President Obama Gives Good Speeches!

President Obama has become a huge disappointment when it comes to saving the country from itself. We had hopes that he would live up to his promise of Change We Can Believe In. It has morphed into more of the same stuff that Little Boy Bush left behind.

The new book series he is writing has been titled, “I Left It Behind”. Harry Truman entered the Oval Office scared out of his mind. He had a nation to attend to. He rolled up his sleeves and placed a sign on his desk, which read, “The Buck Stops Here!”

After attending the inauguration ceremony in the bitter cold, on January 20, 2009, we all had hope for real honest to goodness change. That day, millions of us felt we did the right thing by voted for this guy. We defended his inexperience, his message, and his call for change, but now I, and many other progressives, am heavily disappointed. I have become so disillusioned that I have coined a new name for President Obama. I am now calling him President Peacock because he has begun to strut his colorful plumy feathers in full display for all to admire and applaud. I could forgive a president who struts his stuff about town, such as when he flew into New York City---Manhattan, where he and his misses attended a show, dinner and the splendor of the city that never sleeps. Good On Ya Barack, but Harry Truman would not have done that until he felt the nation’s suffering citizens were willing to say, ‘You deserve it now, Mr. President. You really busted your butt for all of us!”

We had Little Boy Bush riding the jet plane to Crawford, Texas in order to play in his brush pile, wear his cowboy hat, and his fancy boots driving around the dry, acrid and arid shrub plain where he could talk “Texan” and not look so stupid. A war had emblazoned around him, and the economy had seriously begun to show signs of crumbling, yet he took more time off than any president in his first term. So, really what is there to complain about when Mr. and Mrs. Obama decided to fly, not halfway across the country, but just over the state line? Little Boy Bush logged more Air Force One frequent flyer miles than anyone in history.

So lately, President Peacock has been out-sourcing himself in the Middle East giving great speeches about reconciliation, communication, respect for religious beliefs, tolerance, the strength of the U.S. economy and the resiliency of the American people, as well as the goodness of good people, while doing the work to achieve peace along with extinguishing the threats of terrorism and fanatical extremism. Who can argue with those talking points? Yet, Mr. Peacock, what is the best way to achieve those lofty goals of yours, but for the United States to be an example of those goals, and for the president to correct the greatest economic disaster since the Great Depression, along with dismantling the evils of the Cheney-Bush legacy. Unfortunately, China is laughing at Treasury Secretary Tim Geithner for claiming the U.S. believes in a strong dollar, as President Obama considers Fed Chairman Ben Bernanke as his chief economic regulator. So, President Peacock hires the Wall-Street pyromaniacs to replant the burned out forest, but then, asks the senior fire starter, Ben Bernanke, to guard the matches. These actions by President Peacock show Americans, and the world that he is not Harry Truman, nor Franklin D. Roosevelt during the nation’s most critical, and dangerous times.

Since last year, and on into this current administration the focus has been on rescuing the greedy bankers who stole the economy from everyone else, and various bankruptcies that ensued the nation while sucking out of the treasury $14 trillion, as the real economy was engulfed by an economic firestorm. Beginning in 1999, as the Clinton administration waned furthering the Royal Scam upon the country with the construction of the Future Commodities Modernization Act of 1999, making it illegal to regulate the private investment scam artists and the shadow banking industry located within every major crime syndicate financial bank, which was signed into law by the administration of Little Boy Bush, which allowed for a massive financial heist of America’s middle class wealth concentrating it within the confines of our corrupt Wall Street institutions and then, grabbed by the top executives running those companies. And, of course, there was the shelving of the Glass-Steagall Act, as well, no longer placing a firewall between savings banks and the financial casino-like institutions, such as Merrill Lynch, and Lehman Brothers.

As the Wall Street pyromaniacs began to experience the rapid fire storm sweeping subprime mortgages, 401Ks, foreclosures, unemployment statistics, then on into the prime mortgage market, pension funds, personal portfolios, and more, these banksta gangstas sitting in the executive suites of the biggest financial institutions were still buying their second and third homes, luxury cars, yachts, airplanes, condominiums, collectible art, country club memberships, and stashing their liquid wealth into accounts opened in places like the Cayman Islands, and other tax haven hideaways.

As Pam Martens tells us Sandy Weill, for example, the former CEO and chairman of Citigroup, walked away from his job with $1 billion in ill-gotten gain. What did he actually create at Citi? Did he create a company with sustainability, job security, or tangible products, like shampoo, or dog food? No! He walked away from a burned out company that he set on fire through “creative” gambling securities scams, through the hocus pocus of imaginative and make-believe AAA rating agencies, credit default swaps, and other bogus scams.

And now, because of the erosion of the Glass-Steagall Act, defining the boundaries between banks and financial institutions, the data released from the Federal Deposit
Insurance Corporation (FDIC), on March 31, 2009 revealed “there are 8,246 FDIC insured institutions with total assets of $13.5 Trillion and domestic deposits of $7.5 Trillion. Four institutions, Bank of America Corporation, JPMorgan Chase and Co., Wells Fargo and Co. and Citgroup Inc., four institutions out of 8,246, control 35% of all the insured domestic deposits and 46% of the assets according to the March 31, 2009 figures from the FDIC.”

Ms. Martens went on to report that Chairman Ben Bernanke of the Federal Reserve has not done anything to reduce this massive concentration of wealth into the hands of a very small portion of the population, and the collusion to corral more government funds to stuff in safety deposit boxes and fatten up balance sheets, since the crisis began, but has encouraged this concentration allowing these monopoly banks to absorb their financially wounded competitors at Blue Light Special prices. Such actions create even bigger “too-big-to-fail” behemoths that when found dying in their insolvency holes drowning in stale champagne, will ask Congress twice over for trillions more treasury minted dollars calling out once more that the sky will turn black, and the country will face mortal danger if they are not rescued again.

The Wall-Street taxpayer bail-out amounting to $14 trillion far exceeds the mere $500 billion offered up to Main Street’s real economy. The Wall-Street bail-out is 25 times bigger than the Main Street offering. Now, had this been reversed, we would be seeing a resurgence of new manufacturing jobs sweeping the work force, no doubt, contributing to a Green economy that would be exportable reducing the trade deficit, stimulating consumer spending, stabilizing the housing market, and replenishing the lost retirement dollars. But, President Peacock, and his flock of financial fundies have not moved toward such sensible solutions.

Part of the national bail-out is the U.S. government’s 60% investment in General Motors, which according to Robert Reich, the nation’s 22nd Secretary of Labor and professor at the University of California-Berkley, GM will eventually be no more. The only reason for the $60 billion rescue package is “designed to give the economy time to reduce the social costs of the blow” when its assets eventually get sold off and the company no longer exists. Dr. Reich went on to say that the $60 billion would have been better spent had it been allocated to retrain auto workers, as well as to give them extended unemployment insurance as they become retrained for other jobs.

As we recall, GM was able to retool during the build up to World War II in order to manufacture tanks and other war machines, therefore, why cannot GM retool to manufacture high-speed rail cars for the development of intra-city transportation corridors? Or, electric cars, such as the Aptera. But, President Peacock has stated that we, the investors who now own controlling interest in GM will say nothing about the products this dying automaker will manufacture. It appears that the GM brand name will eventually be sold to China, as has gone the Hummer.

Dr. Reich wrote that GM was once the nation’s number one private employer with strong middle class jobs paying $60 per hour to workers not requiring a college education. Today, Wal-Mart has replaced GM with their $10 per hour jobs. This is part of the new American paradigm shift the nation has been willing to accept over the last 30 years. Sit down, hold on, and shut up seems to be the mantra of Wall-Street to Main Street.

The real economy jobs are disappearing. Credit is not flowing. Borrowing has narrowed. The economy has contracted more than 6% average annual rate in the fourth quarter of 2008, and first quarter of 2009. From December 2007 through April 2009, the economy has burned up 6 million jobs. Dr. Morici has estimated that the economy will likely have lost more than 8 million jobs as the recession wanes.

The editor note on the website layoffdaily.com has calculated that “we would need 48 straight months (4 years) of 350,000 jobs added a month to reach January 2008 employment levels [which had been 4.9% and considered full employment]. Keep in mind that to get there, we need every last one of these rosy projections to happen [create 7 million jobs to get back to 4.9%, adding 137,000 new jobs to keep up with the pace of working-age population growth], plus a sustained job growth rate unseen in our lifetime, plus no worsening or new financial crises, no additional sector collapses, no double dip recession, and no black swans.” Wow! Now that is a tall order for President Peacock!

According to Tyler Durden of zerohedge.blogspot.com, it seems that credit default swaps, those bets that specific stocks will drop in value, continue to be purchased in the billions of dollars every month in nearly every sector. He wrote that the “net notional value change [with JPMorgan] was an almost record $2.1 billion in the name alone (on $52.1 billion in gross) on a ridiculous amount of contracts.” The gambling continues. The real economy suffers. And, Ben Bernanke, Timmy Geithner, President Peacock and Congress sit on the sidelines doing nothing to control such stuff.

Bernanke had spoken about keeping mortgage interest rates down in order to encourage home buying, but he has been buying up mortgage backed securities, and treasury issues that he has been printing up, which has driven up mortgage interest rates, and not dropped them. It just seems Bernanke has been saying one thing to the homebuilders but doing another to sabotage their survival.

There is good reason to be disappointed in President Obama. What he has done is just not good enough. It seems he was promising us more, but it appears we misunderstood those great speeches he gave us. The motto, “Change We Can Believe In” was just part of a darn good speech.

Thanks for reading, Jerry

President Obama’s Economic Recovery Will Continue To Sputter

President Obama’s auto task force has reported that if GM goes into bankruptcy, then the bondholders would need to take a 10% stake in the restructured company in exchange for their $27B they hold in GM corporate bonds. The re-emerged downsized GM could acquire another $40 billion in loans, which would be in addition to the already nearly $20 billion they have already received. It appears that the bondholders have been squawking over their deal. I say, too bad. Suck it up or loose it! Where is their “shared sacrifice?” as President Obama has demanded from the workers, and all those peripherally connected to the auto industry? Didn’t anyone tell the bondholders that investment is a risk and not a guarantee; and, that this is a bankruptcy unraveling? The UAW health care group will receive 17.5% ownership stake in exchange for the $20B owed them by GM. The U.S government will take a 60% stake in the company, while Canada will own a 12% piece of the pie.

And then there is the bankruptcy of Visteon Corporation, and Metaldyne Corporation both of which supply parts and chassis respectively for Ford Motor Company.

Automaker sales have plunged 37% this year through April, according to Bloomberg News.

The auto task force wants to see the newly-government owned GM company manufacture future cars in China. This sounds like more of the same strategy of outsourcing American jobs. Ship good paying manufacturing jobs overseas where they can be made cheaply, adding to our trade deficit, unemployment problems, further erosion of wages, and a diminished domestic tax base. This is more of the failed Reaganomics-style policies that failed the nation in the past. Haven’t Democrats woken up yet? Oh, I forgot, many are a part of this problem. Aren’t they?

Robert Reich pointed out in “What Industrial Policy Should Be”, 5-19-09, “So tucked into the latest version of climate legislation unveiled this week by the House Energy and Commerce Committee is a provision that doubles to $50 billion loans to help auto makers comply [to fuel economy targets].” Will such research and development, as well as design and manufacturing be done domestically? Or, will that be outsourced, too?

Ralph Nader and Robert Weissman wrote a letter addressed to both Senators Dodd, and Frank strongly suggesting that the Congress exercise their oversight powers regarding Obama’s consideration of bankruptcy for Chrysler and GM, “or other irreversible moves until after the task force plan has been subjected to close and careful review via thorough Congressional hearings.” It does not appear that such considerations will be honored. Just get rid of middle class jobs altogether appears to be the mantra of the nation’s elite. The richest 400 Americans, who have a net worth of $1.7 trillion, based on 2008 figures, which is around 10% of our GDP, want the welfare state kept in place just for themselves. Remember, they got this rich based on shoddy regulation of the financial industry, and the government’s allowance of over-leveraged mortgage-backed securities, as well as the credit default swap scam that kept the high roller financial bankstas, who had been betting against gains, even richer.

According to Les Leopold, in his piece “Fear and Looting in America…” in 1982, the top 400 of America’s richest, their net worth was $604 million; but, by 2008, this net worth had grown to $1.56 trillion!

It seems that the White House has grown so far removed from the collapse of the economy that there won’t be a recovery strong enough to buy even cheap foreign-made GM cars. What we have heard from the media bobbleheads is how the economy has picked up in May. “Hurray! Has a recovery begun? Will consumers continue to spend money they cannot afford to part with? Let us sure hope so! They better stop saving 4% of their incomes and go back to a zero savings rate. Maybe they will start borrowing again, too.”

Bomlat.blogspot.com wrote that “Personal savings as a percentage of personal income was 5.7% in April, compared with 4.5% in March.” Americans are now getting it. They better save more and spend less.

The bobbleheaded media pundits cannot see the forest through the trees. What happened in May? Well, there were graduations: college and high school. People bought gifts for the graduates. They traveled to college communities to attend these events. They ate in restaurants and bars. High schoolers bought prom dresses, and accessories. College graduates went to department stores and purchased, probably on credit, a few outfits for their interviews. There may even have been a few house parties. OH NO. WE CANNOT HAVE THAT NOW!

I believe such spending can boost the economy a few percentage points. The AP news service reported that the Consumer Confidence Index rose from 40.8 to 54.9. Macy’s Inc., Apple, and Best Buy Co. saw an increase in sales. Such data makes temporary sense. Families may actually spend money they don’t have on short, and local vacations in the coming weeks. Watch credit card debt increase over the next few months. Has anyone noticed creeping gas prices?

Wages have remained stagnant for many. Foreclosures seem not to be taking a rest during this rise in consumer spending. The private economy continues to shrink shedding jobs at a pace of more than 600,000 a month over the last half-year. Where will all these new college graduates find jobs? Will they earn enough to pay down their student loan debts or will they declare bankruptcy? If some are lucky, they will find work in the public sector getting experience from jobs funded through the U.S. government stimulus package. The private sector surely will not be expanding anytime soon in order to bring on new employees. Households have seen their net worth fall down the well at a cost of $13 trillion.

Also found on Bomlat’s blog, “Real gross domestic product-the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 5.7% in the first quarter of 2009…estimates released by the Bureau of Economic Analysis.” We have seen GDP over the last 2 quarter fluctuate between 5.7— 6.3%. Other economists have stated that our real GDP is actually in negative to zero ranges.

Bomlat also reported that “intermodal volume of trailers or containers was off 19.1% from last year, with container volume down 14.2% and trailer traffic off 37.2%.” This data is not very reassuring that a recover is soon at hand. Can someone call Ben Bernanke and tell him so?

The stock market knows that it has no legs. That game is only for those who can jump in and jump out. It has its own rules separate from reality. It has no long term sustainability.

Fed Chairman Ben Bernanke will be finding $1.7 trillion worth of treasuries coming due. He is printing up $1.75 more treasuries to pay for additional deficit spending. Who is going to buy these bonds? It will be the Fed themselves, more than likely. Will there be a point when foreign central banks and currency buyers stop believing in the continued erosion of the US dollar through debt expansion? Will the price of these bonds be driven down, while interest rates move upward? Will this build a wall in the path of home mortgage lenders and new house builders? Both Bernanke and Geithner already know that business-fixed investment, and non-residential fixed investment, which makes up most of all business investment, is collapsing at an annual rate of 40%. Does this sound like the private sector will be growing? The Bernanke fantasy that our national recovery will realize a 3% growth rate next year, 4% in 2011, and 4.6% in 2012 is just gobbligook. Currently, our GDP is basically negative. He drinks too much Psycho Kool-Aid at lunch.

Economist Niall Ferguson has stated that our 2009 deficit will move above 12% of GDP. He also stated that the Fed will likely be buying $300 billion worth of treasuries this year, but they will probably find themselves having to open up their balance sheet to buy more than that. Economist Paul Krugman claims that the US is currently in debt about 60% of GDP. Will the rest of the world back away from financing our growing debt by purchasing virtually zero percent interest bonds? The U.S is basically producing nothing of tangible value to export in order to bring down the deficits.

China is very happy to see all of our manufacturing going over to their side, so we can keep buying their cheap stuff. But at some point, most Americans will not have any money to keep that going. And, if our debt exceeds our GDP, we no longer are a viable economy. Our currency could become worthless through hyperinflation. If we ship our auto industry overseas, then many jobs, which would be interconnect to it, would disappear, too.

The economist Peter Morici recently wrote that “unless the economists are wrong, this key forward looking indicator of economic health [Durable goods orders in March were down 0.8% and the consensus forecast calls for another 0.3% drop.] would likely indicate that the recession has some to time to run. Until consumers have the confidence to purchase big ticket items and businesses put cash into new technology, the economic recovery is not at hand.”

Michael Whitney stated it beautifully. “The current downturn is not really a recession at all; it’s more like a self-inflicted wound perpetrated by avaricious speculators who put a gun to the economy’s head and blew its brains out. The banks and Wall Street have created a capital hole so vast that the entire economy is being sucked into the abyss. And it all could have been avoided. Credit production is too important and too lethal to entrust it to profit-driven vipers whose only motivation is self-enrichment. The whole system needs rethinking and public input before Bernanke wastes trillions more trying to revive the same crisis-prone business model. If “credit is the economy’s life’s blood”, as Obama says, then it should be distributed through a government-controlled public utility. The real lesson of the financial crisis is that privatizing credit has been a disaster.” (The Real Lesson of the Financial Crisis, Counterpunch.org, 5-19-09).

Thanks for reading, Jerry

President Obama Uses A Watering Can Instead Of A Fire Hose

George W. Bush liked to play with matches. He was the one president who started and maintained fires all throughout his play dates in the White House. His first fire was to ignore the threat of terrorists planning to fly planes into a major American city. He let a smaller fire grow into a raging fire by pouring gasoline onto what eventually turned into the biggest economic firestorm ever to sweep the nation. He started a horrible fire in Iraq, and then in Afghanistan. He set fire to the Veteran’s Administration, soldier physical and mental health care. He set a nice fire upon American jobs and wages and retirement savings. He gathered brush and let a health care fire burn to a point where 40 million Americans could not get treated for the burns they received from the heat. He decided to take a match to public education by not providing enough funding for his No Child Left Behind fire. He started a huge torture fire. He loved to throw huge piles of money on his debt crisis fires. He threw a firebomb onto civil liberties, American and real free market principles. He gave a fire trench of escape to the banking fraudsters. He threw fire propellants all over the environment, as well. It has become very clear to many, or most, Americans that Little Boy Bush was a pyromaniac.

Now Barack Obama has stepped into these multiple fires of his presidency with a watering can in hand. During his bid for the presidency, he filled arenas all around the country with his message of change—the change that we can all believe in. And, a “Yes We Can”, ‘we must put these fires out’, ‘together we can clear the debris’, or ‘rebuild from the rubble’ message, which has left us waiting for something more than a good speech. A ‘Phoenix Rising’ message with teeth is what was expected. This was not the message from his opponent representing Phoenix, Arizona. The voters called out for a Phoenix-rising-from-the-ashes-of-a-nation-left-to-burn message to be put into play on day one. We are still waiting.

A voting majority was listening intently, with hope in their hearts, since he talked of it everywhere he stopped to speak. His Phoenix Rising message had saturated the Democratic and hopeful Republican psyche. We were expecting it, for crying out loud! He went from swooning a ground swell of loyal stadium-sized supporters, to a rising bunch of folks wondering what the heck happened.

Of course, there were many who were not paying attention. Those who were not listening thought Barack Obama was a Muslim. They instead listened to the Right wing messengers, such as Limbaugh, and O’Reilly. Many of these same people did not know which state of the union KFC—the fried chicken franchise—first came from; or could name a country that began with the letter “U” (such as the United States); or, what is the religion of Israel (the answer is not Israeli); or, what religion are Buddhists; or, who won the Vietnam War (and yes, the U.S. was in that war.); or, who is Fidel Castro; or, how many sides does a triangle have (the answer is not NONE or ONE!); or, what is the currency used in the United Kingdom (the answer is not “the Queen Elizabeth’s money”); or, what country in the Middle East should be invaded next (the answer should not be Italy, France, Brazil, Korea); or, place a marker on the world map showing Iran (placing it on Australia is wrong); or, who is Tony Blair (the answer should not be “I don’t even know”, “Linda Blair’s brother”, or “an actor”); or, what is a mosque (the answer should not be “I don’t have any idea”, nor “an animal”); or, how many kidneys does a person have (the answer should not be one); or, what is collateral damage (the answer should not be “they just made a movie about it, and it must be something to do with what the movie is about”), or; how many world wars have there been (the answer should not be three); or, Star Wars is based on a true story: true or false (the answer should not have been answered “true”); or, what is Hiroshima and Nagasaki famous for (the answer should be Judo-wrestling); or, how many Eiffel towers are there in Paris (the answer should not be “about 10); or, what is Al-Qaeda (the answer should not have been “a suicide group in Israel and the president of it is Yasser Arafat. Everybody knows that.” Or, “a wing of the Masonic Order.”); or, where was the Berlin Wall (the answer should not have been “Believe me. I don’t know the answer to this question, but I am thinking. Israel?”). I cannot make such answers up. These were real people, on a city street in America, giving such answers to a person with a video camera and microphone for all to see on Youtube. They were young, middle aged, and old. This is the intellect of a significant population of this country. Maybe 90 million. Many of these Americans are functionally illiterate, yet able to get by everyday. They are able to work, pay bills, shop for groceries, buy beers, watch Fox News, listen to Limbaugh on their car or personal pocket radios. Some might call them marginalized individuals working for minimum wage, receiving government assistance, and living from check to check.

Such Americans may not know, or understand, what President Obama is trying to do with his “watering can”. But, there are millions of Americans who fully well know that to use a “water can” on dozens of raging fires will have little difference; and, when he eventually realizes that what he needs is an experienced team of firefighters, not afraid of putting on the protective gear and battling the fires and pyromaniacs with the utmost of professional understanding that fire hoses are required and not his useless “watering cans”, it maybe too late. By then, he could easily be dealing with a “Scorched Earth epidemic instead of just major fire damage.

Such a viewpoint can be very defeating. Many Americans had put their hopes in this man who they worked hard to get elected President of the United States--the most important position on Earth. Yet, when he pranced out the likes of Timmy Geithner, and Larry Summers, to just name two people who were fully engaged in the firestorm that Little Boy Bush had emblazoned, all we could do was place our heads in our cupped hands and cry. This president has let millions upon millions of hard working Americans burn badly through foreclosures, bankruptcies, disappearing retirement savings, stagnant wages, vanishing jobs, and more, while the fire starters and pyromaniacs continue to make critical decisions that affect all of us.

The “Shared Sacrifice Bitter Pill” that President Obama demands working Americans to swallow without complaint, has been discarded by the very financial corporate thieves and CEOs, as well as government officials who should, instead, be making the greatest “shared sacrifice” for all. Unfortunately, this is not Barack Obama’s agenda. His agenda is for Americans to suspend belief and support his illusion act which takes taxpayer’s wealth, hands it over to the largest financial banking entities when their own net worth just prior to the bailout panic attack was far less than what had been given to them by the U.S. government and the Federal Reserve pretending that they were made solvent by their own accounting magic when in reality they were actually owned by the U.S. government and taxpayers. This is what is called crony capitalism. President Obama has elaborated on the Bush version of crony capitalism, which has now been made bigger and more corrupt. ‘My crony capitalism is bigger than your crony capitalism!’

Any Credit Card Bill of Rights will not be in place until 2010 allowing the credit card companies to launch their final assault upon the working American. There will be no investigation championed by this president to peel away the layers of lies and war crimes committed by the last administration. There will be no hurried round-up of corporate tax dodgers stuffing their wealth in undisclosed and protected off-shore bank accounts located in “Tax Haven” countries. There is no earth-shaking outcry or heated body-checking against the army of lobbyists hired to take down any government created health care plan endorsed by this president, let alone the American people. There has been little lecturing of the Democratic Party congressional leadership to act tough on behalf of working Americans. Now, this president speaks in support of Little Boy Bush’s complaint that Valerie Plame and Joseph Wilson should not take their lawsuit against the government to a higher court in order to seek justice against the wrongdoing that was done to them by the Boy Bush administration.

All of this has been done in less than 200 days as president. The track record does not look good. The Change That We Can Believe In has been diluted down by his flimsy watering can to read The Occasional Sorta Change That We Might Be Able To Try And Believe In.

Barack Obama was given a huge mess by the outgoing regressive administration. I will grant him that. He has been trying to repair the damage done, and put out the raging fires, which are overwhelming in scope, but it cannot be done with a dime store watering can.

"Laws alone can not secure freedom of expression; in order that every man present his views without penalty there must be spirit of tolerance in the entire population." Albert Einstein.

thanks for reading, jerry

Congress Fails To Help Working Americans Hold On To Their Homes

If you think Ben Bernanke or Tim Geithner really believes that the recession is coming to a close, think again. These two shills for the Wall Street financial crime syndicate, and mouthpieces for the economic recovery plan designed by President Obama are just performing their clumsy magic act. We are very far from a bottom in the market, or an economic recovery, for that matter. They know what is going on in every market, in every country, and with every central bank. It is clear, just from doing a fraction of the research their teams engage in all day long that the world economy is slowing down day by day, and will continue to do so for a long time into the future. More and more Americans are falling into hard times, and unless help is on the way, there will be long lines at unemployment offices, food banks, welfare services, and legal aid offices all around the country. The nation’s commerce will not be able to sustain itself on the shrinking number of solvent and employed workers. As the nation’s tax base shrinks, those solvent and working Americans will pull back on their own spending in order to have a larger personal cash reserve. Unfortunately, our federal government has not woken up to this grim fact. They continue to wait for a new bubble to inflate the economy in some magical way. And as the world’s commerce shrinks, as we are witnessing today, there will be fewer goods and services bought and sold.

Let me share what I have read from a terrific site called Bomlat .

“Total cargo volume at the [India] 12 gateway ports dropped to 45 million tons, from 46 million tons in the same month the previous fiscal year.”

“Consumer prices fell, [in China] 1.5 percent in the year to April, marking the third consecutive month of deflation after a 1.2 percent fall in the 12 months to March, the National Bureau of Statistics said on Monday.” Bomlat says from graph charts he posted on his site that manufacturing production is suffering. Inflation is low; therefore no one wants to purchase treasuries when there are virtually no interest returns paid. He went on to say that inflation is negative, and the Chinese leadership is freaked out because all of this is happening during a time when they have committed to monetary expansion. After the injection of China’s central bank capital into their economic expansion, it may all just deflate. It is something like if air was being blown into a balloon representing expansion capital, and the balloon got really big, but then suddenly, China let go of the balloon, and let it loose to blast about, the balloon would no longer be filled with capital. All the capitalized-air would empty out of the balloon. The Chinese economic stimulus would fizzle, and inflation would begin to become realized.

Bomlat went on to discuss Volvo truck sales and how their sales have dropped 50-60% and production dropped 70-80%. He wrote that because many manufacturers around the world were producing product in 2007, and now, they are stuck with inventory that is hard to sell, it might take several months, or longer, to begin to reduce that excessive inventory to a point where production can resume, once again. But, in the meantime, workers are getting laid off, their spending is shrinking, and their budgets become fragile.

Here are a couple facts from the American Railroad data regarding tonnage miles for May 9, 2009: down 25.2%. Railway loads of vehicles and equipment were down 49.5%.

Bomlat went on to write about U.S. deflation. “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% in April before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported.” “This index has fallen 0.7% over the last 12 months due primarily to a 25.2% drop in energy prices. The year-over-year declines in March and April are the first since 1955.” Bomlat said, and I paraphrase, we have to point to housing, which became 1% more expensive during the last 12 months. I [Bomlat] think we can see the problems with this inflation calculation methodology because we have experienced, around the world, a big fall in housing prices, as well as a fall in rental prices, but they are trying to convince us that there has been an increase in the cost of housing/shelter.

On the Bomlat site, there was a CNN Money article that said “February’s retail imports, such as clothes, shoes, and home furnishings dropped to the lowest level in seven years.” Bomlat wrote the following, “expect [a] continued [drop in] business for global supply chain providers well into 2010. Ocean, air, TL, LTL, brokers, freight forwarders, distribution center operators, as well as air and ocean ports all need sustained retail volume. Retail business is a critical component [for a] supply chain industry turn-around.”

Bomlat posted a Reuters report which read, “China’s steelmakers are facing low demand and potentially disastrous oversupply, supporting their insistence on a 40% cut in benchmark iron ore prices. China’s steel industry, the world’s biggest, traditionally set a global benchmark…” Mr. Shan Shanghua, secretary general of the China Iron and Steel Association said…this year [there is] too much supply and too little demand.” The secretary general went on to say, “I have not seen any fundamentals to support a sustainable steel price recovery. Major steel mills have cut their production of steel coil remarkably in China and steel mills have already seen their exports falling sharply.”

Bomlat wrote about April’s new big truck orders and how they are down and projected to remain depressed. “North American new truck orders for April ’09 are quoted by FTR to be 7,935—down 9% from March and down 57% from April ’08.” This follows January numbers of a bit over 10,000 units, and February was at 6,200 units, while March was around 8,600 units. He projects that the truck industry will show recovery in 2010.

Then he wrote about furniture imports taking a hit, too. He wrote that furniture imports have been down by 50% from a year ago, due to weak US demand. This decline affects the trucking industry, too.

The biggest shock came from his reporting on the US container import business, which dropped by 15% year-over-year. “Import cargo at the nation’s major retail container ports fell 15% in March, compared to year-earlier numbers.”

It was written in a Journal of Commerce article written by Thomas Gallagher, March 6, 2009, that “retail container traffic at the nation’s ports sank 14.6% in January….This year’s numbers are going to remain well below last year because sales are still slow and most economists aren’t seeing a recovery before the second half of the year at the earliest..”

Bomlat posts all types of American and Chinese commerce figures daily. His data shows that the economy’s of China, and the U.S. are slowing and will likely remain slow. All sectors of industry, of which he reports on, shipping, rail, auto manufacturing, heavy industry, industrial metals, energy, furniture, etc. are demonstrating declining sales, over-capacity in inventory, and reduced consumer spending, as a whole. At the bottom of the post will be a shocking Youtube of thousands upon thousands of empty cargo containers stacked up on idle ports.

General Motors will likely cut 47,000 jobs worldwide this year, and dealership numbers will shrink, too. We will probably find 2600 fewer GM dealers in America reducing their network by a third. What will that do to inventory? Where will all those unsold cars and trucks end up? Will further layoffs occur due to excessive inventory?

The financial sector will end up shrinking their ranks, as well. And, there are now fewer newspapers. Fewer jobs lead to lower wages, less consuming, and a drop in skilled labor jobs. As was seen in the 1981 to 1982 recession, unemployment climbed almost reached 11% with a loss of 3 million jobs. This recession is worse than that. This is worldwide. This recession has leaked into all sectors, especially housing and the ability to hold onto one’s retirement investments. One-third of all mortgages are underwater!!!! That is very scary.

According to the research done by the Columbia University economist Till von Wachter, the economist Jae Song of the Social Security Administration, and another economist Joyce Manchester of the Congressional Budget Office wrote that a typical 40-year old man who found himself unemployed during the 1981-82 recession went on to suffer a 20% loss in lifetime earnings. “People losing their jobs now in permanently downsized industries have to be aware that they’re particularly at risk of pretty large losses” to lifetime wages, says von Wachter, who briefed staff at the Fed and the European Central Bank last month of the effects of mass layoffs. (“Great Recession Will Redefine Full Employment as Jobs Vanish”, Matthew Benjamin and Rich Miller; Bloomberg 5-4-09. Bernanke and Geithner are not being honest with the American people.

President Obama when speaking about the fall of Chrysler Corporation emphasized the “shared sacrifice” that has to be made by the UAW in order to guarantee that the automaker can emerge from bankruptcy stronger, more competitive and viable as it joins forces with Fiat Corporation. What is the president talking about? Firstly, there is no guarantee that the new Chrysler will emerge successfully as he has suggested. Secondly, what is the “shared sacrifice” the Wall Street financial banking industry has had to make? They have made none! They have gotten all of the government bail-out money they wanted at zero percent interest, and with no sacrifice, such as new regulatory rules, new chief operational officers, limitations on their pay, and indictments from short selling their competitor's stock, or even betting against their own demise. The Wall Street financial crime syndicate even strong-armed 12 Democratic Senators to vote against the 'Shared Sacrificial' American people who would have benefited from a law allowing judges to assist desperate homeowners to write down (cram-down) the principal of their mortgage loans in hopes that they might be able to hang on to them instead of losing them.

No “shared sacrifice” allowed for the Wall Street banksters who were responsible for the economic collapse. The way this banking crime syndicate thinks is that property, mortgage property, remains to be their most treasured collateral which they hope will save their toxic “legacy” debt teetering on the brink of further devaluation. As the bank’s collateral falls in value, their debts rise bringing them closer to insolvency. President Obama, regressive Republicans, and the 12 key Democrats who voted against Senator Durbin’s “Helping Families Save Their Homes In Bankruptcy” amendment, obviously felt that further rescue of the banks took priority over any legislation that would benefit the suffering working American.

What they seem to have NOT realized is that they voted for more foreclosures, more bankruptcies, and ultimately, more bank failures. This amendment would have placed a bottom on collapsing home prices, which would have considerably slowed mortgage defaults. Instead of administering simple rescue breaths and chest compressions to the failing heart of the economic crisis, they decided to just kill the patient.

A mountain range of shipping containers


thanks for reading, jerry

America's Stormy Weather

The future of America will never look like the past. What America is going through now will give us a peak into the future. The past life will be referred to as the “Good Old Days”. “You remember when…”, will be barstool talk. The average American spending money on $2000 or more week long family vacations to child-friendly locations will only be experienced by only a fraction of those who can afford them. The others will only be able to share such memories from their dog-eared pages of the bygone family vacation scrapbook.

A new American paradigm is rapidly evolving. It is just as I have been describing it in my past postings. I am not the only one writing about it, but, unfortunately, many are not planning for it. My neighbor, at the age of 65, has been told by his wife that she wants to put an addition on their house, even though she has saved very little for her retirement. In a year or so, it will be only the two of them in their comfortable home. So why a new addition only after fully gutting the entire home around 10 years ago and a new double car garage just 5 years ago? The reason is his wife cannot change her consumerism ways of thinking.
The new question America will be facing in only a few months will be this--- what will be the new un/under-employment equilibrium level for the nation? I, as others, feel before we find that spot the percentage will reach, at least, 20% nationwide. Michigan and California are nearly there now!

Americans trained in auto assembly, or retail, or construction work, or finance and business are finding themselves asking the federal government for relief in the form of unemployment compensation.

The stock market’s casino winnings are separate from the “real” economy. Those winnings, or losses, are only for those who can afford them. More and more Americans no longer can take the risk with their evaporating incomes. The only risky decision they might make could be either to take the family out for dinner two nights in a given week, or, instead, to just leave it at one.

Americans are feeling the pinch. As more people are finding themselves in need of support from their Uncle Sam in Washington, they could be faced with tough decisions, such as to take that lesser paying job, now, instead of waiting and hoping for that dream job to come along tomorrow; or, to take that part-time job, instead of waiting for a full-time job to drop in their lap. They know they have to save more money, and spend less. Americans realize that they need to increase their savings and pay down debts. This is now where their consumer dollars are being channeled. This is the new economy.
This negatively impacts the GDP of the nation. Less consuming means fewer customers. Fewer customers lead to retail, service, and manufacturing job cuts, wage and benefit reductions, and the trimming of weekly work hours. This all leads to decreased industrial production and capacity. Bankruptcies and foreclosures follow. There will likely be 8 million foreclosures during this 2009 year.

As Americans watch their families and friends and co-workers suffering, they also angrily observe those inside Wall Street demand from the U.S. government, and with Obama’s Blessing, the blatant transfer of the nation’s wealth right into the Banksta’s balance sheets. The more assistance the top tier financial Wall Street banks need and want from the Treasury and Federal Reserve, they get. The Stress Test was really the Scam Test.

Since 2007, we have watched billions and trillions of dollars pledged, promised and issued to the Bankstas. They are so full of liquidity they continue to plan to issue more bonuses and fatter expense account spending limits. But, the truth is there still remains $3.2 trillion in non-performing mortgage loans sitting on their books, being ignored, ready to tear open their balance sheets. The coming foreclosures will blow down their house of card banking façades. Timmy Geithner will be left holding the empty Private-Public Investment Program Goodie Bag. President Obama will have trashed the nation’s balance sheet when he begins to wipe the Banksta’s Swine Flu Flux from his face and proclaims it is time to nationalize the banks and take them into receivership. I sure hope the Bankstas have not transferred the government’s gifts into off-shore accounts.

The nation’s Treasury has a zero balance sheet. There is now a diminishing revenue stream, as TimmyG and Bernie-Nakie promise $11 trillion to the financial economic recovery plan. The nation has now realized that there are fewer products being purchased, therefore fewer sales receipts coming in. There are fewer capital gains, and payroll taxes finding there way into the Treasury, as well as state and local governments. Our GDP is shrinking. And China is now waking up to the fact that they cannot continue to buy zero interest Treasury bonds.

China might actually find themselves in the same economic predicament the United States is now in. China was able to expand as a result of Americans buying cheap stuff from them. As a result of trillions of US dollars entering their central bank, a massive economic surplus was formed. That surplus brought wealth to the Chinese middle class. Jobs were created, buildings were constructed, condominiums sprouted up, and factories were built. Services came along with this growth. But now, this boom is slowing. Jobs by the tens of millions are disappearing. Unemployment is rising. The wealth boom is coming to an end. The cities are filled with major land development projects that might not be completed, but the Chinese central bank has made a commitment to further fueling development.

Who will buy their manufactured over-capacity? The U.S. consumer is dried up, even at deflated prices. The Chinese may actually end up with a huge over-capacity, and a slowing GDP because of it. The Chinese might find their middle class unable to keep up with over-inflated housing prices, therefore, going into foreclosure, and bankruptcy. Credit card users might go into default. The Central Chinese government might find that their massive central banking injections into their development expansion was a bad idea. 20-30 million, and growing, Chinese finding themselves unemployed and in need of food, medicine, housing and health care could easily overwhelm the nation and shift them into crisis-mode.

As the world’s economic engines grinds to a halt, President Obama, confused and bewildered, and realizing that the citizens of this nation have seen their wages eroded while the bankstas are doing pretty nicely-thank you very much!—have stolen the country’s treasure. And then, there are the two wars draining the budget, as well. Two wars with little to show for all the blood and cost invested in them.

President Obama knows what he is doing. He knows he is shifting wealth away from the “real” economy into a “non-functioning” fictional economy. Geithner is just a zombie himself. He was taken over by Goldman Sachs vampires a long time ago. To believe that by stuffing the banker’s pockets now, and that come December or next July or November the economy will percolate up and the beaten down American will begin to spend and spend further, re-inflating the dead housing market, or auto industry, or entertainment industry, instead of trying to replenish their deflated retirement nest-egg stolen from them, must have been waterboarded too many times. It just won’t happen!!

To answer my question of what will be the new equilibrium level of un/underemployment that will be part of this New American Paradigm, I might answer by saying how about 10%? Where will the money come from to rebuild a nation’s industry and work force that had been shipped overseas and outsourced? A new American paradigm is heading our way, and it looks more like stormy weather than a sunny day.

thanks for reading, jerry