of Detroit to new highs (or is it lows). He ran the city like his personal kingdom and the citizens of the city allowed him to; hell, they adored him. He stole money, appointed only friends and family to city positions (no work experience required) and sold city contracts to friends and family. He was a family man that slept with his assistant and who knows who else but maintained his devotion to his family.

He was caught lying in court and using city money for personal matters among many other illegalities that will never be fully exposed. Right now the FBI is looking into his empire.

One thing to remember, many Detroit residents rallied behind him including the Baptist ministers of the city because “he is a good black man”.

The Detroit School Board is black. They behaved and behave today just like the Mayor did. Contracts to friends and family, kickbacks, total fiscal irresponsibility to the point that Detroit students had to bring toilet paper from home. And by the way, there were no textbooks for the students but there was a $100,000 publicity campaign trying to promote the “great” education available in Detroit Public Schools. The graduation rate is the lowest in the nation.

They hired a black superintendent that promptly called them incompetent, so they fired her and blamed all financial problems on her.

In the past, a white Republican Governor took over the schools but the cries of racism were so loud that he gave up control to the elected board; the schools sank even lower.

The white, female Democratic governor knows she needs to take over the schools for the sake of the children who are mostly black but she is scared of being called a racist so she demurs.

The Detroit City Council is black (one white woman that used to be married to a prominent black, she actually is the step-mother of the current Mayor and former council president). They are elected at-large so they do not represent any specific region in the city and they vote down all calls for a ward system in the city where members would be elected from city districts.

They are mostly clowns with a few serious members who usually are overshadowed by the clowns. One is a former Motown singer and one is the young wife of Rep. Conyers, a powerful House member. She is currently in Israel trying to solve the Palestinian problem?

The Council is a joke. It is incompetent, stupid and rude but Detroit citizens keep reelecting them because they are black. We have a sizable Hispanic population in Detroit but they will never see representation on the council because council members are elected at-large and always will be.

I don’t know much about the District Court in Detroit but obviously the elected judges are probably reflections of the city and the other governmental bodies in the city. The white lawyer, who represents the city, probably was frustrated and instead of saying she was sick and tired of the “black” culture on the court, she called it a “ghetto” court which is basically the same.

So here we are and I have only touched on a few things that make Detroit suck. Is it a black problem? We have a black president and many black officials that are outstanding in their fields so it is not a black thing but it may be a Detroit black thing.

My wife, who is white, is in charge of the annual MLK (Martin Luther King, Jr.) parade in Detroit and celebration program. She has done this for many years but this will be her last year mainly because she sees it is hard to get people to participate and now that we have elected a black president, she feels MLK’s dream has been realized. She will look for other “good” deeds to perform for the poor and downtrodden.

What is my point? My point is that today, if we see gross incompetence that is hurting a city and its people, we should be able to point it out without getting labeled racists; I think the race card needs to be torn up and anyone that plays it should be ridiculed as someone using race to cover up his /her incompetence or wants to get something for nothing.

Will Detroit ever change? Young, smart blacks are moving out to the suburbs leaving the older blacks who make up the voting mass. Don’t get me wrong, there are many black residents in Detroit that cannot stand what is going on in their city but they are a minority in a minority which is really a majority in Detroit.

The jailed Mayor Kilpatrick was a smart, young black man that exploited his race and his people instead of helping them. A slew of new black men are now running for Mayor of Detroit. Will they all succumb to the “black” political culture when they take office?

One of them is a former Piston’s NBA player, Dave Bing. He is older and has a proven track record as a business man (lived in the suburbs but now rents an apartment in Detroit because you have to be a city resident to run for mayor).

In the past, Detroit also had an “Irish” political culture and a city suburb (Hamtramck) also had a “Polish” political culture, so I am not saying this is uniquely a black issue but in today’s Detroit, it is. Another close- by city to mention is Dearborn which today is emerging as an “Arab” city.

The stark difference between Detroit and other “ethnic” majority cities is that the other cities worked and prospered and continue to prosper while Detroit has been and is a dismal failure.

The city of Gary, Indiana also comes to mind as an example of an all black failing city that saved itself by electing a “white” mayor, not because the mayor was white and therefore somehow better than a black mayor would be but because the mayor was white, he did not belong to the inner black community that so strongly controlled the actions of previous black mayors.

Barak Obama is a great example of a black man who is president of and for the whole nation not just the blacks (he is white also). Can a black mayor be a mayor of the city of Detroit and not only of the black citizens of Detroit? The other way to ask this question is will the black citizens of Detroit allow a black mayor to be mayor of the city; the whole city and all its inhabitants?

Let’s bring this to a close already if we can. Can anything be done about the culture in Detroit? - probably not; since we can’t change how the black voters think and feel. Can we win the right to criticize without being called racists? -probably not, the race card will be played until we make it into a negative recognized by both blacks and whites. I am hoping Obama’s presidency helps us take race out of issues once and for all!

SUPPLY AND DEMAND STILL AT WORK HERE

Coming back to the subject of our economy I am getting a little ticked off at our government and the way they are handing out billions without a plan that I can see. I am talking about the Bush government and their recent infusion of over $100 Billion into the Bank of America on top of what they already received.

The “too big to fail” argument for bailing out companies tells us what needs to be done. Reduce all companies to manageable size so they can fail without tanking our entire financial system. Citi Group is already cutting itself up into manageable entities after years of acquiring companies and making itself into a monstrosity.

That aside, the basic principals of supply and demand are at play in our economy as well as the world economy and as simple as those principals are, many lose sight of them when trying to fix our economy.

What is happening right now is a lack of demand. People are losing jobs, have lost 50% of the value in their investments, have lost homes to foreclosure and now will hold on to every penny they have just to survive.

Without demand (spending), businesses cannot sell their products or services and therefore they stop manufacturing and when they do that, they let their workers go. These workers become the masses that have no money to spend or are too scared to spend. You do see the cycle here, right?

The government must boost demand (spending) to get things rolling again. So it spends like mad by creating jobs that pay good money which workers will then use that money to spend thus creating demand – kapish?

The workers will build and repair highways, repair schools, expand the internet broadband system, install energy efficient systems in public buildings among other things. These are necessary things that need to be done so we are not paying artists to paint pictures as they did in the 1930s.

The problem is that this government spending is what is called “stimulus” spending hoping to stimulate the economy to once again start cycling normally; demand followed by providing supply which requires jobs which creates more demand, etc……..and stimulus spending is short-term spending meaning the jobs are not permanent. Workers that know their jobs have limits will not feel safe enough to start investing and buying; they will hold their money close to their vests, saving it for the time when the government stimulus job ends.

This same type of stimulus spending was tried in the 1930s to no avail. I am going to have to find out what the Obama rationale is for his $850 Billion stimulus package because right now, I just don’t see how it will work (in the long run).

BUSH'S BULLSHIT FAREWELL SPEECH

I listened to President Bush’s farewell speech last night because it was history in the making and I didn’t want to miss out.

It was sad and I felt a little embarrassed for him. I realize that he is not that bright and probably was forced into the presidency by his handlers but he must be, at least slightly, aware of how much he fucked up the U.S. as well as the world; you would have to be a total robot not too. I predict he will go back to drinking if he hasn’t already.

Right off the bat he says that he has created a great new democracy in the Middle East: Iraq. Bullshit, I have been saying all along that he sank billions of our dollars and tons of American blood into a fool’s quest. They can’t wait till we leave before starting their civil war which will lead to a theocracy; another Iran.

He then had the nerve to say that he had saved Afghanistan from the bad ole’ Taliban and women and girls there, no longer are treated like cattle but are free to even go to school. Bullshit, the Taliban are winning and women are still treated like cattle and there is no end in sight. Al-Qaeda is getting stronger and stronger and he is responsible for their resurgence.

He tried to say that 9/11 changed his presidency. Bullshit, his plans to invade Iraq were drawn up long before 9/11 and so the bombing of 9/11 did nothing to alter his plans and that is why Afghanistan is in such bad shape and al-Qaeda is in such good shape.

He protected us from further terrorist attacks. Bullshit, he was lucky there were no further attacks and he didn’t even do what the post 9/11 attack committee recommended be done to prevent further 9/11s.

He did everything he could to help Katrina victims. Bullshit, his inaction will go down in history as the biggest governmental fuck up ever.

Towards the end you could tell he was tired of lying and just wanted to go get that drink!

WARNING: Global Trade in Danger?

This is just a quick note on a previous blog where I reiterated the absolute need to maintain a free global trade system if we are to get out of our economic depression in a timely fashion.

I specifically cited the unions in the United States as possible deterrents to helping our economy get better because one of their goals is to protect jobs in the U.S. by limiting or canceling free trade agreements like NAFTA (North American Free Trade Agreement).

They intend to do that with ridiculous requirements that all NAFTA workers be unionized and get wages similar to what U.S. workers get currently. Obviously, those requirements just negate the agreement and prevent free trading to go on even though NAFTA has been proven to be a huge boon to U.S. trade interests.

Today’s Wall Street Journal reports that Trade has fallen worldwide by large percentages. In the U.S. imports / exports are down 18% with imports sliding more than exports. The fact that our exports fell only slightly is a good sign that our goods are still valued and wanted by importing countries. The fact that our imports have fallen dramatically means that we, as consumers, are not buying as much stuff as we did in the past. Eventually, those imports will be offered at lower prices, which is good for our economy.

The fact that this is a global phenomenon with certain countries like Japan suffering much bigger losses is not a good sign since it signals that demand is falling worldwide and that can bring global trade to a standstill, which is what happened in the 1930s, which led to a global depression.

Another report suggested that countries may be slowly playing the “protection” game by making it harder and harder for imports to get in and compete with domestically produced products. If this is in any way true, then this could turn into an epidemic which would make our global economic situation much worst than it has to be. If our unions see other countries make moves to “protect” their domestic manufacturing, they will demand the same from our government and then they will have good reason to do so.

The is an organization (WTO) World Trade Organization that is suppose to police global trade to make sure there is no violations of the free trade agreement. I don’t know how strong the WTO is or if it can really control what individual countries do with their trade regulations but I know this is raising a red flag we should all be aware of.

Since over 50% of my business is in export, I worry a lot. Lets see what happens next…

THE GREAT DEPRESSION: Public vs Private

In continuing my study of the Great Depression of the 1930s, I am struck by the fact that economists are more interested in why the depression lasted so long than what started or finished it. This is hugely important in light of the massive intervention from the FDR government at the time and today, with Obama poised to massively intervene in our economy again.

The big difference between the 1930s governmental intervention and the 2009 version is that FDR created millions of “government” jobs whereas Obama will create millions of “private sector” jobs; the distinction is very, very important.

FDR created government agencies like the WPA that hired people to do certain jobs. FDR was anti-big business and blamed big business for the depression (socialist). In fact, FDR competed with the private sector (business) and in so doing prolonged the depression.

Let me explain this further by contrasting what FDR did with what Obama will do. Obama has also stated that he will create millions of jobs but these will be private sector jobs. Obama will give billions of dollars to states that in turn will give the money to private companies to perform certain tasks. These tasks will involve many areas including infrastructure (roads & bridges), schools, medical facilities, etc. The companies charged with performing these tasks will have to hire people to work on these tasks.

Companies will prosper, people will find jobs, local governments will collect taxes, workers will spend money and things may start getting back to normal.

Under FDR, businesses got nothing; well we cannot say that they got nothing. They did get higher taxes on corporate profits and they did get unions rammed down their throats (Wagner Act – NLRB). I am not saying that big business was a bunch of angels helping the common folk; they did need some slapping around but not to this level and not at this time.

Businesses, scared of FDR, basically just laid low; no expansion, no investment and no new hiring; they just didn’t know what to expect from FDR and his regulators.

Unlike FDR who used high corporate taxes to fund his public projects, Obama promises to cut corporate and personal taxes to help businesses expand and give individuals cash to spend. This goes against Democratic Party thinking who, like FDR, prefer to use tax money to fund their social programs.

Obama is sending a signal to the Republicans that he will not just soak the rich or those with money, to give to the poor or those who need money. He will let market forces stir the economy back into action with a little help from the Feds.

Potential problems that could derail Obama’s efforts have to do with labor and the unions. Under FDR, unions were allowed to grow and gain power. Under FDR wages and rules of employment were regulated by the government in effect, preventing businesses from operating their companies as they saw fit.

Today, unions are already getting ready to pass legislation that will give them more power to organize various businesses without secret ballot elections; they call this the Freedom of Choice Act.

They are also getting ready to dismantle the requirements demanded by the “auto bailout” contract that unions reduce their benefits to that of the foreign auto companies operating in the U.S. The contract specifically stipulates that if the unions call a strike against GM or Chrysler, the Fed will ask for its money back immediately which would, de facto, force GM and Chrysler into bankruptcy.

The unions are saying that as soon as Barack is in office, they take over and make things union friendly again.

FDR was anti-big business and pro-union and that was a big factor in prolonging the Great Depression. Obama cannot afford to follow FDR’s footsteps because many of those footsteps actually caused damage to the 1930s economy and will do the same to our current economy.

GREAT DEPRESSION: Trade

I have started examining the Great Depression of the 1930s because I think I may learn something from that time in our history that may be of value in handling our present economic predicament.

I am reading the new book THE FORGOTTEN MAN; A NEW HISTORY OF THE GREAT DEPRESSION by Amity Shlaes, a senior fellow in economic history at the Council on Foreign Relations and a syndicated columnist for Bloomberg.

Obama is getting ready to unleash his $800 Billion stimulus package among other actions to get us out of our depression which is very similar to what FDR (Franklin Delano Roosevelt) did when he took office in 1933. Please remember that Herbert Hoover was elected president in 1929 and was president during the first four (4) years of the Depression period and is responsible for some government actions that impacted the U.S. economy.

One of the first big economic errors committed in the 30s was the Smoot-Hawley Tariff Act signed by Hoover in 1930. It basically killed international trade by raising tariffs on imports. Countries responded to the U.S. action by raising tariffs on American goods. Yes, Congressmen at that time thought they were protecting American jobs by eliminating foreign competition but they were actually blocking free trade and with it, the overseas demand for American goods which hurt American manufacturers and exporters which worstened the depression and made it global.

Today, we run a trade deficit and have for many years but our exports are a huge part of our economy especially in the last few years when the dollar has been down versus other currencies.
To repeat the tariff mistake of the 30s by hindering today’s import / export market would be totally irresponsible.

I say this because Obama is a Democrat and the unions feel he owes them for his victory, and what the unions want is to protect domestic jobs which they feel are threatened by "outsourcing" them overseas where labor and overhead are much cheaper. They want free trade agreements like NAFTA overturned and they do not want anymore free trade agreements (like the one with Colombia) enacted. In essence, the unions want to curtail free trade because they see it as anti-union.

You can see that this is basically heading in the same direction and will do the same thing to our economy as the tariff act did to the economy in the 1930s.

I have reason to believe that Obama, even though appearing as union friendly, would not harm our economy by giving in to union demands to protect jobs at home by limiting free trade. The lessons from the Great depression are quite clear; lets make sure we learn from them.

REFORM OUR FINANCIAL SYSTEM #3

OK, one more rant (suggestion) about our financial system.

Undoubtedly you have heard some talk about the “credit –default swaps” that have crippled many large firms including AIG, an insurance behemoth that was “too big to let fail”.

The hardest thing for me is to accurately define this financial instrument. I have a “derivative swap” arrangement with my bank when I bought the factory building five (5) years ago. It is kind of complicated but in essence it is a protection for both me and the bank against crazy interest rate fluctuations; sometimes I pay extra and sometimes the bank pays extra, keeping both of us in a controlled interest rate spread. This is a valid financial instrument that is of benefit to both mortgage parties.

The “credit-default swaps” that are causing all the trouble appear, as the name suggests, an insurance policy “against” the possibility that a loan will not be paid back. Well it appears that a logical financial instrument has morphed into something no one understands anymore.

The Wall Street Journal and the New York Times tried to define the “credit-default swap” as a “side bet” indicating that the person purchasing the swap is not a principal in the credit/loan transaction to begin with?

The example they use is if “you” purchased a fire insurance policy on your neighbor’s house. Let us say the neighbor’s house is worth $100,000 but the policy you bought will pay you $500,000 if the neighbor’s house burns. And lets say that your neighbor’s house does burn and you file your claim with the company that issued the policy but that company has no funds to pay off the policy because since the “swap” policy is an “unregulated” financial instrument, no capital requirements were in place.

I realize this is a rather complicated concept to grasp and I don’t want to suggest that the “swaps” were all about fire insurance, they were not, but policies worth TRILLIONS $$$$ were taken out and when companies like AIG could not make good on the policies because they had no capital to back them up, the FEDs had to step in with BILLIONS of taxpayer dollars to keep it afloat.

The more I delve into this chaos, the more pissed off I get thinking that the men and women that got us into this were supposed to be smart, knowledgeable professionals who let greed and the absence of regulation, take over their actions. Some are starting to ask, where was their sense of responsibility, sense of fairness, sense of proper business practices but all indications are that these people went berserk like children in a candy shop.

For right now either regulate the living shit out of the practice or ban it altogether by making it illegal. The “swap” policies are nothing but betting or gambling by supposed “investors” and these people are nothing of the sort; they are gamblers exploiting the lack of oversight by our government and financial system.

People need to pay for this debacle and not rewarded by bailing their asses out.

REFORM OUR FINANCIAL SYSTEM #2

How about the logic behind the SEC (Securities & Exchange Commission) that is supposed to police Wall Street.

Many of the big shots at the SEC leave early for million dollar jobs on Wall Street. Does that sound a little stupid to you?

Let me say the stupidity aloud; will a person that is counting on getting a big job on Wall Street do anything while at the SEC to jeopardize that possibility? There you go.

My suggestion, pay the individual at the SEC a goodly salary and forbid that individual from holding a job after the SEC job for at least 15 years and enforce that rule with some real punishment like jail time and huge fine.

I know I am not a finance guy but I do know that the term “bank” has been diluted to the point that anyone can call themselves a bank without assuming all the stringent regulations associated with real banks.

I think we need to clean this up and re-introduce strict “capital” requirements on banks in “real” dollars and not the unrealistically rated and valued securities that the banks hold.

Yes, I want to go back to the old days where banks were serious institutions that conducted business following strict rules. Banking should be different from investing and investment banks should not be called banks but investment houses or institutions.

Your money should not be at risk in a well regulated bank. Your money should be at a realistically rated risk position in investment accounts. I was raised in a very fiscally conservative household and I raised my children that way (well maybe not as conservative as my parents were) but still fiscally RESPONSIBLE.

Lets get back to those days and regain control…

REFORM OUR FINANCIAL SYSTEM NOW #1

Just talking about the economy is not going to do us much good; we need to learn how we got into this mess or better yet, who got us into this mess, why and what we need to do to make sure this NEVER happens again.

This is not deciding what we can do to bring our economy out of the free fall it is in right now but to correct or eliminate all the factors that contributed to the unraveling of our economy.

I will admit that I never paid attention to every detail of how our financial system operated; things were going very well so I didn’t feel a need to look into the inner workings of our system. Yes, I trusted our government to keep watch for me and I assumed there were enough regulations and regulators to prevent anything really bad from happening – boy, was I wrong!

In retrospect, many system failures were predictable because there was no logic behind them in the first place. Take the ratings agencies Moodys and Standard & Poor. These are the agencies that assign ratings (risk) to bonds and other financial instruments as well as financial firms and the risk rating of the finances of corporate (companies) or public (cities) entities.

You would assume that what we call “toxic securities” would have had “bad” ratings to begin with because the rating agencies are supposed to examine securities thoroughly before assigning a risk rating. Many security buyers / investors relied on a good rating before they take a chance on buying a specific security or investing in a specific company or company bond.

Well most of the failed securities and failed companies were given excellent ratings (AAA) by the rating agencies.

Do you know how these rating agencies get paid? Well, they are paid by the “issuers” of the bonds or securities. If you don’t give me a good rating so I can sell a zillion of these toxic bonds, I will never pay you to rate any of the securities that I issue or I will go to the other agency. Get my drift?

I don’t understand why people that relied on bond “ratings” to make their purchase decisions are not suing the living shit out of these companies. I don’t understand why our legal system is not prosecuting these rich idiots for some crime or another; they had to have broken some laws? These companies are still operating as if nothing has happened – why?

Excuse my rant but since these agencies are sanctioned by the SEC (Securities and Exchange Commission), they should be unsanctioned and put out of business. In their place, public (government) rating agencies need to be created. These agencies would be funded from contributions of all institutions that use ratings in their financial dealings. The people working at these institutions should be professionals (civil servants) prohibited from working at the institutions they rate for at least 15 years.

Does this make sense? Why was the rating game allowed to degenerate to this totally illogical point? This is the same as accounting agencies that sleeping with the corporations they audit – illogical and dangerous.

I will be emailing Obama’s team with my suggestions and if enough of us do, maybe his team will pay attention and do something about this. It is a Congressional job so we need to talk to our House and Senate people also.

Other ideas to come…