"Our Children and Grandchildren are not merely statistics towards which we can be indifferent" JFK

Thursday, August 25, 2011

Warren Buffett Consults with Rubber Duckie to Invest $5 bil into Bank of America

Buffett said he conjured the idea while in the bathtub
Rubber Duckie, you're so fine
And I'm lucky that you're mine

ABC News Money
By: Susanna Kim
August 25, 2011

Berkshire Hathaway, led by billionaire Warren Buffet, announced it will buy $5 billion worth of Bank of America shares in a private offering. BofA stock soared though U.S. stock markets were down Thursday morning on yet another gloomy unemployment claims report.

Buffett said he conjured the idea while in the bathtub on Tuesday. He called Brian Moynihan, chief executive officer of Bank of America, on Wednesday, he told CNBC.

Stock of Bank of America, the largest bank in the U.S., rose over 20 percent after the market's open but came down slightly later in the morning. At 10:40 AM eastern time, the stock was up 17 percent to $8.18 a share. The Dow Jones industrial average fell 129 points to 11,193.

Jobless claims climbed by 5,000 to 417,000 in the week ended Aug. 20, the Labor Department reported today. Part of the rise was due to new applications from Verizon, where workers had been striking over a contract deal.

Bank of America stock had plunged 47 percent for the year, as embattled CEO Moynihan has tried to manage its pile of bad mortgages and its exposure to the European debt crisis.

But Warren Buffett praised Monyihan and the bank in a statement.

"Bank of America is a strong, well-led company, and I called Brian to tell him I wanted to invest in it," Berkshire Hathaway chairman and chief executive officer Warren Buffett said in a press release. "I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them. Bank of America is focused on their customers and on serving them well. That's what customers want, and that's the company's strategy."  Read more about the rubber duckie investment

U.S. Becomes a Food Stamp Nation While CEO's are Paid More Than in 2007

“But I didn’t know what else to do
and I got to a point where I swallowed
my pride and decided to do
what was best for my daughter.”

Meanwhile, the typical pay package
for the head of a company in the
Standard & Poor's 500 was $9 million in 2010

Capitol Hill Blue
By Krintina Cooke
August 23, 2011

Genna Saucedo supervises cashiers at a Wal-Mart in Pico Rivera, California, but her wages aren’t enough to feed herself and her 12-year-old son.

Saucedo, who earns $9.70 an hour for about 26 hours a week and lives with her mother, is one of the many Americans who survive because of government handouts in what has rapidly become a food stamp nation.

Altogether, there are now almost 46 million people in the United States on food stamps, roughly 15 percent of the population. That’s an increase of 74 percent since 2007, just before the financial crisis and a deep recession led to mass job losses.

At the same time, the cost doubled to reach $68 billion in 2010 — more than a third of the amount the U.S. government received in corporate income tax last year — which means the program has started to attract the attention of some Republican lawmakers looking for ways to cut the nation’s budget deficit.

While there are clearly some cases of abuse by people who claim food stamps but don’t really need them, for many Americans like Saucedo there is little current alternative if they are to put food on the table while paying rent and utility bills.

“It’s kind of sad that even though I’m working that I need to have government assistance. I have asked them to please put me on full-time so I can have benefits,” said the 32-year-old.
She’s worked at Wal-Mart for nine months, and applied for food stamps as soon as her probation ended. She said plenty of her colleagues are in the same situation.

So are her customers. Bill Simon, head of Wal-Mart’s U.S. operations, told a conference call last Tuesday that the company had seen an increase in the number of shoppers relying on government assistance for food.

About forty percent of food stamp recipients are, like Saucedo, in households in which at least one member of the family earns wages. Many more could be eligible: the government estimates one in three who could be on the program are not.

“If they’re working, they often think they can’t get help. But people can’t support their families on $10, $11, $12 an hour jobs, especially when you add transport, clothes, rent.” said Carolyn McLaughlin, executive director of BronxWorks, a social services organization in New York.

The maximum amount a family of four can receive in food stamps is $668 a month. They can only be used to buy food — though not hot food — and for plants and seeds to grow food.

Presidents Bill Clinton, George W. Bush and Barack Obama all made efforts to raise awareness about the program and remove the stigma associated with it.

In 2004, paper coupons were replaced with cards similar to debit cards onto which benefits can be loaded. In 2008 they were renamed Supplemental Nutritional Assistance Program (SNAP) benefits though most people still call them food stamps.

Despite the bipartisan support for the program in the past, some of the recent political rhetoric has food stamp advocates worried.

Presidential hopeful Newt Gingrich last year derided Democrats as “the party of food stamps”. And Republican leaders in the House of Representatives propose changing the program so that the funding is through a “block grant” to the states, rather than allowing it to grow automatically when needed due to an emergency, such as a natural disaster or economic crisis. The rest of the story...

Wednesday, August 24, 2011

Homeless Pre-School Children Up 43% and yet U.S. Spends $896 mil Blowing Up Libya

The number of homeless pre-school aged children increased 43% in the last two years. The number of homeless children in public schools increased 41 percent between the 2006-7 and 2008-9 school years. Meanwhile, the U.S. has spent $896 million bombing Libya and has pledged $25 million of aid to Libya once we are done blowing them up.

August 22, 2011
ABC News' Luis Martinez (@LMartinezABC) reports: The cost of U.S. military intervention in Libya has cost American taxpayers an estimated $896 million through July 31, the Pentagon said today.

The price tag includes the amounts for daily military operations, munitions used in the operation and humanitarian assistance for the Libyan people. 

The U.S. has also promised $25 million in non-lethal aid to the Libyan Transitional National Council, half of which the Defense Department has already on MRE’s (military lingo for Meals, Ready to Eat).  

The military delivered 120,000 Halal MRE’s to Benghazi in May and a second shipment that included medical supplies, boots, tents, uniforms, and personal protective gear in June.
While Libyan leader Moammar Gadhafi appears on the way out, NATO says flight missions over Tripoli will continue, with the U.S. playing a role in helping to keep a tight window over the area that’s been in effect for weeks.

Over the past 12 days, U.S. planes have flown 391 sorties for a total of 5,316 since April 1, according to figures provided by the Defense Department. That total includes 1,210 airstrike missions over the same three and a half month period. The U.S. has also conducted 101 Predator drone strike missions in Libya.

A U.S. official credited NATO flight cover over the past many months with allowing the Libyan rebels enough time to eventually regroup and begin their pushes.  

One significant offset to the cost of U.S. involvement in the flights worth noting is the sale of military equipment to allies also involved in the cause. Pentagon officials say the sale of ammunition, replacement parts, fuel, and technical assistance to allies since March has totaled $221.9 million.

Thursday, August 18, 2011

Leprechauns, the Tooth Fairy and Stagflation (Michael Pento)

Euro Pacific Capital
by Michael Pento
August 18, 2011

Three things that Ben Bernanke doesn’t believe exist are Leprechauns, the Tooth Fairy and Stagflation. He has totally relied on specious theories like output gaps and a very high unemployment rate to keep inflation in check. What he fails to realize is that an increase in the money supply doesn’t always engender job growth or put fallow resources back into production. However, what it does always achieve is to increase the aggregate level of prices in our economy.

More evidence of our battle with stagflation was found in today’s economic data. Jobless claims for the week ending August 13th rose by 9k to 408k. Existing Home sales fell 3.5% in the month of July, while the median price decreased to $174,000 from $182,100. And the Federal Reserve Bank of Philadelphia’s general economic index plunged to minus 30.7 this month, the lowest since March 2009, from 3.2 in July.

However, the continued weakness in the real estate market and in employment figures didn’t serve to squelch the increase in prices. On the consumer level prices increased .5% in July and were up 3.6% YOY. Data released on Tuesday showed import prices were up 14% YOY and yesterday’s Producer Price Index showed inflation on the wholesale level surged 7.2% from the previous twelve months.

The message from the markets corroborates the economic data. Industrial commodities like copper have severely corrected in price and the Ten year Treasury note yield has collapsed to nearly below two percent in a sign that recession is here. Meanwhile, the monetary metal gold is up $25 today and trading at well over $1,800 an ounce.

The Fed, along with the European Central Bank (ECB), has decided that since debt levels have become so intractable they must monetize a massive quantity of government bonds. Analysts at the Royal Bank of Scotland have predicted the ECB will buy €2.5 billion worth of Spanish and Italian bonds each day, which is equivalent to €600 billion a year. And eventually the bank could wind up purchasing €850 billion ($1.2 trillion) of Spanish and Italian debt. Not to be outdone, the Fed Chairman has indicated that his $2.9 trillion balance sheet would remain intact (at a minimum) for an additional two years.

The Central Banks’ actions from the planet’s two largest economies have forced investors into the gold market. And their deliberate debasement of their currencies has led to a hallowing out of savings, productive investment and the middle class--leading to an exacerbated and prolonged economic malaise. Bernanke may ascribe to stagflation the same credibility as fairy tale creatures, but that doesn’t make it any less a reality.

Tuesday, August 16, 2011

Warren Buffett profits from bailout, is AOK w/grandkids placed in harms way and now advocates paying more taxes

Warren Buffett who profited handsomely from the U.S. Government
placing the Wall Street bank Bailout burden on our grandchildren,
now believes he and his pillagers should pay more taxes.

The $50 Billion Man

New York Times Opinion Page
August 16, 2011
Warren Buffett (not to be confused with a long table full of food...that's a ONE T...aka 1 toddler...he is perfectly okay with dumping the debt on grandkids to make his profit and then op-ed about about paying guilt taxes...pathetic)

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.       

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.       

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.       

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.       

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.       

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.       

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.       

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.       

Since 1992, the I.R.S. has compiled data from the returns of the 400 Americans reporting the largest income. In 1992, the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2 percent on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5 percent.       

The taxes I refer to here include only federal income tax, but you can be sure that any payroll tax for the 400 was inconsequential compared to income. In fact, 88 of the 400 in 2008 reported no wages at all, though every one of them reported capital gains. Some of my brethren may shun work but they all like to invest. (I can relate to that.)       

I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.       

Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances.

They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.       

Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.       

But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.       

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway....duh

Saturday, August 13, 2011

GOP Candidates Debate Fiction in Iowa

Appears all GOP candidates concur on one fact, the sun does in fact rise in the east, well, Michele Bachman abstains until morning and hopes it is not cloudy.......come on, grandpa is trying to be funny...

Hey, Bachman-Palin ticket could work...BP, just like the eco-friendly oil company...brilliant!

Michele...you need to switch places for the BP
thing to work...come on...

Capitol Hill Blue
By Calvin Woodward-Associated Press
August 12, 2011

Michele Bachman cast her opinion as a settled fact when she told the Republican presidential debate Thursday that a key element of President Barack Obama‘s health care law is unconstitutional. And Mitt Romney danced around an attempt to learn why he stayed largely mum on the epic debt limit standoff between Obama and Congress.

The first big GOP debate of the primary season brought viewers a flurry of claims and counterclaims, not all built on solid ground.

A look at some of those claims and how they compare with the facts:

BACHMANN: Spoke of “the unconstitutional individual mandate” several times, a reference to a requirement for people to carry health insurance, a central element of the 2010 federal health care law.

THE FACTS: Nothing is unconstitutional until courts declare it to be so. The constitutionality of the individual mandate has been challenged in lawsuits in a number of states, and federal judges have found in favor and against. The Supreme Court will probably have the final word. But for now, the individual mandate is ahead in the count. And the first ruling by a federal appeals court on the issue, by the 6th U.S. Court of Appeals in June, upheld the individual mandate.

TIM PAWLENTY: “To correct you, I have not questioned Congresswoman Bachmann’s headaches.”

THE FACTS: Pawlenty was hardly dismissive when news came out about Bachmann’s history of severe headaches, even if he did not go after her directly on the matter. “All of the candidates, I think, are going to have to be able to demonstrate they can do all of the job all of the time,” the former governor said when first asked about the migraines suffered by the congresswoman. “There’s no real time off in that job.”

There was no mistaking that Pawlenty was leaving open the question of whether Bachmann’s health history made her fit to serve as president. But he later tried to clarify his remark, saying he was not challenging her on that front and the flap was merely a “sideshow.” Bachmann says her symptoms are controlled with prescription medication and have not gotten in the way of her campaign or impaired her service in Congress.

The missed facts continue...

Wednesday, August 10, 2011

The Fallout From a Frozen Fed (Michael Pento)

Euro Pacific Capital
By: Michael Pento
August 10, 2011

The Federal Reserve ventured into unchartered territory yesterday when announcing that the target for the Federal Funds rate would remain near zero percent for two additional years. That will amount to be, at a minimum, four and a half years in duration. But the move is exactly the wrong strategy and does nothing to heal the structural problems of the economy.

The market rebounded sharply yesterday on the back of the promise of free money in perpetuity. However, it will soon be surprised at how little Bernanke’s largess goes towards rectifying our problems. Zero percent interest rates can’t make European debt solvent. And two more years of free money won’t automatically repair America’s severely damaged public and private sector balance sheets.

Let’s be honest, nobody was expecting the Fed to significantly tighten monetary policy in the near future anyway. Therefore, providing a definite time frame of two years does not add much additional information because it isn’t far off from what most in the investment community had been expecting--especially in light of the recent weakening economic data.

But by punishing savers for a couple more years, it will only decrease the money available to create capital goods and only encourage reckless speculation in high-risk assets and the perpetuation of rolling asset bubbles.

What is also likely to occur will be the economy to become completely addicted to artificially-produced low interest rates. Banks borrow short and lend long and are very susceptible to interest rate shocks, just as occurred during the savings and loan crisis in the 80’s and early 90’s and the credit crisis of 2008. Banks’ assets will be collecting interest on low-yielding, long-term loans that will have been prevalent in the economy for over four years. Those interest rates are now about 500 basis points below the average going back to 1970.

But interest rates must soon significantly rise either due to the overwhelming supply issuance of Treasuries in the pipeline or through the inflation that always occurs from free money and a $2.9 trillion Fed balance sheet. Once rates rise, depositors will earn more than banks’ assets collect, and insolvency will result. Not only will banks' balance sheets be under stress but also the consumer and the government are in for a massive interest rate shock coming from skyrocketing debt service payments.

Years more of free money will result in tremendous economic imbalances, a crumbling currency, rising commodity prices and a ridiculously out of control bond market bubble. And that cannot at all end well.

Tuesday, August 9, 2011

Dylan Ratigan is mad as hell, is on a roll and grandchildren give Dylan a standing ovation

Huffington Post
August 9, 2011
By Dylan Ratigan

Yesterday, on TV, I exploded. I spent two minutes giving a primal yell at our political system, demanding the extraction of our money and dignity end. It was my most heartfelt and emotional moment on television, ever.

And the emails poured in. I hit a chord, because it's something we all feel. Take a look.

With the markets in turmoil and the global financial architecture groaning under the weight of fraud and corruption, it's a good time to think about what leadership would look like. Believe it or not, we have had good leadership, purpose, integrity, and aligned interests in this country.

In 1961, President John F. Kennedy faced a dilemma -- how could he direct our intense competitive passion with the Soviet Union in a direction other than war? The answer was his call for America to beat the Soviets to the moon. Kennedy understood power; if he did not lead us towards peaceful productive competition, that same animus would have turned violent (see this key memo on the real rationale for the space race). So he took the passion and focus of our society, the technology of war and missiles, and turned it into a great mission to explore space. He gave us a shared goal.

But that's not the full story. Kennedy also demanded we use the finest scientists and engineers to design the rockets, and made sure that the path to the moon was based on the best possible solution to get there. For large rocket boosters, he was open to chemical, nuclear, liquid fuels, or any combination. He did not put a commission of astrologers in charge, and he did not put political cronies with no scientific background in charge of designing the rockets.

We had a shared goal, and we had a problem-solving process with integrity and aligned interests. Kennedy was the leader of this initiative, but Americans at that time, possibly because of a shared experience in World War II, had a shared purpose. They believed in prosperity as a goal, and they had a shared set of problem solving values to get there. They believed in education, in health and welfare, in mutual security, in dignified work and in Americans making things. The moon shot didn't just avoid war with the Soviets, it created the largest surge of American students into math and science in history.

Today, we face the same demons as decades past. We have passion, and focus, and we want to compete. What we lack is a set of shared prosperity goals, and a shared problem solving values to get there. There's no consensus, for instance, on the need to solve the problem of climate change. But even where we have some consensus, say on creating jobs, there's no integrity or aligned interests in how we're approaching the problem. It's well-known in DC among lobbying firms that every policy initiative must be wrapped in the shared goal of creating jobs. It's unclear whether anyone there has that as an actual goal, but even if they did, there's no integrity in the way they are going about creating jobs. We still trust the same corrupted economic establishment, an establishment with no ethos of the importance of problem solving. Astrologers (like S&P) are in charge of job creation.

So now we are locked in a war of ideas and mechanics in a battle for power. But power to what end? The political solutions proposed by DC today are the opposite of Kennedy's moonshot. We are taking our collective passion and focus and turning it toward manipulating power for the self-preservation of a few instead of working together towards shared goals with shared values knowing our ideas and mechanics will change as long as we try to get there.

Whether it's full employment, clean energy, building a bridge, whatever -- there's no mutual consent to a set of shared goals, integrity on how to achieve them, or aligned interests. Even where there are policy discussions on, say, how to cut our debt load, it is the opinions of discredited ratings agencies that seem to matter. So our choices are organized around austerity measures that we know will not cut debt loads. Again, it's using astrology to get to the moon.

I've realized, over time, that it isn't policy ideas we need. We need, as citizens, a shared purpose. And we need a commitment to integrity of process, and aligned interests so the incentives exist for all of us to contribute. You can talk to billionaires -- and I have -- who are scared for their children, for their country, and for the world. And if billionaires can't create the changes we need in the machine, if Congress can't, if the President can't, then we must look to ourselves.

When Kennedy called for the country to go to the moon, he said that "no single space project will be more impressive to mankind... and none will be so difficult or expensive to accomplish." The difficulty and expense were great problems to overcome, not reasons to shrink from greatness. He said we would experiment with different rocket technology, "until certain which is superior." Every engineer, politician, and bureaucrat focused on the overall goal -- not how to look like America was getting to the moon to get power and credit, but how to actually do it. And it was not his project, or even the project of the astronauts who went there. "It will not," he said, "be one man going to the moon... it will be an entire nation. For all of us must work to put him there."

This is shared purpose -- Americans paid taxes, worked on rockets, trained as astronauts, cleaned NASA buildings, or did whatever they could do -- to get each one of us to the moon using shared values to solve problems that got us closer to our objective. Later on, the space station in the 1970s, using even more advanced technology that could have been used for war and weaponry, helped us develop a new cooperative posture with the Soviet Union, cooling off the Cold War. This remarkable problem-solving value set helped create not just leadership in the space program, but the technological spinoffs we enjoy today.

This is the spirit we need today. We need to fight against the great ideological machine that lacks purpose, lacks integrity, and lacks aligned interests. The first step is to recognize our own place in it. If we believe that our problems are all due to the Tea Party, or Obama, or corporate power brokers, or liberals, then we're lacking the integrity necessary to reach any goal. The reality is, by boxing ourselves into a tribal two-party state, we are all part of the machine. And so, in order to change it, we must simply change our own minds. We must reorient our own ways of thinking, to a leadership driven model of citizenship. It isn't enough, or even necessarily important, to care about which politician is in charge. We must seek within our own lives and our own politics, food, culture, families, and schools, values. We must share a set of prosperity goals -- full employment, clean energy, patient driven health care, high-quality universal education -- and push our leaders and ourselves to achieve them.

Ultimately, peace and prosperity will not be made because we get rid of the animal instincts within us, the competitiveness, the passion, the need to argue. It will happen because we will use those instincts, as we did with the moonshot, to build a society that lets us take care of each other and solve our problems. And so we must figure out how to stop giving our consent and legitimacy to an unthinking mechanical beast that runs our lives, a beast which enslaves us to accounting mechanisms like debt ceilings instead of the shared prosperity we seek as a culture and society. We must figure out how to restore the integrity necessary to actually solve our problems and we must understand how to align all of our interests so we each have the incentives to solve them. That way, we can ensure our bridges don't fall down and our job creation initiatives actually create jobs.

I have no doubt that by rededicating ourselves, another moonshot is inevitable. That's just what happens when problem-solving people dedicate themselves to prosperity as a goal, make sure that integrity is the keystone of how they achieve it, and align their interests so it is doable.

My book Greedy Bastards coming soon. For more on jobs, see Jobs Wanted: Ending Rigged Trade = Jobs.

Must watch Dylan Ratigan..it's all about the kids and grandkids America. Grab a pitchfork for God's Sake!

The Dylan Ratigan Show
August 9, 2011

Dylan Ratigan is made as hell.

We’ve got a real problem…this is a mathematical fact. Tens of trillions of dollars are being extracted from the United States of America. Democrats aren’t doing it, republicans aren’t doing it, an entire integrated system, banking, trade and taxation, created by both parties over a period of two decades is at work on our entire country right now.

Major Thanks to Sal Arnuk of Themis Trading for the Head's Up! He too is a stand up grandchildren friendly human being. Follow Sal on Twitter @ThemisSal and visit him at Themis Trading LLC

Monday, August 8, 2011

Geithner not too bright according to Rep. Allen West

August 8, 2011
By Jennifer Epstein

Calling on Treasury Secretary Timothy Geithner to step down, tea party freshman Rep. Allen West (R-Fla.) said Monday that President Barack Obama’s top economic official just isn’t too bright — “when you open that refrigerator door, the lights don’t come on.”

Appearing Monday morning on Fox News Channel’s “Fox and Friends,” West said that when he interacted with Geithner at a House Small Business Committee hearing, it was clear the treasury secretary doesn’t get what’s happening in the economy.

“I don’t think that Timothy Geithner really has a handle on the fiscal situation here in the United States of America,” West said. Geithner, he said, “should move on.”

Democrats including Sen. John Kerry and Obama campaign strategist David Axelrod framed S&P’s action as the “tea party downgrade” over the weekend.

West blasted those characterizations, saying, “I find those comments to be absolutely the most insidious thing I ever heard. I think that what you continue to see from the left is looking for someone to blame.”

Meanwhile, a senior Democrat at the other end of the ideological spectrum focused Monday on where the U.S. government should cut spending.

A key reason why the U.S. credit rating was downgraded is because the country has spent too much money being “the military policemen of the world,” defense dove Rep. Barney Frank (D-Mass.) said on CBS’s “The Early Show.”

Calling for deep defense cuts is “going to be my mantra” in the coming months, the top Democrat on the House Financial Services Committee said.

Frank said he would like to see aid to western Europe – initiated in the aftermath of World War II – cut. He said that $200 billion could be slashed annually “without in any way endangering our security.”

Frank said he is “skeptical” that the bipartisan congressional committee will be able to come to a consensus on cuts by Thanksgiving.

But, he said, “there is one area I hope we can get together and that is on the military.” Though the military and the defense industry have long had “momentum” in Congress, the downgrade “could change our thinking.”

Saturday, August 6, 2011

66 Years Ago Today Drops Atomic Bomb (1945 Version of Shock and Awe...sad)

1945 Version of Shock and Awe
Not our Proudest Moment

August 6, 2011 (66 years later) 

On this day in 1945, at 8:16 a.m. Japanese time, an American B-29 bomber, the Enola Gay, drops the world's first atom bomb, over the city of Hiroshima. Approximately 80,000 people are killed as a direct result of the blast, and another 35,000 are injured. At least another 60,000 would be dead by the end of the year from the effects of the fallout.

U.S. President Harry S. Truman, discouraged by the Japanese response to the Potsdam Conference's demand for unconditional surrender, made the decision to use the atom bomb to end the war in order to prevent what he predicted would be a much greater loss of life were the United States to invade the Japanese mainland. And so on August 5, while a "conventional" bombing of Japan was underway, "Little Boy," (the nickname for one of two atom bombs available for use against Japan), was loaded onto Lt. Col. Paul W. Tibbets' plane on Tinian Island in the Marianas. Tibbets' B-29, named the Enola Gay after his mother, left the island at 2:45 a.m. on August 6. Five and a half hours later, "Little Boy" was dropped, exploding 1,900 feet over a hospital and unleashing the equivalent of 12,500 tons of TNT. The bomb had several inscriptions scribbled on its shell, one of which read "Greetings to the Emperor from the men of the Indianapolis" (the ship that transported the bomb to the Marianas).

There were 90,000 buildings in Hiroshima before the bomb was dropped; only 28,000 remained after the bombing. Of the city's 200 doctors before the explosion; only 20 were left alive or capable of working. There were 1,780 nurses before-only 150 remained who were able to tend to the sick and dying.

According to John Hersey's classic work Hiroshima, the Hiroshima city government had put hundreds of schoolgirls to work clearing fire lanes in the event of incendiary bomb attacks. They were out in the open when the Enola Gay dropped its load.
There were so many spontaneous fires set as a result of the bomb that a crewman of the Enola Gay stopped trying to count them. Another crewman remarked, "It's pretty terrific. What a relief it worked."

Friday, August 5, 2011

Why the Market Gods are Angry (Dylan Ratigan)

"We have a broken financial system, and capitalism
has been broken in this country for some time,"

Huffington Post
By Dylan Ratigan
August 4, 2011

For nine of the last ten days, the Dow has been dropping, concluding with a 500 point drop, our biggest sell-off in two years.

What happened?

A combination of bad economic data from Europe and the US validated the market fears that Western governments lack the integrity to solve problems and meet global economic challenges.

We are witnessing well-informed investors conclude future employment and production in the West is in jeopardy as a result of the governments' apparent inability to solve problems. They are seeking to reduce their exposure to the future production of Western countries because it does not appear that these governments can deal with expectations of sustained unemployment and diminished prosperity in a way that is constructive.

"We have a broken financial system, and capitalism has been broken in this country for some time," said Seattle-based hedge fund investor Bill Fleckenstein. "Folks need to take a step back and realize that this reaction that happened today was not a reaction to the debt ceiling. We've done that dance many times before."

Data released on Monday showed that manufacturing activity in the US economy is rapidly dropping. Today Italian bonds blew up on a risk the Italian government won't be able to pay its debts. Tomorrow the assumption is that there will be yet another tepid jobs report.

And yet, the US Congress is engaged in an absurd battle about whether air traffic controllers should be paid and our president is planning a fundraising bus tour for his birthday (By the way, happy birthday Mr. President).

Is it any wonder that global investors are skeptical of American prospects for employment and prosperity? Some people ask, why today? It's not like these problems are new. I think of it as water being heated up. It's water until it hits 212 degrees, at which point it turns to steam.

Any other country in this situation would be in trouble. However, because we print the dollar, which is the global standard (or "reserve currency"), we get a stay of execution. It's why despite all of this, our government can still borrow money cheaply. This ability to borrow is a blessing and a curse. It's a blessing because it prevents a more precipitous exit from America and buys us time to fix our problems. It's a curse because it enables us to continue on this reckless path.

Let's hope that this relative market pinprick got someone's attention at the White House, or on the tour bus. Because the market's tendency is to ratchet up the pain for those who fail to recognize its message.

"Over here, [Federal Reserve Chairman] Ben Bernanke stopped QE2 and has convinced people that he has their back. Now, they've got a gun to his head and the markets are saying 'give us more QE3 or we'll melt the markets down by Wednesday. The markets are going to force the politicians to deal with these problems... we have to admit these things and solve these things."