Blago's Revenge

Apparently, the cagey disgraced Governor, Rod Blagojevich, has decided to put the political systems in Illinois and in Washington D.C. between a rock and a hard place.

He knows that appointing a replacement for Barack Obama's U.S. Senate seat is his exclusive right under the Constitution of Illinois. Further, the U.S. Senate, under our Constitution, has no right to block the seating of any Senator (or Congressman) from any State. It is part of the State's rights to send whoever they want, under their respective Constitutions, to act as their Representatives in Congress. Of course, once a Senator is seated, the U.S. Senate has the right to unseat any Senator for corruption and ethics violations.

To top all that off, Blago appointed a black man, Roland Burris. This makes things even stickier than if he had appointed a white. Now, any attempts to block the seating of Roland Burris can be viewed as having anti-racial overtones. The not-so-eminent and the former founder of the Black Panthers in Illinois and an Illinois Congressman, Bobby Rush, made that perfectly clear in one of the worst speeches (or lack there of) that I have ever heard. Rush's only justification of having Roland Burris in the Senate is because he is black and has a clean record and, without Obama, no other black person exists in the Senate. Further, he used the word "lynch" as to imply that not seating Burris would be a racial thing (See Video). If their is one word that get black's ire up, it is that codeword of "lynch" or lynching.

I have to hand it to Blago. Singlehandedly, he has managed to somewhat tarnish the incoming President; expose the corruption of Illinois politics to the broader United States; and tie both Illinois and Washington D.C. into knots trying to turn this gigantic lemon into even a thimble full of lemonade. Nice job!

One For All and All For One

Forget Michael Phelps and his eight gold's in this year's Olympics. Forget about all the other "firsts" this year like the first Black President of the United States or first woman to run for a Republican V.P. slot. Instead, think of a previously near untoppable "first" that has been achieved this year by an Eagle Scout for his New York area Scouts. Scout Shawn Goldsmith became one of few Boy Scouts in the 100-year history of that organization to garner all 121 merit badges.

Thinking back to my old Boy Scout days, I think (if had put my mind to it) I could have broken that record if the "Scouts" had only let me stay active until, say, age 45. But, that is all water under the bridge. Anyway, this college freshman did it within the 18-year old age limit (See Associate Press Story).

Visit his Scout Council's Website and see their story about Shawn: (See Full Story)

War Is All Around Us

Besides a failing economy, the incoming Obama administration has one thing they can count on: that's War. And, most importantly, there is the possibility of war in almost every corner of the world.

There is no doubt that the wars in Iraq and Afghanistan aren't going to be wrapped up anytime soon. Then, this weekend's pounding of Hamas and the residents of the Gaza Strip by the Israelis just proves to reinforce the fragility of peace in the Middle East. But, that's not hardly where all the tensions stop.

Just Prior to Christmas, additional Pakistani troops were moved to their adjacent border with India in a new and more ominous troop build up between these two nuclear powers (See Full Story). The U.S. is caught in the middle on this one because both are our allies. But, the consequences of a war involving Pakistan and anyone else can seriously hurt our efforts in our war on terror.

Much closer to home, and rarely ever talked about, are the tensions between Columbia and Venezuela and Ecuador and Columbia (Venezuela's close political friend). My guess is that we could see war in this area within a year's time (See Full Story). Hugo Chavez, the President of Venezuela, may just want to use a war with Columbia as a means to bolster his sagging popularity. The real question is whether the U.S. will intervene and assist Columbia as our ally and as a means of keeping Chavez from expanding his scope of power.

Then, there's the biggest tinderbox of all. That's the situation between Iran and Israel; with Iran obtaining and possibly using nuclear weapons against Israel. While no war exists now, this situation could be the biggest test for the Obama administration with Israel poised to stop Iran before they can complete their fulfillment of having nuclear weapons. While President of Iran, Mr. Ahmadinejad (that's All*mad*and*jihad), claims that his nuclear program is only for peaceful energy, the whole world knows differently. Mr. Obama claims he can put this situation to bed by simply talking to Ahmadinejad; something he feels that Bush has been neglectful in doing. However, that is a political lie on the part of Obama. For at least three years, key members of Europe (France, England, and Germany) have been holding talks with Iran; and, in 2006, the United States offered to have direct talks if Iran would suspend it's uranium enrichment activities while the talks are ongoing (See Full Story). Of course, Mr. Obama would talk without any preconditions. Sort of like Nero: "fiddling while Rome burns"!

I personally think that Obama might find himself a little over his head on foreign affairs. He's got most of the Clinton people on his team that failed to get an accord between Israel and Palestine while Bill Clinton was in office. His Secretary of State, Hillary Clinton, hasn't got a history of being the diplomat. Just look back at her miserable failure in getting support for a Federal health care system at the beginning of Bill Clinton's first term. That was a domestic diplomatic disaster between the Republicans, the Democrats, Insurance Companies, and the medical industry (See Full Story). Now she's going international with that negotiation style? To me, the political animal, Barack Obama, made the Hillary choice for all the wrong domestic reasons and without considering the importance of having a tactful handler in foreign affairs.

What ever happens, the next four years could be very exciting and, hopefully, not disastrous.

Favorable Bias?

One week you'll hear the results of a study that say coffee is bad for you. Then, a few months later, the results of a study are released finding that coffee is actually a healthy drink. The difference between these two studies is usually the fact that the latter is probably paid for by the coffee industry or coffee growers. Therefore, there's a built in bias to make coffee look good.

In many ways, the results of the Obama/Blagojevich internal investigation (See Full Story) leaves me feeling the same way as all those pro-coffee studies and the studies that are favorable to all those other products that are suspected to be bad for us. It's hard to trust the results of an internal study when at least one of the key Obama people like Ralm Emanuel is still ducking the press. That's just my opinion.

BTW: I love coffee - good or bad for me!

Image by the queen of subtle's photostream on Flickr with Creative Commons Licensing. All rights retained. (Click to View Other Works).

Is The Federal Bailout Stifling Credit?

Banks have a simple and basic business model. They take in cash from depositors and, then, use that cash to make loans. Those loans become the income basis to which they can pay interest to their depositors and cover their expenses. Hopefully, after paying expenses and interest on deposits, the remainder is profit.

So, if banks need loans to make money, why aren't they giving up loans to consumers for new houses, cars, tuition, remodeling, new businesses, etc. Partly, it's because they don't want to get burnt with bad loans. But, another part of that is the Federal Government. By the the U.S. Treasury giving them bailout money, the incentive that drives them to make loans, their profits on lending, is being negated. In many ways the Federal Government has become their guarantor that they can pay interest to their depositors and pay their operating expenses without having to give out loans. There is no profit motive and consumer loans won't flow again as long as Daddy U.S. government is around to give them money. In essence, we have created a welfare system for our banks and all the ills of any welfare system are showing up in making our banks lazy and not willing to work for their money.

Merry Christmas

If Christmas, to you, is merely a secular holiday of cards, gifts, Santa, and parades, I say: "Merry Christmas." If you are a non-Christian and believe that Christ was a good and holy man who has sustained his life story for over more than 2000 years, then, I say: "Merry Christmas." If you are a Christian and, more than anything, you are celebrating the birth of Christ as the savior of mankind, then, I really say: "Merry Christmas and Hallelujah! Christ is born!"

Merry Christmas to everyone!

A Look Back At Oil

With crude oil prices breaking below $38 and gasoline falling to below $1.66 per gallon on a national average, I thought it might be interesting use the old "Internet Way Back Machine" to look back at election year 2000 and the Clinton Administration, Al Gore, Bill Richardson, and oil prices.

First a little background. The year 2000 was a Presidential election year. The then-Vice President, Al Gore, was running against the current Governor of Texas, George W. Bush. The stock markets were trying to recover from a collapse of the Dot-Com bubble in March of 2000. The economy was clearly slipping into recession. Just three years earlier, the United States Senate, at a vote of 95-to-zip, put the kill on any signing of the Kyoto Protocol in order to reduce green house gases. This was done to avoid the almost singularly targeted deterioration of the U.S. economy because Kyoto placed the highest burden on us: the world's heaviest consumer of oil and oil products. The blockage of Kyoto was a result of the passage of Senate Resolution 98 of 2000 and was jointly submitted by Democratic Senator Robert Byrd and the not-hardly-Republican, Senator Chuck Hagel. The Clinton Administration never again pursued the Kyoto Protocol in the nearly remaining 3-1/2 years in office. And, the "Fools on the Hill" (Capitol Hill) never again thought it was important to push for Kyoto until George W. Bush was in office and until their sky-is-falling and Chicken-Little-sounding leader, Al Gore, made a very profitable career out of Global Warming.

In late 2000, oil prices wwere reaching new, historic highs and Bil Clinton and his Administration were worried that high oil prices might dash Mr. Gore's chances for the Presidency. During that time, oil got to a record high of $35 a barrel (just about where we are now). The United States (and the world) was reeling from high gasoline and heating oil prices (Check out this article from July 10,2000 when gasoline hit $2.29 a gallon). From this except from a September 21, 2000 CNN online news article (See Full Story), you can see that the anti-oil Al Gore was all for getting more oil into the market place so he could get elected:

"The Gore plan

Rising fuel prices could threaten a central platform to the Gore campaign -- the strong economy.

In a speech in Hollywood, Md., Gore called for several oil releases of five million barrels each from the strategic reserve and further releases in the future to help stabilize prices. (220K WAV or 220K AIFF)

Gore also recommended instituting a permanent home heating oil reserve in the Northeast to be tapped when oil prices rise, $400 million in emergency funds to help low-income families, and a temporary $600 million tax credit for home heating oil companies to encourage them to increase their supplies.

"We have to take action because American people are being taken advantage of in an unfair way," Gore said in prepared remarks. "OPEC needs to keep its promise, raise production and bring prices down on the world market."

The Energy Department predicts heating costs will be a third higher on average this winter than last, and could go even higher if there is severe weather.

The vice president also took another swipe at the oil companies, claiming they were "profiteering" at the expense of American consumers saddled with $2-a-gallon gasoline during the summer and faced with an expected price shock in the winter heating season.

"You should never have to rely on the good will of the big oil companies to heat your home or drive down the highway," Gore said.

According to Gore's plan, the companies who buy from the reserve should replenish the reserve when prices are cheaper."

Back then, Al was hardly into being "green". He was singularly focused on getting elected. If
anything, he was more "black-oil" then than "green" by calling for OPEC to increase production of oil to feed the needs for the world to spew out more carbon dioxide. No call, then, for the reduction of oil to save the world. Not from Al. Not from Clinton. That enlightenment only came later. On top of it, Bill Richardson was running around the world to jawbone OPEC to increase production and bring prices down. After each trip, he would come to the microphones and say with certainty that OPEC had promised to increase production and oil prices would come down. However, that was always a bunch of political malarkey. So, with no OPEC production increases in sight, the Clinton Administration decided to, for the benefit of Al Gore's campaign, take Al Gore's lead and start releasing oil from the strategic oil reserve. Richardson defended that rationale in an appearance on the News Hour with Jim Lehrer (See transcript) .

My purposes in bring this all up are many. First, I find that Al Gore showed absolutely no interest in Global Warming when he was running for President. Now, only eight, short years later, the world is at the brink of disaster. I guess it was all Bush's fault for not signing onto Kyoto. Then, there's Bill Richardson. As an Energy Secretary under Clinton, he was terrible and totally ineffective. Now, he's Obama's pick for Commerce Secretary. Give me a break! If the Clinton Administration was so "hot" economically, why, then, did we run into a recession at the end of the Clinton years? Why weren't they better negotiators in working with OPEC to keep oil prices down? Why wasn't "green" an issue then as it is now? Now, Obama has all those old-Clinton-istas on his staff. Sounds like the same old Clinton B.S. for at least the next 4 years! Lastly, in the face of high oil prices, nothing was done then, as now, to increase production. It was all forgotten as oil prices fell in the face of the Clinton-recession that was handed to Bush. It seems that we have never learned from our past. My guess is that 8 years from now, high oil prices will again be an issue. Despite all Barack Obama's talk, we won't be anymore oil-independent than we are today. In fact, I'll bet we are even more committed to OPEC in the eight years to come. Just my opinion!

How Long?

The housing bubble broke around the 4th quarter of 2006; just about 2 years ago. At that time, it was estimated that there was about 13 months of housing inventory in the country. In some hot areas, the inventory was about 16 months. Under normal circumstances, we should have recovered from that bubble in about a year's time as the inventory was depleted. But, we haven't. We are two years past the bubble-break and new home building is still seeing 18+% per-month drops (See Full Story). That's because we aren't in normal circumstances.

The thing that is complicating the whole home sales mess is primarily the foreclosure rate. This added tons of inventory, all those foreclosed homes, back into the real estate market. Many of these are really big, fixer-uppers that will need a lot of work before being resold. To complicate things further, consumer credit is tight. Probably as tight or tighter than during the great depression. Click to view a consolidated U.S. Consumer Credit chart as a popup window from Briefing.com's website. If you look at that chart, you easily picture a downward averaging slope from July of 2007 to September of 2008. That shows clearly shows the declining credit situation in this country.

I guess the issue will be how long available consumer credit will continue to be so restrictive and how much lower home prices will go before there is some daylight on this recession. When some bottom in these two areas is actually reached, we will be staged for a recovery. The Federal Reserve bank has lowered its interest rates for borrowing money to a target of 1/4 to zero percent; almost free money. But, only to the banks. Until the local mortgage lenders (those banks) take some risk by taking on more mortgages and other consumer loans without such steep conditions, like 20 percent down, we could remain in this situation for ever.

There is one fact that will always help the home market: birth. No matter the recession, people will continue to have babies. Those babies of two decades ago are going to need housing. That's pressure that the housing market can always count on. In times like this, you can also count on family members to help their sons and daughters with a down payment on a house. But, we really need those banks to lighten up to help recover this economy. The best money spent by our government would be to act like a "co-signer" on loans; or, in other words, a loan guarantor. This means they will have to, somehow, get down to the consumer level for loans and stop focusing on the banks. I believe Federal Housing Administration (FHA) has a role here but I haven't heard that agency mentioned even once since this housing bubble burst. As usual, just my opinion.

Obama and his Pastoral Choices

The news, right now, is filled with a lot of commentary about Mr. Obama's choice of Rev. Rick Warren to deliver the invocation at his Presidential Inaugural Ceremony (See Full Story). For sure, the gay community and their Democratic supporters are outraged by this particular Barack Obama choice. But, in reality, there is no difference between Obama picking Rev. Rick Warren and his previous pick of Reverend Jeremiah Wright. It all has to do with politics and the "popularity" that picking a particular pastor affords him.

When Barack aligned himself with Rev. Jeremiah Wright it was all about being affiliated with a strong and popular pastoral figure in the Black community in which he resided. That helped Barack with his future plans in politics. The same is true with Rev. Warren. Right now, there isn't a single religious figure who is so broadly popular across this country. Popularity is the bottom line with Barack. That's why it was so easy for him to throw Rev. Wright under the bus when that time came. It didn't really matter if he had a twenty year relationship with Wright or not. It was just time, politically, to cut the ties. That's why, now, he's so quickly moving to the center and to almost the center-right of politics. You can kiss all the lefties that got him into office good bye! They are no longer needed. As I've said, he's thrown so many people under the bus in his journey to the Presidency that all four wheels are totally off the ground!

You can always expect Mr. Obama to do the popular thing. This is a man who, like Clinton, is poll driven. This was obvious when he did the Wright-thing instead of the right thing. When on the national stage, the Wright-thing became the wrong thing. Now, it's the Warren-thing.

Let The Good Times Roll

It's human nature not to raise questions when things are going good. You know...let the good times roll! And, those who scheme to take your money always use this fact to their advantage. This fact is at the core of every Ponzi scheme.

The recent Bernard Madoff scandal (pronounced "made-off" and resulting in many an easy joke), just reinforces this fault of human nature (See Full Story). As long as he was able to show his investors (or should I say: his "marks") that he was able to provide phenomenal returns, no one would question his accounting. But one man did and he was ignored. That man, Harry Markopoulos, a financial analyst, complained to the Securities and Exchange Commission (SEC) in "1999" on the basis that it was impossible for Madoff to legally have the returns that he and his phony investment firm were showing (See Full Story). Harry Markopoulus' nose and that old saying of "If it sounds too good to be true...it is" got his suspicions up about Madoff. Sadly, if he had been listened to, Madoff and his Ponzi scheme would have been stopped 8 or 9 years ago.

People seem shocked that smart people like Steven Spielberg lost money and, all those combined, lost over $50 billion in Madoff's scheme. But, how easily they forget. Even a well scrutinized, public company can screw the public. It wasn't that long ago that Enron put the bite on the entire investment community through its phony accounting. Fortune magazine was so enthralled with Enron, at an earlier time, that it called it: "America's Most Innovative Company." Unfortunately, the innovations were in bad, falsified accounting.

When Mr. Obama announced his pick for the SEC Chief, Mary Schapiro, he blamed lax oversight for the Madoff scandal. I guess that was another one of his cheap shots at Bush. However, Mr. Madoff's firm was the kind of operation that was never federally regulated. Federal law, going back to the 1970's and during both Democratic and Republican-controlled Congresses alike, never mandated regulation of the Madoff-type of operation. That was Madoff's advantage. Like a lot of typical political B.S., Mr. Obama is just expressing the hindsight and the lack of foresight that all politicians always seem to have. Let's not forget that Enron was a regulated security with constant public and financial scrutiny and it got away with what it did during the Clinton Presidency and a primarily Democratic-controlled Congress. Mr. Obama may talk big; but, regulation or not, there will always be another Madoff or Enron scandal in the future of America; and, just maybe during Mr. Obama's term or terms in office. Just mark my words.

One last comment about Madoff. He's out of jail on $10 million bail (See Full Story). Only in America can a person use the money that he stole to post the bond he needed to get out of jail. How stupid is that!

Almost Criminal

This mortgage problem has created a whole new crop of near criminals. These are the people who have decided that, under the mask of the current housing crisis, to just walk away from their current mortgages (See Full Story). This is not because they can't pay; but, instead, because they have decided that they just want out of their existing mortgage contracts so they can get lower rates without the cost of refinancing. Some experts think as many as 50 percent of those demanding adjustments to their current mortgages are faking their potential foreclosure status. Then, on top of that, there are services that are ready and willing to aid and abet them (See www.walkaway.com) in their near criminal activity. Often, they elect not using these services, they simply stop making their payments to force their mortgage lender to come to the table and give them favorable rates. Given the current economic situation and that banks and mortgage lenders are almost on their knees from being laden with bad mortgages, people pulling these stunts are in the drivers seat because those companies can't afford anymore bad assets from foreclosure.

To some extent, I blame our politicians from creating this situation; especially Barack Obama and his "mother" government campaign pledges. There is a psychological belief, on the part of some, that there is no reason to take personal responsibility for their lives. Note this video in which an Obama supporter, following Obama's win, is clearing saying she won't have to work, or pay for her mortgage, or put gas in her car or, I'm sure, hold herself accountable for anything in her life (See YouTube video). That's because Obama will personally take care of her. I guess this is the new mindset of America; the change we can expect from our next President.

I think there's another problem of a similar sort in paying taxes. If you watch cable news long enough, each day, you will see a whole host of advertisements from companies that specifically target individuals who haven't paid their taxes. You hear things like "Maggie May owed $150,000 in back taxes and thanks to Screw-the-Goverment, No-Taxes, Inc., she settled with the IRS for $5,000." Of course, they don't label themselves as "Screw-the-Government" companies, but they should. That's what they are in business to do. Just like those who are forgoing mortgage payments, you have to wonder if these TV ads are contributing to a whole society of non-taxpayers. Certainly, the most famous case was Wesley Snipes who just stopped paying his taxes. He owed $11 million dollars but was acquitted of tax evasion (See Full Story) .

You don't think that sends a message!

We are a society that has become less and less responsible for our own actions. You can see it in the two instances that I have shown above. You can see it in our school systems. You can see it in the decisions by the criminal courts to let people out on the streets to rob and kill again. That's a liberal mindset that seems to think that no one should be responsible for their own actions. It's society's fault and never the guy doing the robbing or killing. It's Wall Street's fault. It's the mortgage company's fault. It's the IRS's fault. It's always someone else's fault. This is a very dangerous path that we are on. The America that was... may never be again. Just mark my words.

Another Gold Rush

Over the last two weeks, the dollar has weakened by about 20 percent and gold is up over $100 dollars. That basically means that investors/speculators in the world are now dumping the greenbacks and buying the protection of gold. What that is saying is not good for the United States. The dumping of dollars shows fear in the United States. For weeks, the dollar had been strengthening against other currencies and gold had been falling. But, no longer. The investment community is now seeming to say they don't like all the additional bailout plans. It is no coincidence that the rise in other currencies and the fall in the dollar started with all the talk of bailing out the auto companies. Further, Mr. Obama's plans for another half to three-quarters of a trillion dollars or more in so-called stimulus plans is not setting well. I think the amount of debt that this country is quickly amassing is of considerable concern. And, that concern is driving gold prices up.

As a country, the United States will have accumulated a deficit against this year's tax revenues in excess of one trillion dollars. Mr. Obama plans another near trillion in spending programs and stimulus when he and the Democrats take control. Further, the national debt is ballooning and we are borrowing more and more to cover that debt. In the last two months alone, the interest that we will be paying on our national debt will be at a rate in excess of $18 billion a month; and growing (See Full Story). That means that every man, woman, and child needs to ante up at least $60 a month just to cover the interest on our national debt. We are up to our necks in debt and, possibly, approaching a tipping point where there is no reasonable way to pay everything back. That's why gold is on the way up again and our currency is weakening fast. The world is wondering if we will ever get the money back to pay for it all.

My Pick For Man of the Year

Just recently, Time magazine announced that they have chosen Barack Obama as their pick for this year's 'Man of the Year'. Of course, that makes perfect sense because the whole Time-Warner/CNN operation has been, and is, in the bag for Barack Obama and the Democrats. They were one of the media cheerleaders that got him elected without any vetting of his past. While Barack's accomplishment of becoming the first Black President (second, if you count Bill Clinton) is a great feat, he doesn't have many more accomplishments beyond that to really warrant the 'Man' title. If Barack Obama is such the "near-god" as the majority of the liberal magazines seem to think, I would expect that there would be plenty of future opportunities for a mag like Time to post Barack as their 'Man' in a year or two or even three or four years from now. However, by choosing him now, what next? Is Barack going to wind up being the 'Man for all Seasons" with him being on the cover of Time each year. That would be record breaking. And, my guess is that will probably be the case. This will make the 9th time in a year that Barack has adorned this magazine cover already (Click to see my previous blog of August titled 'Time and Time, Again' which talked about how ofter Barack has been on the cover of Time). Talk about a habit! (Maybe they should just change the name of their magazine to 'Barack' or 'Obama' or, I know, they could just call it 'BO'!) They're just so ga-ga over Barack at Time that they probably already have next year's Barack 'Man' cover ready along with 11 others for the coming year.

Now to who I really think the 'Man of the Year' should have been. I, unlike Time, based my pick on measurable accomplishments that have had direct impact on our country. To me, the 'Man' who did the most in the last year (actually, year-and-half) to warrant the 'Man' title is General Petraeus. His surge tactics have turned a war around, from looking like a potential loss to, now, looking like a win. He has saved hundreds of American military and civilian Iraqi lives. Thanks to this General, it now looks like we will leave Iraq with honor and we will be able to leave in just a quick, few years. He, literally, broke the back of Al Qaeda in Iraq. Instead of the potential of over a thousand combat deaths in a year, the surge has brought that level to under 200 this year and falling by the day. Quite a demonstrative set of accomplishments. That's why he's the man who should have been picked as the 'Man of the Year'!

What Goes Around 'Might' Just Come Around

Mr. Obama isn't even in office yet and the scandals seem to be swirling all around him. Of course, there's Governor Blagojevich and the recent corruption issues in Illinois which might actually touch people in his own inner circle; like his designated Chief-of-Staff, Rahm Emanuel. But let's not forget an old scandal involving Tony Rezko and his dealings in Chicago. Obama certainly had a close relationship with Rezko and there was a questionable land deal that may involve Obama. Rezko is also affilitated with Blagojevich. Additionally, the Service Employees Union (SEIU) is implicated in some of the Blago dealings. This group did a lot to get Mr. Obama elected. Now, to top everything off, it appears that his designated Commerce Secretary, New Mexico's Governor Richardson, is under a cloud with a Grand Jury investigation into possible illegal or inappropriate PAC/campaign donations (See Full Story).

Mr. Obama isn't the only one who should be worried about the fallout of all these scandals. Nancy Pelosi, too, should be in the cooker for her 2006 election claims that the Republicans had a culture of corruption. If Chicago and Illinois Democratic politics isn't a culture of corruption than nothing is. The scandals around the Democrats just keep piling up. You've got Congressman William Jefferson and his "cold" cash problems. Representative Charlie Rangel and his housing, travel, and tax problems. Oh, and when it comes to tax problems, I would be remiss if I didn't mention the Senatorial-wannabe Mr. Franken for his failure to pay taxes in a few States that he worked in. Then, there was the Democratic Governor Elliot Spitzer and his sex-on-the-side problem. Now, we have a potential raft of problems in Illinois. In just two short years, Nancy, while not personally, is really racking up the Democratic scandals.

At a rate of a scandal nearly every 6 months, Nancy Pelosi's gang of Democrats just might have a shot at the Guiness title for a decade (yet, to come) of corruption. I can't wait until I the see the next one. They're getting increasingly creative. Bribery cash hidden in a freezer. A former chief law enforcement officer buying time with a call girl. The selling of a Senate seat. The bargaining for favorable editorials and the shaking down of a hospital. And, the Chairman of the Ways and Means Committee (the tax committee) having a back-taxes problem! Unbelievable!

What The Global Warmist Don't Want You To See

In a recent Associate Press article by Seth Borenstein, these comments were made about Global Warming: "The 10 hottest years on record have occurred since Clinton's second inauguration. Global warming is accelerating. Time is close to running out, and Obama knows it."

Oh, really? Someone ought to direct Mr. Borenstein to this world temperature chart provided by NASA (You can click on it to get a larger view):

Other than a large spike in 1998, there hasn't been any real upward trend in the overall world temperatures in 14 years (See Full Story). This panic being expressed by the Global Warmists is just not real. In fact, since a small spike in 2007, the world temperatures have actually seen a significant fall.

I guess if you tell a lie often enough the world will start believing it. With Mr. Obama taking office, I see a totally unwarranted movement towards a problem that might just be political hype and one that lacks a factual basis. Trillions will be spent with jobs being lost, as in the coal and in the petroleum industry; just to satisfy the environmentalist mindset. We all will be paying more money for our energy needs in the future. What's worse, we will start seeing higher energy costs in the midst of worldwide recession.

Work Stoppage

Sometimes people take their jobs very seriously. Often, others around them feel uncomfortable because they feel that these "go-getters" and "workaholics" are making them look bad. I think this is the case involving the Mayor of South El Monte, California, Mayor Blanca Figueroa, who has been legislated against for being a little too serious about her work (See Full Story). Apparently, she had been spending hours upon hours in catch-up-time because she spends all her time, during the day, in meetings. Now, the City Council has, with a 4 to 1 vote, decided that she can't work past 11 P.M. in City Hall. Actually, they legislated that no City Hall personnel can work past the curfew of 11 P.M. By doing this, the Council tried to make it seem like they weren't singling out Ms. Figueroa. In justifying that curfew legislation, they used the lame excuses of security, safety, and liability.

I can feel for her. As a former senior manager of a Fortune 500 company, I know why Ms. Figueroa is being forced to work those long hours. Because of my meetings, I would have to work 2-3 hours (or more) before and after office hours to stay caught up with mail, letters, reports, etc. In other words, I had to spend my off hours in doing much of my normal daytime job. And, when times are tough, the work hours can only get longer.

This story has made national news because most people find it silly that any City Council would actually do this. Unlike the Mayor's overworked situation, the City Council has enough time on their hands to discuss and vote on the Mayor's work habits. Instead of figuring out why Ms. Figueroa is working longer, the Council has arbitrary forced her to work less hours. That will really help the situation. Given her apparent dedication to her job, the Mayor will probably have a mental breakdown as she gets farther and farther behind in her work. She probably needs the addition of an assistant to handle some of her workload. However, in these tough times, I am sure there's no funding to hire another person. In fact, that same City Council is probably mulling over city job cuts in this bad economy.

Ms. Figueroa has been in her job for 11 years. Only in the last 8 months or so has she been forced to work her crazy hours. My guess is that it is the City Council that is the root cause of all her extra work. They probably kept piling on the work by passing resolution after resolution that needed the Mayor's involvement. That's where most Mayor's in this country get their additional workload. The City Council needs to look in the mirror before passing what appears to be a silly curfew law. Just my opinion.

Are All Politicians Sociopaths?

Most dictionaries define sociopaths as follows:

A person whose behavior is antisocial and who lacks a sense of moral responsibility or social conscience.

With the Blagojevich scandal in Illinois, the word "sociopath" is being thrown around a lot. Partly, this is being done as a future defense against any "disclosures" that he may make in implicating the politically powerful of Illinois and, just maybe, Washington. By making him seem a little crazy, other politicians feel that they are inoculated against any Blago accusations.

Certainly, you can point to a Blagojevich as a sociopath because he apparently has little or no moral compass based on his actions over the last few weeks. His little speech the day before he was arrested could easily be said to be "sociopathic" by its very nature (See that Video). But, this is what all politicians do. They are almost always on the defensive and they can either use their words as swords in their defense or as tools to sell their snake oils. If they aren't outright lying; then, they are twisting the facts in any way possible to elicit support from those that are listening to them. Their whole life is spent blurring the lines between truth and falsehood. That's what politics is all about.

Like Candles

For all of us, our lives are just like candles. For some, the candle burns long. For others, so terribly short. A fatal wind can extinguish our lives just like a sudden wind that robs the candle of its flame. The best we can ever hope to do is to burn as brightly as possible while we still have a flame. Always live your life to the fullest.

Bush's Dilemma: The Auto Bailout

Last night, the auto company bailout died in the Senate. This was all due to a strong block of Republicans opposing it. This morning, the White House announced that they will use the TARP (Troubled Assets Relief Program) or, in other words, the previously approved Congressional bailout money (the famous $700 billion)to provide a temporary bridge until Congress reconvenes.

Bush is doing this because he doesn't want to be seen as the "President who killed the auto industry in America." He also doesn't want to be associated with providing government funding and the subsequent debt to an auto industry that he and most people feel will continue to fail. That's because anyone with an ounce of brain power knows that funding without deep restructuring will just wind up being political suicide down the road. Instead, he would like to leak just enough money to get the autos limping into the next Administration's hands. This way, the full $35 billion needed by the auto companies will be tagged to Barack Obama and the Democrats. Then, if that money fails to resuscitate the autos, the whole mess will be sitting squarely in the laps of the Democratic party: from Barack to Reid to Nancy Pelosi.

For sure, the auto companies will get their help through to the next Congress; but, without any Republican senatorial help. The Democratic leadership will not be happy because they wanted the Republicans to be in bed with them on this. That way, the Democrats would have had political cover in the event that this funding doesn't work (Which it won't!). But, on the other hand, the Democrats will be somewhat happy because they will have been seen as working with Bush to save the auto companies and the United Auto Workers union. Bush will be happy because he will be able to "Pontius Pilot" himself from this problem and not have it be another stain on his legacy. The auto companies won't be too sad because they know that they will ultimately get their full amount of funding when Congress reconvenes under a new President. Now, is everybody happy?

Strange Bedfellows

Since Mr. Obama began forming his Administration, a strange thing has started to happen. The moderate left-of-center liberals appear to be feeling a little jilted over their pick for Prez (See Full Story). Those on the far left are really getting steamed. And, surprisingly, people on the right (not the far right) are pleasantly surprised by the somewhat centrist position that Mr. Obama seems to be taking with each new appointment in his Administration. He is even hinting at no tax increases in contradiction to his campaign promises.

It is no wonder that Mr. Obama appearing to be a highly political animal. But, he has played politics with every decision he has made. During the campaign, he has thrown so many people under the bus (even his own now-dead grandmother) that the damn bus is 40 feet off the ground. Now, it appears he might be throwing the liberals who got him elected under that same bus .

One can only wonder what is going on. "Me thinks" that he has decided to do the right thing for the country and not what is ideologically correct for his political party. If that be the case, he has, too, decided to manage this country from the middle and, in doing so, has the chance to become a great President. And, just maybe that's his goal. At the very least, he just might want to keep his new job for more than one term. If that be the case, his second term in office could wind up being a liberal landslide of legislation.

Conservatives are doing the right thing by backing this guy as long as he keeps on this path. In the meantime, the liberals are biting their lips and are getting a little concerned over the lack of change-left that they had anticipated. So, oddly, it is the conservatives who are in bed with Obama at this juncture and the liberals who are laying on the floor in confusion.

A Political Nightmare

I couldn't think of a bigger political mess than what has just been unraveled in Illinois.

You have a sitting Governor who has been indicted for, among many other things, auctioning off the United States Senate seat that is being vacated by Barack Obama. Out on bail, this guy "still" has the power to appoint an interim Senator to replace Barack Obama (See Full Story). If he does replace Barack with anyone, whoever does get that Senate seat will have a black cloud over his/her head because everyone will think that person got the job because they were in the bidding for it. On top of that, there are several unnamed "candidates" in the indictment that may or may not have been bidders for that Senate seat and complicit with the Governor's demands for "play for pay" on that Senate seat. These probably are all top politicians in Illinois who could wind up being indicted also. Further, the supposed friend of Barack Obama, Tony Rezko, is also named in this indictment. To top that, Barack Obama's name is referenced over 40 times in those legal papers that were filed yesterday; although there is no indication of any guilt in making those references.

As I said yesterday, this is Chicago/Illinois political corruption at its height. Normally, these kinds of things aren't so tragically exposed to public scrutiny. Typically, it's a bunch of backdoor deals that never see the light of day. Now, a whole mess of people, besides Governor Blagojevich (a.k.a. "Blago"), are bound to be indicted. Could those indictments include people who are either close to Barack Obama or, even, in his new Administration? Who knows? Only, time will tell. However, don't forget, Obama had to be knee deep in Illinois politics to get where he's at today. I just think that it was interesting that the man of so many words, Barack Obama, was somewhat at a loss for words yesterday when he denounced involvement with Blago.

I think you can be assured that this mess will somewhat tarnish Barack Obama's way into office; even if he had nothing to do with it. Further, this will just enhance the public's belief that there is nothing but corruption in politics. Lastly, it seems to be another big blow to Nancy Pelosi's 2006 election campaign slogan that tagged Republicans as being the only corruption in politics. The Democrats, from William Jefferson to this one, are working hard to take that moniker away from the Republicans. Isn't politics fun!

Chicago & Illinois Politics

This morning just proved, once again, how dirty Chicago and Illinois politics can be with the arrest of the current governor, Rod Blagojevich ( pronounced blah-goy-a-vich) (See Full Story).

The game of who you know is the popular sport in my former home state. Corruption in Illinois has always had money at its root cause. Before this morning's arrest of the current Governor, the previous Governor, George Ryan, a Republican, was convicted of selling government contracts and licenses and other state offerings of value. Apparently, corruption is an equal opportunity sport in the State and not just restricted to Democrats.

From the Mayor's offices of the City of Chicago to state Congressmen and to the Governorships, there has always been a long list of either convicted-for or implied corruption. With a Chicago politician now entering the White House, you really have to wonder how clean this guy is; especially coming from the depths of the Democratic Party in the City of Chicago. There has always been some questions about how he got to be an Illinois Senator and, then, a U.S. Senator. Was it Obama who earned the job or was it the political machine of Chicago and Illinois that elevated this man to his various progressions of office and, now, the White House(Here's a sampling). Oh, well. He was voted in and he will be our next President. Hopefully, he doesn't really have any typical Illinois political skeletons rattling around in his closet! This is especially true since the national media neglected their responsibility to this country by not adequately vetting Mr. Obama before he was voted into the Presidency.

Credit, Bad News, and Consumer Fears

No matter what the industry, the economic woes of that industry can be blamed on three things: (1) the current credit situation in this country; (2) the constant bad news about jobs and the economy; and, (3) and consumer fears over that bad news.

If you look at the auto industry, for example, people aren't buying cars because they either can't get credit or, because of all the bad economic news and the possible impact on their own economic situation, they are afraid to commit to the purchase of a big-ticket item like a new car. Even, more so, housing is in the same situation. However, the impact on the housing market is made worse by the continually falling home prices.

As I have said before, more than anything, a recession ,or even a depression, is 99 percent based on the psychological impact of consumer fears about the economy.

Right now, people and banks are cautiously guarding their cash. It is a justified reaction to the housing credit meltdown. The banks don't want to lend unless they are assured of the best credit conditions. After all, they don't want to get burned, again, by holding any more bad loans. At the same time, people don't want to over-commit on spending because of the uncertainty of our times. That means that spending has come down to essentials and hardly any money is be spent on the non-essentials; ie. that Cafe Latte every morning.

The consumer has assumed this fetal position because the news is consistently bad. Day after day, massive job cuts are being announced. The auto companies are talking about folding their tents and the possibility that 3 million more Americans might be out of work. Each month, existing home prices continue to fall. Foreclosures continue at record rates. The unemployment numbers are bad. And, almost every day, you have either Barack Obama or George Bush, Henry Paulson, or Ben Bernanke, or various members of Congress coming before the microphones in order to announce another program to fix the economy. This is just unsettling to the people of this country. That's why spending is down and that's why spending will continue to drop.

In order for this economy to get back to good health. The bad news and the psychological impact of that news has to stop. The announcement of layoffs, foreclosures, and increasing unemployment has to either level off or come to an end. The continuous declarations by our politicians have to come to an end. That only reassures the buying public that things are bad. Only when the noise stops about the economy will the consumer start spending again and effectively get this economy going again. All these government spending programs don't mean anything if the news continues to scare the consumer. There is a natural process of economic contraction that has to take place. The excesses of the last 20 or 30 years has to be shaken off. Only until those excesses are completely shed will things look better.

For example, spending billions on the auto companies will just keep them in business for a while. However, the real problem, the consumer not buying those cars, is going to be out there for quite a bit longer. To me, our politicians have this all backwards. They want the economy to adjust to the failing car companies. However, the reality is just the reverse. The auto companies are going to have to adjust to the failing economy. That means jobs, expenses, and product lines will have to be adjusted downward to meet the current economic conditions. People are not going to rush out and buy a $26,000, around-town only electric car that will need a multi-thousand dollar battery replacement in just a few years. The future of our auto industry is not in those electric cars. For that matter, the same is true with the hybrids. This isn't a consumer-driven move by the auto companies to sell more cars. Instead, it is being driven by our own politicians and their newly passed fuel efficiency laws (CAFE standards); which, in light of falling oil prices, seems less important, today, than keeping our auto workers working.

Having a sounds-good political commitment to creating 2.5 million jobs over the next four years on infrastructure "ain't hardly gonna do it" when nearly 2 million more people than normal are losing their jobs every year. Do the math. The Bush Administration and our Federal Reserve Banking system are correct in focusing on credit. Available credit will ultimately help get the consumer and businesses spending again. However, only after the economy adjusts to a new leaner lifestyle will the journey through this recession come to an end. Just mark my words.

An Auto Company Allowed To Fail

At a time when our lawmakers are trying to save our auto industry, there is no such luck in Serbia for the Yugo. The last, hapless Yugo recently rolled off the production line (See Full Story). When shipped to the United States, it had a you-get-what-you-paid for price of about $4,500. It was only sold in this country from 1985 to 1991; and, because of its propensity for breaking down, it was the brunt of several jokes:

Yugo is really short for: "Honey, "You" better "Go" find a mechanic.

A Yugo comes with a 3-speed transmission: Park, Tow, or Push.

Yugo owners are sure to go to heaven because they spent their hell on earth.

Why does a Yugo come with a rear window defroster? So you
can keep your hands warm while pushing it.

What do you call a Yugo with dual tailpipes? A wheelbarrow!

Certainly, this is just a sampling of the jokes I've heard over the years. So, if the "Big Three of Detroit" want to say that no country will allow their auto industry to fail, they should be careful with that statement. Obviously, there is one country out there, Serbia, that said no to their auto industry.

Image by axoplasm's photostream on Flickr with Creative Commons Licensing. All rights retained. (Click to View Other Works).

Oil In Free Fall

It seems like the price of oil is falling faster than a rock thrown into the abyss. A few months ago, when oil broke $100, I thought oil would fall to $60 or even $50 a barrel. I said that at a time when the oil expert, T. Boone Pickens, was predicting that oil would only fall to $80 before rising again. When oil broke $60, I wrote in this blog that oil could hit $45. Well, oil just blew through that level and is now trading at a little over $43. Recently, the brokerage firm of Merrill-Lynch predicted a level of $25 a barrel (See Full Story). If prices were to fall that low, gasoline would easily go below $1 a gallon.

With prices this low, all the chatter of pushing for alternative energy sources has pretty much been put aside. Further, the average "Joe" and his family is getting a much-needed break on their monthly expenses; especially the cab drivers and truckers of the world. Better than that, some of our biggest enemies in the world are getting hosed with these low prices. Iran, Russia, and Venezuela are the ones that are getting hurt the most.

In a way, oil coming down has been a win, win situation for everyone except the environmentalists and global warmists. Further, the economy has put any forced carbon taxation on hold. That means your energy prices will continue to fall without our government forcing higher prices due to any "carbon" restricted measures. Before all this happened, a lump of coal for Christmas was getting to be out of the price range for most Americans. Now, it appears that there might be something to be happy about during this Holiday Season.

Unemployment at 6.7%: 533k Jobs Lost In One Month

Anytime more than 1/2 million people lose their jobs in a single month, you are looking at bad times, and that's what we saw with this morning's unemployment number (See Full Story). However, the unemployment rate is now at a "relatively" low 6.7 percent as compared to other recessionary times.

Unfortunately, the press is trying to make this number worse than need be by having headlines that state: "Worst Job Losses Since 1974" or "The Highest Loss of Jobs in 34 Years". My problem with those kind of statements is that they are misleading and they paint a more dire picture than the reality.

In 1974, the population of the United States was 213 million people. Today, it is almost 50% higher at a level of over 300 million people. The loss of 1/2 million jobs in 1974 was a bigger thing then. An equivalent loss of jobs today would have to be a loss of near 800,000 jobs to have the same impact on the economy as it did in 1974. That is why most "sane" people use percentages and not actual numbers in making comparisons over such a long period of time. For that reason it is important to also note that in December of 1974, the unemployment rate was 7.2 percent and not hardly the 6.7 percent of today (Click to See 50-year Unemployment Rates per Month).

The most disconcerting number, that is buried within this morning's job's numbers, was the fact that 370,000 people in the service sector (franchises, hospitality, news, consulting, legal, real estate, healthcare, etc) lost jobs. This means that people are not spending money on what they would consider to be non-essential services. This number notably reflects the consumer's fear about our economy. It shows that people are substantially protecting the money that they have. This economy, for decades, has grown on the backs of the service sector. As a country, we have moved away from manufacturing and have moved into services as a majority and broad-based producer of jobs. Now, that mainstay of our low unemployment numbers of recent decades, the service sector, is starting to falter, so we need to worry.

The press has a responsibility to report the facts. However, bad comparisons to 1974 are a distortion and just feeds into the fear that may have caused more job losses than need be. If unchecked, each month of reporting can spiral the job losses out of control. The fog that I am trying to cut through on this issue is the sensationalism of the news that may be contributing to the psychological impact on our economy. This is a time of 24/7 news coverage. Now, more than ever, there is a responsibility to temper reporting. The headlines have to be responsible. Even, saying that "The Unemployment Rate Rises to 6.7%" or "533,000 Lose Jobs" is more reasonable than overstating the 1974 comparison. Just my opinion.

It's Worth Noting

Not much is being said about the Iraq war these days. It seems that when the deaths are way down, it's not worth noting. However, it should be. In the last five months the military deaths (combat and non-combat) have averaged at only about a single death every two days. There was a time, just last year, when some months saw an average of nearly 4 U.S. military deaths per day. In most months this year, the non-combat deaths are actually higher than those caused by hostile fire. Quite a change since the surge.

I just thought you should know.

David Gregory and "Meet the Press"

Personally, I think the people at NBC/Universal have given up completely on being any kind of a reliable or unbiased source of network news programming. For years, NBC has gone from being a "news leader" to being the "cheerleader" for the Democrats.

The latest example of their failure to provide unbiased news is the seating of David Gregory as the host of the highly popular "Meet the Press" Sunday morning news show. On that imaginary shelf at NBC, the one that contains all the news staff, Gregory is definitely on the far left side of that shelf. Over the years, the center to right side of that shelf has literally fallen down and has never been replaced. Gregory is absolutely not the middle-of-the-road guy like his predecessor, Tim Russert. (Note: Tim Russert was left of center in real life but he did his best to remain politically centered while acting in his role as the fact-finder for "Meet the Press")

During Gregory's stint as the White House correspondent, there was nothing that the Bush Administration could do that would be right in his mind. Time and time again, Gregory reflected his partisan bias by taking a counterpoint position on what the Administration was doing; rather than just ask questions or report the facts as would be expected from any unbiased news reporter. While not as wanna-go-to-bed-with-Barack as Chris Matthews and not hardly the NBC anti-Bush angry-man as in Olbermann, Gregory is still pretty school-girl-giggly over Barack and the Democrats. So, I am sure that he will be serving up as many softballs to Barack's team in his new role as lead marketeer for the new President. And, when the Republicans are on the Meet the Press, expect the hardballs to be aimed at their foreheads by Gregory.

I think, like the entire direction of NBC, "Meet the Press" will slowly (maybe even quickly) go downhill. Gregory is certainly not of the class of those that came before him. The appointment will be the second biggest mistake in less than a week for this floundering major TV network. The prior one was to have a variety show that was hosted by the latest incarnation of the "queen of mean," Rosie O'Donnell. That one day flop proved that the people at the top of NBC are completely out of touch with middle America. Gregory, in a way, is similar in temperament to Rosie and the long-term results will probably be the same. Hasta La Vista, NBC!

There's Bankruptcy and There's Bankruptcy

For political purposes, there seems to be a blurring of the definition of bankruptcy in order to make the auto makers sound as if they will completely go out of business unless they get government funding. You hear comments by some Democratic lawmakers that 3 million American jobs are at stake if the U.S. auto companies fail. That would be true if they did completely fail. However, nothing could be further from the truth in this particular situation.

First and foremost, nobody is talking about Chapter 7 bankruptcy as defined by Title 11 of the United States Code. In a Chapter 7 bankruptcy, a company ceases to be; although, in some cases, a division may be spun off and allowed to continue operations and the funds for selling that division would be used to satisfy any indebtedness of the primary company. The process by which the company is dissolved is governed by the details of this code so that the former company's debtors are fairly dealt with. All operations are ceased and a trustee is appointed to distribute all remaining assets. If the auto companies did file for Chapter 7, then certainly, 3 million jobs would be lost.

However, the form of bankruptcy protection that would be appropriate for a corporation like GM, Ford, or Chrysler who are struggling under contracts and debt is identified as Chapter 11 bankruptcy as defined by Title 11 of the United States Code. This form of bankruptcy prevents debtors from filing suit against a company in order to obtain any complete resolution of what they are owed. Further, it affords a corporation the ability to reorganize and renegotiate all contracts to levels that are more practicable for continuing operations. The whole process is overseen by a Federal court. In essence, the company continues to operate. In this case, cars and auto parts would continue to be sold and dealerships would remain in business. Most definitely, there would be no 3 million jobs being lost.

Sadly, the process of keeping the auto companies alive has been taken out of the realm of reality and practical business tactics, and has been put squarely into the B.S. of Congressional politics. Nobody wants the auto companies to completely go under. But the politicians (especially those indebted to the United Auto Workers Union) are making it sound like there are only two choices: (1) go out business or (2) get the money. Unfortunately for all Americans, this kind of lying is what we consistently get from our politicians.

Greener Than Green

Anyone who has had a fish tank knows how fast algae can build up. Seemingly overnight. There are hundreds of forms of algae. Mostly, we humans consider them all some kind of nuisance stuff that builds up anyplace where you have standing water. Definitely, some are toxic enough to kill you. However, some are actually edible. But, better yet, they just might be the future biofuel of this country.

Some forms of algae, called diatoms or micro algae, have as much as half their composition in what are called lipids or emulsified fats. Prior to the 1800's and the development of kerosene, most people in Europe and early America used oil that was indirectly derived from algae to light their oil lamps. That oil was whale oil. Whales literally pack on the blubber or fat from only eating a salt water form of micro algae known as plankton. The goal of science, today, is to eliminate the whale in getting to the oil from algae.

Interestingly, algae need tons of carbon dioxide, that evil greenhouse gas, to produce their oils. It is possible that our burning of one fuel, like coal for electricity, could be linked to the production of another fuel made from algae to fuel our cars and other vehicles. The carbon output from a coal-fired electric plant could be forced into massive vats of water or other solution where the algae could, in theory, metabolize all that CO2 and happily thrive. Then, the algae could be processed for the production of a diesel-like fuel. The overall process would be a net reduction in the overall amount of CO2 that we are outputting today.

Certainly, green (or brown) algae may be the future form of green energy that awaits us in the years to come. It, along with other forms of energy, could easily get the monkey of imported oil off our backs. To me, the trucks that transport our goods around this country aren't really good candidates for fuel-celled hydrogen or electricity for their fuel. Neither are trains, boat or planes. All those types of vehicles are going to need some type of fuel similar to diesel. Those little micro algae could be the very energy savior that keeps UPS delivering packages to half of America's front doors. That keeps those tanker crossing the oceans. That keeps the airliners transporting millions of Americans from city to city and all over the world.

The Unchanged

With over 35 announced appointments for the new, incoming President's administration, things are looking a little more like a redux of the Clinton Presidency and not hardly like the real change that Barack Obama promised. Certainly, the political right is not real happy with seeing four more (new) years of a Clinton Administration. Even more so, the political left is wondering what they're getting with their votes for Mr. Obama. The icing on that cake will be the appointment of Hillary as the Secretary of State. With that, you will almost have the complete replay of the "Clinton" Administration because, as you can expect, you get Bill as part of the Hillary package. Worse yet for the political left, Bob Gates (from the current Bush Administration) will remain as Secretary of Defense. Between Hillary and Gates, you've got one nice package of pro-Iraq War pols. I suspect the Daily KOS, MoveOn.org & Code Pink are all hitting the bathrooms as they loose their lunches over all the political centrists that Obama will be nominating.

I think Mr. Obama has decided that staying warm and cozy with the Democratic past and the Clintonistas is better, politically, than taking risks with any new people. It just proves that he really isn't the risk taker that people thought they were getting when they elected this guy. It just echoes why, on so many occasions, he voted "present" in the Illinois Senate; rather than take any real stand by voting a decisive yes or no. We got a hint of that when Russia invaded Georgia. Obama's immediate decision was not to condemn Russia; but, instead, to urge restraint on the part of both countries.

I may be wrong, but, given what I am now seeing from Mr. Obama, you can expect an even longer list of reneged-on promises. Don't expect your tax cuts any time soon. Also, don't expect him to rescind the tax cuts for the rich. In one of last week's news conferences he was already dancing around that issue of taxes for the rich on the basis of the current economic crisis. However, those that voted for him thought otherwise. But that was really a lie. Obama knew that the economy was going to be in a heap of trouble all the time he was on the campaign trail; but, then he refused to back off his position on taxes. I'll bet he even stays in Iraq longer than 16 months. The only way we'll leave on time or earlier is because the solid left of the Congress will force him to do it. Also, don't even think he will try to impose a new healthcare system on business because of the economy.

Bill Clinton promised tax cuts, too, when he first ran for the Presidency. But, those cuts were never to be seen because his economic team was against them. Now, Obama's got much of the same team standing behind him, and the economic conditions are even worse. Obama may claim that he is the "vision of change" and that his same-old, same-old cabinet will get their direction from him. Maybe. Maybe not. I suspect that the input he gets will be the same input Bill Clinton got when he was in Office. With such filtered input, Barack will wind up making the changes that his team recommends. Not the other way around.

A Cornucopia For Some

For many years, the holiday of Thanksgiving was symbolized by the Cornucopia , a.k.a., the Horn of Plenty. It was a wicker basket in the shape of a horn that was filled with the fruits and bounty of the annual harvest. It was particularly symbolic, because the first celebration of Thanksgiving in 1621 was in gratitude for all the bounty of food that God had bestowed on one of our first settlers to this country: the Pilgrims.

Today, the Cornucopia has been pretty much replaced by the turkey. Some would actually say that Thanksgiving is more represented by football and a rest-up before Christmas shopping on Black Friday. But, neither of those things are in the original spirit of the holiday.

While there are many of us who may have lost our jobs, their homes, or both, we are still a lot better off than the many of this world who will die starving on this day. A day when we will typically eat our fill. As bad as it may seem in America on this particular Thanksgiving Day, it is a whole lot worse in many other parts of the world. For that, we should be thankful. But also, for that, we should always be mindful that those, like us, who are better off in this world, should pledge to help those who are in dire need. Then, too, someday, the whole world could celebrate their own day of thanks; and, not just us.

Enjoy this holiday. And, please help others whenever you can.

The Tax Man Cometh

While Mr. Obama campaigned on cutting middle class taxes, the reality of our economy just won't let that happen. Already, Congress is talking about raising Federal gasoline tax from the current 18 cents a gallon to 40 cents. Not a big number, but it will effect the bottom lines of people who have to drive a lot for their jobs. Also, it will be reflected in the cost of almost everything we buy because trucking and shipping costs will be affected and increased across the board. Granted, we are better off than we were when oil was at $147 a barrel but, given the tough economic times, every dollar of savings may help save jobs.

I would expect that Congress and our new President will raise taxes across the board. We already had a deficit and all this "bailout money" is just making that hole in the governments wallet a whole lot bigger. The only way to close that hole is to reduce spending and/or to raise taxes. For those guys in Congress (and the White House), it has always been much easier to raise taxes than make the hard decision to cut spending.

The biggest taxes to come will be on the state and local level. At least 40 states are now projected to be in deficit trouble next year. We've already heard from California with Arnold's request for a few billion dollars in a Federal loan. However, the biggest states are all in trouble like New York, Illinois, Pennsylvania, and New Jersey. This is where the wrath of the tax man will be seen the most. States that have income taxes will all probably raise them. States that don't have income taxes will probably look at starting them. Sales taxes will go up because, in a recession, tax revenues on sales will be falling. Expect real estate and "sin" taxes on tobacco and liquor sales to increase. I would also bet that many heavily traveled roads will start "toll collections" to help pay for repair and other infrastructure rebuilding.

The problem with all these taxes is that they will ultimately be inflationary at a time when our economy can least afford higher prices. In many ways, the recovery of the economy could be stalled by a lot of new taxation. By the way, don't expect any of those new taxes to be rolled back when the economy gets better.

Obama's Job Creation Con

At yesterday's news conference, Barack Obama announced his economic team. At the same time, he promised he would create or save 2.5 million jobs by 2011 (See Full Story). Now, to those who are just totally in love with Mr. Obama, this is music to their ears. But, here's the real life facts.

As a country, we have a population of 300 million. That population grows at about 2 percent per annum; compounded. That means that roughly 6 million new workers enter the job market every year. The economy typically adjusts to that growth by adding new jobs for the majority of them. On a theoretical basis, even if we were in a recession/depression and unemployment zoomed to 10 percent, that means that 90% or 5.4 million of those newbie's in the job market would wind up getting a job.

Last year, 2-1/2 million people were added to the unemployment rolls. However, our population grew by 6 million. So, even in what most people would consider a bad labor year, 4-1/2 million people got some newly created jobs in order to have only had an increase of 2-1/2 million unemployed. If that didn't happen, the unemployment rate would be sitting at another percent to one-and-a-half percent higher; at 7.5 or 8 percent rather than the current 6.5 percent. It's just simple math. And, my math doesn't even take into consideration all the legal and illegal immigrants that are also absorbed by our job market each year.

The problem with Mr. Obama's pledge is that it is probably doable under almost any circumstance; unless, of course, we suddenly have unemployment numbers that rise to, and/or substantially above, 10 percent in a full-fledged depression. Even if we lose 3 million more jobs to unemployment next year, and the unemployment rate zooms to 7.5 ore 8 percent, there will be at least 3 million new jobs that have to be created for that number to be contained. If not, the unemployment rate will rise to 8.5 or even 9 percent. Mr. Obama's pledge is just silly political pablum that our less-and-less educated population seems to happily slurp up. Our economy grows somewhat proportionately to handle all those new babies that are born here. Remember, if the unemployment rate remains the same from year to year, at least 5 million "new" jobs are created ever year; year after year. Lastly, is anyone ever really going to remember that Mister President-elect promised 2-1/2 million new jobs in 2008 when the year 2011 rolls around? Most people can't remember what happened last month; let alone, remember what happened 3 years ago.

The Auto Show of Shows

Last week and all weekend, a lot has been made of the auto industry execs flying in on separate jets to meet with Congress. However, that's just a lot of media "fog" and the real story has to do with their actual testimonies. The Congress sent them home without the cash because they went to Washington without any facts or plans to support their need for billions of taxpayer dollars. As a consequence, they were sent home and were told to come up with a "business plan" that would say how the money would be used and how they would change their businesses to become profitable. There isn't a "dah" big enough for this one!

Basically, the auto execs thought they had this one in the bag because of the millions in lobbying money and campaign contributions they had given. Further, the relationship of the United Auto Workers union (UAW) and the Democrats, and all the get-out-the-vote work that was done by the union membership in this last election, made the cash handout a done-deal in their minds. There was no humility on their part. There was no shame at being unable to keep their businesses afloat. After all, these are extremely well-paid people (that's an understatement!) who are supposed to have their fingers on the pulse of the company. However, the only real business argument that they could come up with for getting the cash was: If you don't give the money, thousands would be left unemployed. No facts to even support that claim.

If they were really concerned about the results of their trip to Washington, they would have huddled beforehand and continued to discuss their tactics before Congress while flying "together" on a single private jet. But, they just treated this whole trip as an "necessary" waste of time.

The performance by the auto execs (if you could even call it that) is a perfect example of the symbiotic relationships that some businesses have and will continue to have in Congress. This "business plan" thing is just a ruse. Nancy Pelosi has already implied that she will give the money when the auto companies return to Washington in December. We know that, because she said that "bankruptcy" was off the table. That means the cash is the only direction. The business plan thing is merely being done for marketing purposes to make the Congress look tough (Right!) and to wash away the embarrassment of those execs flying in on private jets. The only thing that the auto companies really lost on their trip to D.C. was two weeks and any positive P.R.

As I said in my blog of last week, they'll be back when this money runs out. Probably in just a year. Mark my words.

Not Hardly Hollywood's Version Of Piracy

The days of the Hollywood-created images of three-pointed black hats with a skull and crossbones are long over. No longer are two ships locked together at sea while wailing on each other with cannon balls. Instead, today's pirates have a large mother ship that releases a small armada of fast and highly maneuverable inflatable boats and rigid-inflatable gun ships. They are armed with automatic rifles and grenade launchers and they can rule the sea because almost all commercial shipping is unarmed. On the open seas, where there is only international law, they could carry weapons. However, whenever they enter a country's port, they are subject to the laws of the country or local jurisdictions; and, that's the kicker. Most ports, especially in Africa, prohibit armed vessels from entering and docking at their ports.

Today's pirates, mostly from Liberia and Somali, are protected by the ruling Islamic radicals/terrorists who control the pirate's home ports. Their protection is guaranteed because those radicals/terrorists get a piece of the action. This symbiotic relationship is as old as the history of piracy.

This issue of piracy at sea is getting to be a serious one and no one government or collective groups of governments is capable of defending all the ships floating around the world's seas. The pirates are having a field day. Over the last two weeks, they have seized ships for ransom at a rate of almost one ship per day. The cargo of one of these behemoths can be worth millions of dollars. The annual losses due to piracy are now estimated at a staggering $16 billion and is growing by the year. A recently seized oil tanker had a load that was worth $100 million dollars; and, that's with prices at only a third of what they were just 6 months ago. Fortunately, that ship was rescued (See Full Story). Besides the value of the cargo, if this had been blown up by the pirates in some failed attempt to secure a ransom, it could have been an Eco-nightmare.

The boom days of pirate activities, from the 1600's to the 1800's, were killed off by the relentless pursuit by the British Navy and other countries. But, the boom might come back unless the international community takes action. We know that much of the pirates are Somalis. The international community needs to get tough with that country. Also, I believe that non-passenger cargo ships should be allowed to arm themselves. However, this would take a lot of treaty negotiations with numerous countries. Sounds like something the United Nations could do.

Beyond lethal weaponry, there are a number of non-lethal, but effective, defensive weapons that any ship-at-sea could use to fend off pirates. The cheapest is the water cannon, but it is slow and limited in range; and, the operator takes the risk of being shot. Another defense is to slather the sides of the ship with a very slippery foam to prevent boarding. But, under the duress of the ship being sunk, this might only aggravate the situation. Another method is to drag entanglement nets from the sides and aft of the ship. With these nets, approaching pirate boats would be fouled and become inoperable. The downside of this is that the nets cause drag on the ship. Thus making it slower and less fuel efficient. There are also some high intensity audio devices, called Long Range Audio Devices or LRAD's, that can be used chase the pirates away. These devices focus piercing sound waves at the intruders. The downsides of this defense are both the cost and the exposure of the operator to gunfire by other boats within firing range and that are not under attack by the LRAD (See Full Story). In addition, modified sound-deadening headgear might be able to defeat these systems.

Lastly, and also the most expensive non-lethal weapon, is the ADT or Active Denial System that emits a focused high-energy wave that produces intense heat and pain on the body of the intruder. It is sort of like the outside of your body being selectively bombarded by the waves of a microwave oven. The retreat is almost immediate (See Full Story).

Unless something is done and the world gets tough with these pirates and their protectors at their home ports, this problem will only get worse. At some point in time, a cruise ship will be taken and thousands of lives could be in jeopardy. If that happens and a ransom is paid, expect things to really get out of control with piracy entering a whole, new level of terror. Is this what we really want?

The Geithner Rally?

In yesterday morning's blog, I mentioned that Obama's nomination of a Treasury chief would go a long way to ease the stock market and help slow or even reverse the 22 percent slide that we have seen over the last 12 days since the election. Late yesterday, amid another lackluster trading session, the name of New York Federal Reserve President, Timothy Geithner. was leaked. Shortly thereafter, the stock market rallied with Dow Jones Industrial Average ("Dow") reflecting a gain of 494 points. Even so, the Dow was still down 5.3 percent for the week; thus making the 3rd straight losing week since the election.

Did the Geithner leaked appointment cause the markets to rally? I don't know. Certainly, the market was ripe for a comeback; with or without the Geithner leak. Yesterday might just have been the result of the monthly expiration of stock market options and futures. These expiration days are always responsible for a lot of volatility. Normally, following a big run up in prices (as was the case on Friday), the next trading (or two) will see profit taking and the market could lose as much as a half to 2/3 of the prior day's gains. The investment community will have a whole weekend to mull over the Geithner appointment. If Monday's anticipated losses due to profit taking are tepid, or the market is even up, then I guess you could say that Obama got an all thumbs up with Geithner. Even if the markets do have sharp profit taking on Monday, any positive weekly gain for the Dow would also mean that they are a little more comfortable going forward. That, too, would prove that Friday's rally was a signal of hope and not some technical reaction to three down weeks.

I only have a limited knowledge of Geithner, but I feel that he is a "free-trader" at heart. I believe that he was on record as being against the the Lehman Brothers bailout. However, being a member of the Federal Reserve's highest echelon, he has a problem, in my mind, of being a little too academic. His views, as with Bernanke and Greenspan, are a little too top-down and hypothetical and inflation-centric for my taste. I have always blamed Greenspan's nearly two-years of unrelenting hikes of interest rates to fight some non-existent inflation, to be one of the reasons we are in the credit mess that we are in today. In many ways, Geithner's selection says that the money policy of the Obama Administration will be siding with the government's banking system; whereas, Hank Paulson, of the Bush Administration, had more of a business community leaning. Whether or not that is good or bad, I really don't know. I personally believe in having a more business oriented Treasury head.

I am still waiting for the day when Mr. Obama announces a delay, or a scrapping of his tax plans. That's the day the market will "really" rally. Until then, with Obama and the Democrats at the helm, I believe we will experience a long and a cold business environment, and the markets will keep responding with a continual downward movement.

Down 22 Percent Since The Election

While this morning, the stock market may seem to be having a positive day, it is the last hour of trading that will actually determine the final fate of the market. For days now, the market has literally imploded in the last hour of trading from its day-long upside activity.

Since the day following the election, the stock market has dropped like a rock. As of yesterday, the Dow Jones Industrial Average was down just shy of 22 percent in only 12 days. Prior to the election, the stock market had somewhat found a floor and was moving sideways. In fact, the six days prior to the election results, including trading of the election day, there was a 17% rise in the Dow Jones Industrial Average.

Nothing says more than facts and the stock market is screaming facts. The fact that the market reversed itself after Barack Obama won, speaks volumes. Also, the fact that the market has fallen so much, since that time, says even more. This market is not happy with Obama or the Democrats being in control.

Some might say that its all about the credit bailout and has nothing to do with Obama being elected. If that were true, the floor (as shown on the chart); then, the upward movement through election day; followed by a consistent downtrend since Obama won; isn't saying that at all. This bailout was probably one of the reasons the non-business savvy voters elected Obama. There was certainly a lot of voting for Obama in the punishment of the Republicans. However, the stock market is another form of an ongoing election. Trillions of dollars are being yanked from the market for it to fall like this. It is falling because their is no buying. What that says is that there is no foreseeable turnaround in the economy with the new Obama Administration. Many people around the world invest in our market and they, too, are saying that they have no faith in our economy going forward. There is nothing in the bailout plan or in the current sets of economic numbers to give them cause to put money in any company. That just shows fear that they will ultimately lose money if they invest in America. Even the traditional safe bets, like gas and electric utilities, are off the table because of the severe environmental legislation that could be imposed by the Democrats and their just-elected leader.

Only 6 weeks ago, I thought I had seen a stock formation that showed the stock market finding a bottom. I was wrong. That's why investing is an art and not even close to being a science. Obviously, my projection was wiped out by the investment community's reconsideration and reassessment of the bailout plans and the business conditions going forward. Right now, I can only say that the market looks to be in a free-fall. Where it lands is absolutely undecipherable at this juncture. Currently, the stock market is at trading levels that it weren't seen since 1999 and just a gnats-butt away from 1998 trading levels. Given everything that is going on, there is no reason to assume that we won't reach 1998 trading level. When that happens, ten years of stock trading will have been wiped out in just a little over one year.

This bull market really started in 1982; during the second full year of the Reagan Administration. It followed four horrible years under Jimmy Carter. In 1982, the low point of the market was a Dow of 770. From there, it rose to 14,198 in 2007; a near 18 fold increase in value. Now, we have nearly lost 1/2 that value from the 2007 high with the Dow currently sitting at 7500. I don't think, now, that it is unreasonable for this market to get back down into the 4000's. That is another loss of 3000 points. As horrible at that may seem, a fall to that level over the next few months would be no greater than the 3000 point loss that we saw last month.

What could stop a lot of this bleeding is some reassurances by our incoming President. I guarantee you that if he would declare, based on current economic conditions, to put off his proposed tax increases and tax cuts and just maintain the status quo, the markets might stabilize. The fact that he hasn't, implying that he won't, has the investment community running in fear. The stock market declines are also unsettling the general population. These declines and the proposals for more and more bailouts are dominating the news every night. This fact just feeds on the fears of the consumer. Any recession is generally ruled by and continued on until the psychological fears of losing a job are only abated when people's confidence is reestablished and they start buying once again. Mr. Obama needs to understand this. He needs to put a floor back on the stock market by backing off his plans. It would also help if he would announce a great choice, not just a good choice, for the Secretary of the Treasury job. Above all, his waiting on this decision is just causing more unease. Being a lame-duck with less two months left, there is not a lot that Bush can say or do right now. Mr. Obama needs to take the leadership role, now, and get out of the campaign mode. He needs to put the best interest of the country ahead of his unrealistic and, quite frankly, business killing campaign pledges. This is no time to just vote "present" as he did for so many years in the Illinois Senate.

Note: A larger view of the stock chart (above) can be viewed by clicking on it.