Obama to present a $3.8 trillion budget to Congress

The New York Times is reporting that Obama will present a $3.8 trillion budget to congress Monday, February 1, 2010. Of course the White House declined to comment on the article.

The projected deficit for fiscal year 2010 (according to the Congressional Budget Office) is $1.35 trillion. The deficit for the FY 2009 was a mere $1.42 trillion.

Obama proposed a three year spending freeze on discretionary spending commencing in 2011. As President, one needs to submit an increased budget prior to implementing an alleged spending freeze. Mr. Obama claims that this will save $20 billion in FY 2011 and $250 billion by 2020.

The White House will be working their “magic” this week as their diversionary tactics will include comparing debt and the proposed budget as a percentage of GDP. Of course when GDP figures do not neatly fit, the government simply changes the manner in which GDP is calculated.

GDP assumptions within their models have consistently missed the target by a country mile. During February, our math challenged government recalculates various previously reported 2009 data. We will once again discover that our government has repeatedly missed their targets by dozens of country miles.

Let grandpa help out our fiscally challenged elected officials; when your model is broken, you have a deficit (a.k.a. shortfall, debit, deficiency, shortage and an immoral financial burden placed upon our grandchildren).

Sunday Comics

State of the Union Viewer Reaction

Nancy Pelosi after 2008 election results

Nancy Pelosi after 2010 election results

Paul Volcker response to $1.9 trillion debt ceiling increase

4 More Years with Bernanke

Geithner's Testimony Preparation; "I reclused myself..."

Oversight Committee Prep for Geithner Testimony

Our Congressional Leaders as Game Show Contestants

House of Representatives try their best on game shows


The Senate gives the game show circuit a run


Pelosi, Reid and Frank: professional game show contestants...

Grandpa is waiting for the Timmy Geithner game show clips...stay tuned

FDIC Failure Friday Update

On 1/29/10, the FDIC closed 6 more banks bringing the 2010 total to 15 banks. The closures Friday will cost the FDIC $1.86 billion.

Of the 15 banks shuttered in 2010, three are in the state of WA and GA and MN are tied at 2 apiece.

Given the current run rate of 15 banks per month, the FDIC is on track to exceed the 140 closures in 2009.

Just another Freaky Friday for Sheila Bair and the FDIC

Timmy Geithner is joyful that Ben was re-confirmed

After the vote, Geithner said: “The Senate did the right thing. Chairman Bernanke will continue to play a vitally important role in guiding the nation’s economy”.

Let's call it a day Ben. How about Hawk "N" Dove at 5:30?

4 more years of Bernanke

The inept Senate voted to extend Bernanke’s fiscal policies for another 4 years. 30 senators actually had the courage and foresight to vote no however the “no change we can believe in” crowd cast 70 votes.

Clearly, the 80/20 rule is applicable to the Senate. 80% of the 100 senators are fundamentally inadequate, self serving, ill-informed and are utterly negligent regarding our next generation. This is classic “its all about me”. 20% of our representatives possess a vision of the future and their respective role in assuring our grandchildren of a fair opportunity. Unfortunately, 80% vote along party lines (due to the fact that they are not able to conjure up their own thought) and what is least likely to “rock the boat”.

We are “represented” by a lemming crowd of career politicians belonging to an exclusive club serving lobbyists and other special interest groups (need those campaign dollars) and who are absolutely removed from those they took an oath to represent. You are nothing more than a group of carnies hawking your wares at the fair. The midway is rigged and so is fair-minded representation.

These pampered and spoiled “representatives” are a disgrace to those in history that actually had gumption to do what was right for the country and make necessary sacrifices to ensure that the next generation had a favorable opportunity to succeed.

Ben Bernanke (5/17/07): “The sub prime mess is grave but largely contained. Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the sub prime sector on the broader housing market will likely be limited”.

4 MORE YEARS...DUH!!!

Take a look in the eyes of the next generation and tell this grandpa how you could possibly add another $1.9 trillion to an already bloated debt ceiling and give Bernanke another 4 years all in the same day!

Congress approves raising debt ceiling by $1.9 billion ($14.29 trillion)

As expected, the Senate fiscal irresponsibility continues. The U.S. debt ceiling is now a mind blowing $14.29 trillion.

Shock of shocks, every Democratic Senator cast a Yea vote. I am truly agnostic regarding party lines as both major parties express total disregard for future generations. It is yet another sad commentary on our political system that not 1 member of the Democratic Party opted out of the lemming vote!

The House still needs to vote prior to the bill arriving on Obama’s desk. Obama’s spending freeze on discretionary spending commences in 2011 and during the interim, our elected officials just keep piling it on!

Truly Sad

My apologies to all grandchildren for the senseless

financial burden placed on your generation.

Jon Stewart on the bankers

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Obama Takes On Bankers
www.thedailyshow.com
Daily Show Full Episodes Political Humor Health Care Crisis

Timmy Geithner on the hot seat

Geithner is going the “I had nothing to do with the day-to-day operations of the Federal Reserve Bank of New York (FRBNY) once he was nominated for Treasury Secretary. How convenient Tim. Geithner also stated that he personally had no role in making decisions “regarding what to disclose about the specific financial terms” of the November 2008 AIG rescue. Now Timmy states that he wishes he had been more informed about disclosure deliberations regarding AIG.

Tim mustered up his infinite economic knowledge and substantial depth of private industry experience (oops, only Kissinger and Associates) and spews, “Thousands of more factories would have closed their doors, millions more Americans would have lost their jobs as a result of letting AIG collapse”. Your forecasting credibility is par with “jobs saved or created”.

We are not embracing your “I removed myself” rhetoric Tim. You might be one of People Magazine’s 50 most beautiful people however your level of competence and professionalism is pathetic.

You sir, are not an asset to future generations and your “services” are no longer required.

November Factory Orders and Durable Goods Revised Down

"The Census Bureau identified a processing error that occurred when revising historic seasonally adjusted data for the November (data month) releases," Census said in a notice posted on its website. "The data have been corrected."
Factory Orders revised to +0.6% from +1.1%
Durable Goods revised to -0.7% from +0.2%

These are substantial revisions. Not only is our government inept and out of control regarding budgetary issues, they are fundamentally inept in calculating data.

Suggested Reading for Census Bureau

This is what grandpa is reading

Senate Rejects Obama’s Deficit Task Force

The Senate rejected Obama’s plan to establish a bipartisan task force to recommend ways to reduce the federal deficit. 53 voted in favor however 46 voted no and 60 votes were needed for passage.

Chief sponsors of the bill (Kent Conrad and Judd Gregg) stated that congress has proven it is incapable of making the difficult decisions needed to reduce the deficit.

Senate Finance Committee Chairman Max Baucus of Montana stated, “There is not doubt we have to get our fiscal house in order, the question is what’s the best way to do it”? JUST QUIT SPENDING MAX! Since 1974, you have held the positions of representative and senator and 36 years later you have not yet figured the best was to do it!

One suggestion Max, vote no on raising the debt ceiling by $1.9 trillion. You and your fiscally irresponsible club members owe it to our children and grandchildren.

AIG Bailout National Security Status

Just when you think Tim Geithner couldn’t slither and lower. Bailing out AIG was a matter of national security! Does the U.S. have a special alert color for AIG?

Reported by Reuters:
U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.

The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the emails.

The emails from early last year reveal that officials at the New York Fed were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that "special security procedures" would be used to handle the document.

The SEC, according to an email sent by a New York Fed lawyer on January 13, 2009, agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG's confidentiality request.

The SEC had also agreed that if it determined the document should not be made public, it would be stored "in a special area where national security related files are kept," the lawyer wrote.

One day the grandkids will read the amended classics reflecting the Geithner-Schapiro conspiracy.

The Old Fun with Tim and Mary

Look Mary.

Look, Look

See Pelosi

See Mary Run

See Tim run

Run, run, run

Jump congress

Jump, jump, jump

Oh, congress

Sunday Comics

"I won George, I'm now the Speaker"

"Brutal, Copenhagen was a nada, my ratings are tanking,

 Scott Brown wins, health reform is lukewarm

and now the Supreme Court conniving 5"

Ford Focus, Best Green Car of 2010 Detroit Car Show

Feinberg wants AIG to

reduce retention awards

                                               AIG, "but $195 mil due in March"

Senators predict Bernanke confirmation

Jim Cramer's Market Rally post Scott Brown election

Here's a little song I wrote

You might want to sing it note for note

Don't worry, be happy...

Scott Brown Victory Dance

"It's all over the internet, 70 phone calls in 14 hours

including your buddies at JP Morgan and Goldman Sachs"?

 

SEC could adopt new short sale rule as early as February

Barney Frank couldn’t save the market mid-week, now its Mary Schapiro’s turn.

The SEC regulation would require short sale trades be executed above the best existing bid in the market when shares fall 10% in a day.

The “premise” of the SEC is that forcing short sellers to wait for the stock price to rise may prevent them from inundating the market with sell orders and causing losses in the stock to intensify.

The Dow Jones Industrial Average rockets 59% 3,874 points of light) from the March 9th closing through 12/31/2009. From January 1, 2010 through 1/19/2010, the Dow tacked on an additional 304 points. Where were Mary Schapiro and her SEC court jesters during this meteoric rise?

During the prior 3 trading days, the poor Dow Jones Industrial Average lost 552 points and is now negative YTD by 248 points (2.4%).

What superb timing of the SEC to publicly reinforce their illusion that the equity market drops are the result of short sellers and then implement a new rule on the heels of a few negative days in the market! Dear SEC; have you given any thought to the fact that maybe the equity market drops for simple reasons including “fundamentals do matter”, liquidity afforded by the manipulative HFT traders is a myth and lofty valuations like home prices correct?

Mary, how are you doing on the issues of high frequency trading, front running client orders, dark pools and flash trading?

In Cramer We Trust, Scott Brown Victory equals Market Rally (oops)

Tuesday, January 19th, Cramer boasted how the equity market would rally after a Scott Brown victory in Massachusetts. RESULT: Dow ended the week down 552 points since Brown’s victory. “Brown better win or else there’s no tomorrow for this rally”.

BIG OOPS JIM (as usual)

"Let's see how I can spin this..."

Ride This Cramer

Bank Failure Friday and Bair versus Cramer on CRE

The FDIC shut down 5 more banks Friday bringing the 2010 failures to nine. The FDIC estimates the total hit to their Deposit Insurance Fund at $531.7 million.

FDIC Chairperson Sheila Bair spoke before the Commercial Mortgage Securities Association conference this past Wednesday and stated that troubles in the commercial real estate sector will increasingly be a driver of bank failures this year. She also noted that even income-producing properties have seen a decline in credit performance.

Sheila stressed to the conference attendees that “losses need to be recognized”. She said banks should try to modify troubled commercial real estate (CRE) loans, but must recognize losses if such a workout does not maximize value.

AND NOW, THE HOPE WORD!
"Of course, the ultimate scale of losses in CRE loan portfolios depends on the pace of recovery in the U.S. economy and financial markets," Bair said. "On this point we remain hopeful."

Bair versus Cramer regarding CRE outlook
 
Jim Cramer’s Blog 12/29/09:
The biggest canard for 2010 will be the “collapse in commercial real estate”. “There will be no collapse. In fact we will look back at 2009 and recognize it as the year the industry consolidated and the strong got stronger and will be ready to pick off any properties of the weak”.


Cramer is a self proclaimed expert on commercial real estate because?????

Greenspan Supports Bernanke

"Buffet would vote for him twice, big deal, count this Warren..."

Barney Frank Wants to Abolish Fannie and Freddie

Barney, what do you see?






Reported by Bloomberg:
At a hearing in Washington D.C. today Barney Frank stated, “The committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance”. Fannie Mae and Freddie Mac, the largest U.S. mortgage- finance companies, have received $110.6 billion in taxpayer- funded aid since regulators took over the government-sponsored enterprises in September 2008.

Vanity Fair has an Excellent Article in their 9/15/2009 issue, 100 to Blame: Barney Frank, Richard Fuld and more
As far back as 1991, Frank was pushing Fannie Mae to break its rules, lower its standards, and buy risky loans. As The Boston Globe reported in November 1992, he helped to convince Fannie Mae to make “substantial concessions” on its rules regarding multiple-family-home mortgages, despite data from Fannie itself showing that the “default rate on mortgages on two-family homes is twice that of single-family homes, and the rate for three-deckers is five times the rate for single-family dwellings.”

On September 10, 2003, the House Committee on Financial Services met to hear the Treasury Department’s plea for a new, tougher regulator to oversee Fannie Mae and Freddie Mac. In Frank’s opening statement to the committee, he said:

I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government-sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.Link to complete article:

In June 2005, virtually every major newspaper in America carried stories warning about the housing bubble. It was the subject of 15 articles in The New York Times alone. Yet here is how Barney Frank saw the world on June 27, when he delivered a speech on the House floor in favor of a resolution celebrating National Homeownership Month:

This is a very important resolution, particularly at this time, because we have, I think, an excessive degree of concern right now about home ownership and its role in the economy.

Obviously, speculation is never a good thing. But those who argue that housing prices are now at the point of a bubble seem to be missing a very important point. Unlike previous examples, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity, home ownership, homes, where there is not the degree of leverage that we have seen elsewhere.

This is not the dot-com situation. We had problems with people having invested in business plans for which there was no reality and people building fiber-optic cable for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level, but you will not see the collapse that you see when people talk about a bubble.

So those of us on our committee in particular will continue to push for home ownership.



http://www.vanityfair.com/online/politics/2009/09/100-to-blame-41.html

Barney Frank Attempts to Save the Equity Market

CNBC strategically schedules an appearance by Barney Frank as the equity market is close to retesting the lows of the day. One can only imagine how many times CNBC will re-air the interview clip before the market close.

Apparently Barney Frank is to researching as Evelyn Wood was to speed reading. Obama announces the Bank Plan around 10:45 am and my 1:25 pm Barney completed his exhaustive research on banking and proprietary trading in less than 3 hours.

He supports the President’s plan however the plan should be implemented slowly (i.e. no less than 3 to 5 years). Barney states, “To have all these sales at the same time would be a fire sale and I can’t support that”. In less than 180 minutes, not only has Barney become an expert on proprietary trading, he also has a vision of the outcome.

With the November elections on the horizon, one wonders the volume of calls he received from his banking buddies.

"Go ahead Blankfein, I have Dimon in a 3-way and Mack is already here"

It is official, Senate entertaining a $1.9 trillion increase to debt ceiling

The Senate is entertaining a proposed amendment to increase the debt ceiling by $1.9 trillion ($14.29 trillion total).

Valentine’s Day is just around the corner and I here is an appropriate gift for each Senator. Place your order early and ship it “next day” as it is imperative they try it out prior to dumping another $2 trillion on our children and grandchildren.

No Vote on Bernanke this week

Poor Ben, the Senate will not vote this week on his re-confirmation as Chairman of the Federal Reserve. Ben’s term expires 1/31/2010 however it appears he will remain “Helicopter Ben” for another 4 years.

Warren Buffet, during a CNBC interview stated if he could, he would vote for Bernanke twice. Given Warren’s return on his financial industry investments during the taxpayer bailout, I am amazed he limited himself to only two votes.

Don’t fret Ben; the inept members of the senate embrace your level of transparency and appreciate your “hand picked” AIG files offered to the Government Accounting Office.

"Agreed, Ben needs to be patient as we have until the 31st of January; now, imagine when you were younger and you too got the call from Playgirl. Scott Brown is a kick".

"I've got your back Ben and if anyone asks, I was just admiring your Kindle"

Chris Dodd states that Broad Bank Reform Bill is Moving Forward

We're talking and obviously my hope is that in the next few weeks we'll be able to move forward and have votes in the committee," said Senate Banking Committee Chairman Christopher Dodd, to reporters. (MarketWatch)

Reported by MarketWatch:
A broad bank reform bill responding to the financial systems near collapse in 2008 is moving forward, with votes expected on it in a key committee expected by spring, two key senators said Wednesday.

Dodd said Wednesday that no agreement has been made about the consumer protection agency. "We've had long conversations about a bill that includes many pieces and parts," Dodd said. "Nothing has been agreed to accept a lot of conversations about various aspects about a very complicated set of issues so the idea that something has already been decided about any aspect of this bill is completely false."

Let me make an attempt to wrap my arms around this:
1. Chris Dodd is still using the “hope” word
2. This “broad reform bill” is expected to be voted on in a key committee
    in spring
3. No agreement on the Consumer Protection Agency
4. Very complicated set of issues
5. Long conversations, many pieces and parts and nothing agreed to

Okay, one more attempt:
Banks have been bailed out, achieved record profits as an upshot of numerous bailouts, paid back TARP funds and rewarded themselves with record bonuses. It is January 2010 and Chris Dodd notes the “bill” is moving forward, remains hopeful, expects a committee vote in spring, noted there is no agreement however, they have long conversations on a very complicated set of issues.

By the time you and your self-serving peers accomplish anything Mr. Dodd, my grandchildren will be old enough to vote and they have been prepped well.

Democrats seeking a $1.9 trillion increase in debt ceiling

The Dow Jones Newswires are reporting that several congressional aides stated that senate democrats are seeking an increase the government debt ceiling by $1.9 trillion. This would bring the U.S. Government debt ceiling to $14.29 trillion.

More on this spiraling and out of control scenario to follow as details unravel. During the interim, locate your representatives’ email addresses and phone numbers and prepare to take action.

Vigilant Grandpa

Obama is creating a panel to study the deficit

President Obama plans to create a commission to study the deficit and make recommendations on measures to reduce the federal deficit. This “commission” would consist of 18 people and 14 of the 18 would need to agree on specific recommendations prior to a congressional presentation.

Yet another commission/committee to review a 4th grader word problem. What’s to study? The government continually spends more than it receives.

You chose to captain this ship, so quite whining about what you inherited, as a whiny captain triggers a mutiny. Hand a bucket to each member of congress and get them bailing before this ship sinks.

In lieu of another 18 person circus, simply call David Walker as he has been pounding on the table concerning this country’s fiscal irresponsibility for 7 years. Regrettably for us citizens, neither you nor your predecessors chose to listen and turned a deaf ear.

As President, Mr. Obama it is time for you to buck up and enlighten this math challenged congress that any bill hitting your desk that does not reduce the deficit will not be signed.

 

Editorial on High Frequency Trading/Front Running of the equity market

The equity market has evolved into a gamer’s paradise. Over 50% of the anemic daily volume is comprised of algorithmic based trading. The computers trade amongst themselves and data that flows over the wires is irrelevant to the direction of the market. The programs control the market.

There was a time (not that long ago) when economic reports, stories of political unrest and earnings results directly impacted the course of the market. This is no longer the case as the market has been inoculated against all that might invade its system. The gamers simply crack open a Red Bull, grab a handful of Cheetos and check their programming code for the next day of trading.

The present “market” environment is great for the bailed out institutions given the fact that they are now “banks” with access to the Federal Reserve window for bags of very inexpensive money dump it on the trading desks and we are off to the races. The “banks” are earning huge sums via their trading desk versus the laborious and nominal margins associated with lending money, as that is “old school”.

This environment is also most conducive to the journalism majors turned financial pundits at CNBC. They have no programming challenges as the market (like home values) will go up forever so they can confidently parade around bulls as though they were televising a cattle auction.

One day (assuming the SEC leaves the cave after years of hibernation) the Red Bull/Cheetos gang will move on and the market might actually be deemed transparent and played on a level field. Be very careful of this world investors, when the formula experiences a glitch, the high frequency carnival leaves town and all that remains is an ominous flushing sound. During the interim, the machine wants you to feel good when you open that statement however it is simply an interim illusion.

Old School Equity Market

New Order of High Frequency/Front Running Trading

Tough times in Gotham City, New York grappling with $7.4 billion deficit

CA is not alone when it comes to staggering deficit levels and the NJ governor was also in the news today stating that “we have the biggest budget deficit per person of any state in the union”.

David Patterson stated today, “Since the day I became governor, I have warned that New York is facing an inevitable fiscal reckoning”. He also noted, “There are no easy answers and we cannot keep spending money that we do not have”.

Even with his warnings, New York’s budget would grow over the current year by $787 million. Gov. Paterson is seeking a $1 billion increase in taxes and fees. He is also considering a “sin” tax on soda and cigarettes. A pack of smokes currently sets you back $10.00.

Patterson is also proposing $5.5 billion in “recurring” spending cuts. Bottom line; Gotham is not experiencing fictional financial woes.

Congressional representatives: take note of Governor Paterson’s letter attached to his budget; “The mistakes of the past-squandering surpluses, papering over deficits, relying on irresponsible fiscal gimmicks to finance unsustainable increases-have lead us to a financial breaking point”.

Good Luck Batman and you require more than Robin.

Bernanke to kick back the sheets on the AIG Bailout

Ben sends a letter to the Comptroller of the Government Accounting Office (GAO) noting that the Federal Reserve would provide the GAO with all documents and personnel to conduct a review into “all aspects” of the aid afforded AIG.

Noted in Ben’s letter; "In this spirit, to afford the public the most complete possible understanding of our decisions and actions in this matter, and to provide a comprehensive response to questions that have been raised by members of Congress, the Federal Reserve would welcome a full review by GAO of all aspects of our involvement in the extension of credit to AIG”.

This is a Bernanke “limited offer”. As long as the sheets are kicked back, let’s strip the bed and determine Ben’s role during the Lehman Bankruptcy, Fannie Mae, Freddie Mac and the multitude of other bank bailouts throughout the prior 18 months?

What precisely is the agenda of Bernanke using AIG as a congressional pacifier? Maybe he believes AIG is the magic token essential for his re-confirmation hearing.

Don't Cry for me Argentina

 

Jon Stewart and David Walker

David Walker is the ex-comptroller of the Government Accounting Office (GAO) and he has been speaking out on the fiscal wreck path we are on since 2003. As David points out, "there is no party of fiscal responsibility" and "we have a dysfunctional democracy.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
David Walker
www.thedailyshow.com
Daily Show Full Episodes Political Humor Health Care Crisis

Jon Stewart, "Kennedy legacy goes down to a naked guy who owns a truck"?

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Mass Backwards
www.thedailyshow.com
Daily Show Full Episodes Political Humor Health Care Crisis

Government debt ceiling needs to be raised yet again

Our country’s legal debt limit necessitates another increase. On Christmas Eve 2009, congress bestowed upon us a $290 billion lump of coal as they raised the debt ceiling to $12.394 trillion.

The senate is scheduled to begin debating this matter Wednesday, January 20th. Clearly congress desires a high enough increase so they will not have to address this again until after November elections. Technically, congress must raise the debt ceiling by mid-February in order for the U.S. Government to continue borrowing money and avoid default as piercing the ceiling is very near.

Senators will vote on a pay-as-you-go measure this week. This measure would require mandatory spending increases to be offset with spending cuts elsewhere or tax hikes. The probability of spending cuts bearing in mind the congressional buffoons is virtually zero. The U.S. debt ceiling has more than doubled since 2000 and is $4.5 trillion greater than a mere 5 years ago.

Our current debt ceiling compared to other countries GDP (value of all goods and services produced) is staggering. Employing 2008 International Monetary Fund figures, our debt ceiling is 2.5 times the GDP of Japan, 4.5 times Great Britain’s GDP and 8.25 times Canada’s GDP.

The exceedingly manipulated U.S. GDP figure for 2008 was $14.4 trillion. We are on the cusp of a debt ceiling exceeding the value of all goods and serviced produced in this country.

It is imperative that we collectively demand fiscal responsibility of our elected officials. The continued fiscal irresponsibility path is leading this country over a cliff while the burden placed on future generations is contemptible.

An Economic plan based on hope? Maybe an orchestrated hope only campaign for 2010?

Since the start of the year, I observed the repetitive use of the word “hope” within articles and headlines regarding the economy. Via a Google search, the phrase “economic plan hope U.S” produced 396,000,000 hits during the period 1/1/2010 through 1/17/2010. That truly reflects a lot of hope during a 17 day period. The total number of hits using the same search phrase for all of 2009 produced 592,000,000 hits.

The United States economic plan is hitting on a lot more hope in 2010 considering we have achieved 67% of 2009 “hope hits” in the first 17 days of the year.

By definition, hope includes believe, expect, rely, anticipate, to expect and desire, to wish for something with expectation of its fulfillment and of course, wish and dream.

Hoping for nice weather, an early spring, someone changing their mind and your team winning the Super Bowl suggest numerous conditions warranting hope are clearly out of one’s control. Grandpa is not seeking to initiate an emotional debate on the virtues of “hope”, as one could surely create sound arguments for suitable usage of hope, hopeful, hoping, hopefully and hoped for.

Hoping banks will lend, hoping employers will hire, hopeful that healthcare/financial reform will be passed and hoped for better home modification numbers are not the same as hoping it does not rain during the family barbeque. Our elected officials act as though they still expect a visit from the tooth fairy.

When Nancy Pelosi was asked this past Thursday about the status of the healthcare bill, she stated that, “reaching a deal by Friday would be our hope”. On her return trip to Washington D.C. on Monday she commented, “I am returning to Washington with a message of hope about the future of the U.S. auto industry”.

11/6/2009, Christina Romer commented about the employment report. “Today’s employment report contains both signals of hope for recovery and painful evidence of continued labor market weakness”.

4/14/2009: Ben Bernanke “warned that any hope for a lasting recovery hinges on the government's success in stabilizing shaky financial markets and getting credit to flow more freely again”.

11/16/09: Ben Bernake speech at the Economic Club of NY.
“However, some important headwinds--in particular, constrained bank lending and a weak job market--likely will prevent the expansion from being as robust as we would hope”.

9/14/2005, Joe Biden in a Washington Post Editorial addressing the situation in Iraq: “But hope and stubbornness do not constitute a strategy”.

Benjamin Franklin: “He that lives on hope will die fasting”.

Enough of the happy, hoping talk from Washington, ACTION is required and your clock is ticking. For many of you, November is just around the corner!

Tim Geithner is confident

Tim Geithner in an interview with CNBC said he’s confident the government too the appropriate steps in rescuing American International Group, though the need to do so was “deeply offensive to him”.

Federal Reserve Balance Sheet Hits Record

The Federal Reserve Balance Sheet Hits a Record $2.274 trillion for the week ending January 13th. The prior week balance sheet checked in at $2.216 trillion. Ben Bernanke added another $58 billion to the balance sheet this past week.

Helicopter Ben is basically the lone purchaser of mortgage backed securities in town. The government’s objective is to keep interest rates artificially low in an attempt to stimulate home buying and mortgage refinancing. We can only imagine the garbage the Federal Reserve deems an “asset” as their transparency window remains foggy.

Bernanke states the prior extended period of low interest rates was not the cause of the housing bubble. He should know; he does have a PhD. This is the same bureaucrat (with no experience out of educational institutions) that did not recognize the tsunami of financial carnage even while his waders were taking in water.

You and the balance sheet are out of control. Ben and the Board of Governors continue to spew that a plan is in place enabling an orderly unwind of this swelling balance sheet. Ben, Ben, Ben, do you really suppose we are that naïve to believe that you are simply going to reposition a 154.2 mile high stack of $1,000 bills and no one will be subjected to any consequence?

Let’s convert your stack to $10 bills as I for one never placed a $1,000 bill in my wallet. Your current balance sheet now represents a stack roughly 15,400 miles high. Laid on its side, the length of $10 bills is the equivalent of a round trip from Omaha, NE to Sydney, Australia.

I urge you and your Board of Governors to have grandchildren present at your next strategy meeting and for once, incorporate their needs while drafting policy.

You desire re-confirmation the end of the month? Invite the kids to your January 26th and 27th FOMC meeting.

Sunday Comics Part Deux

"As always, should you or any of your IM force be caught or killed, the Secretary will disavow any knowledge of your actions"

"Okay Mr. Fannie and Mr. Freddie, one more time, $6 million per is my final offer"

Marian, GREAT IDEA, "taketh from ye middle class and giveth to ye old Wall Street in Nottingham would truly bring about Merry Men". "Little John and I return for you in a fortnight".

When I was insolent, I was placed in a burlap bag and beaten

 with reeds-pretty standard, really.