More and more, we discover our leaders--politicians, CEOs and some clergy--disappoint us. They disappoint us in the United States but also around the world.
Because of these people, our institutions--government, financial and religious institutions--insult decent, working (and non-working) people's sense of ethics and morality.
Who put these people in charge and why are they still there?
The guy in charge of "checking off" the Lesbian bondage fiasco for the Republican National Committee is still there and making money; Jaime Dimon is still CEO and still making millions; the Pope makes a horrible PR move, priests still have to remain celibate and a pedophile Cardinal runs free; Alan Greenspan still gets attention and people actually still care about his opinions. Why?
One of the few times I was on a panel several years ago during the "halcyon" days of housing, I said that whoever had the idea of making Fannie Mae and Freddie Mac public AND private institutions created an inherent conflict of interest, which just doesn't work. Daniel Mudd finally admitted to that the other day. If they only would have listened to me a few years ago.
When I asked Franklin Raines if Fannie Mae is doing anything to put financial literacy programs into secondary education, he said they were working on it. Sure. And, Angelo Mozilo, CEO of Countrywide, shrugged the idea off saying students "would probably cut class anyway."
But that's besides the point.
It's pretty obvious by now that Geithner-Bernanke-Summers will save the too-big-to-fail bank model if it means destroying the U.S. and any certainty-in-value there may be for currency, housing and commercial real estate. Right now, it looks like they'll succeed in their never-ending pursuit of a credit-driven, material wealth, Reaganomics society.
Regulatory reform will likely turn into 2000 pages of laws that TBTF bank lawyers can figure out ways to get around. Rather than bring back Glass-Steagall, we have to sit through months of stupid regulatory reform legislation, created by a paid-for Congressman, owned and/or rented by bank lobbyists. (That's Sen. Christopher Dodd, D-Conn. for those watching).
Speaking of conflict of interests, Greenspan said he does not want to see investors making dangerous bets with consumer deposits, but he doesn't see why we need to bring back Glass-Steagall. It's also amazing the "selective memory" that man has. Why was I and a million other people able to see that Interest Only mortgages and No Interest No Job or Asset loans would be a disaster for non-sophisticated homebuyers and destroy the mortgage market.
Greenspan said nobody could see it? Either we had a total imbecile at the Federal Reserve (and Andrea Mitchell married a total imbecile) or when times are good, nobody wants to stop the music.
Thinking of "when times are good, nobody wants to stop the music," I understand that the U.S. will be contributing $100 billion to a $500 billion International Monetary Fund that will, in turn, bail out Greece and other European countries (when they end up needing bailouts). It's just another $100 billion--a small fraction of the $3 trillion to $4 trillion in debt we've built up.
This is why I said the catastrophic economic collapse will happen in 12 to 18 months...it takes a long time to destroy the country if you use all the tools available to do it. Besides, it took three years after 1929 for the second collapse. And, please, quit this "Great Recession" stuff. It's the "Great Depression II" and history will certainly show that.
So, will there be any community or regional banks after all is said and done? Well, when the smoke clears, there will be the large too-big-to-fail banks, the very small community banks and a few credit unions added to the too-big-to-fail Navy Federal Credit Union.
Not sure about the FDIC and where they plan to get the money to close all these banks. What a joke. Meanwhile, we're more in debt than Greece will ever be and nobody will dare cut our ratings. Plus, Government Sachs will keep buying up bonds and feeding the stock market until it shorts everything, everywhere and all hell breaks loose.
And, it amazes me when I watch McNeill-Lehrer and these "experts" can't say why mortgage modification programs don't work. It's pretty simple--banks have to answer to residential mortgage-backed securities bondholders. Those are contracts that will cost those big banks lots of money if they break them because the lawsuits will flood in. They probably already have. If they break those contracts, then they won't be too big to fail. Their hands are tied.
I've said it before and I'll say it again. There needs to be "investor confidence" to bring liquidity back into the real estate market. Investor confidence comes from value certainty. Value certainty can only be attained through market corrections. Market corrections cannot happen while the U.S. Federal Government bails out homeowners who will not be able to pay off their mortgages and insolvent financial institutions.
The world will not have investor certainty if the U.S. Federal Government does the same thing with other countries either--like Greece. Because, if you haven't looked lately, the U.S. is Greece.
Tuesday, April 13, 2010
Friday, March 26, 2010
Spot On Blog
I'm at a point that I read enough good financial bloggers that not all of them give me an "on the mark" moment. However, I did come across one this morning by Ken Denninger in his "Market Ticker" blog that simply hits spot on the problem we faces as a nation.
Once you read it, you'll realize the EXACT SITUATION we face and that this economic crisis was not handled properly for political reasons.
http://market-ticker.denninger.net/archives/2125-Housing-Obama-Still-Has-Not-Grown-Up.html
Sorry, but when there's an ECONOMIC CRISIS in the United States and you need to find the best solution for the people of the United States, best thing to do is the right thing to get the country functioning with a LONG-TERM, SUSTAINABLE solution. Not a broken legacy system with patches and patches adding up to trillions of dollars. That's what banks do with their computer systems and someday, those chickens will come home to roost as well.
In other words, think of the needs of the many, not the few...Think of the FUTURE.
Once you read it, you'll realize the EXACT SITUATION we face and that this economic crisis was not handled properly for political reasons.
http://market-ticker.denninger.net/archives/2125-Housing-Obama-Still-Has-Not-Grown-Up.html
Sorry, but when there's an ECONOMIC CRISIS in the United States and you need to find the best solution for the people of the United States, best thing to do is the right thing to get the country functioning with a LONG-TERM, SUSTAINABLE solution. Not a broken legacy system with patches and patches adding up to trillions of dollars. That's what banks do with their computer systems and someday, those chickens will come home to roost as well.
In other words, think of the needs of the many, not the few...Think of the FUTURE.
Monday, March 15, 2010
Moody's Cautions U.S. Ratings
As I mentioned in the previous post, once a ratings agency decides to cut the U.S. sovereign debt rating, it's goodnight to the U.S. life support system and perhaps the dollar itself.
In an article from earlier this morning from the Financial Times, Tracy Alloway writes "Moody’s warns on US finances."
Credit rating agency, Moody’s Investor Service, will fire a warning shot at the US on Monday, saying that unless the country gets public finances into better shape than the Obama administration projects there would be “downward pressure” on its triple A credit rating.
Examining the administration’s outlook for the federal budget deficit, the agency said: “If such a trajectory were to materialise, there would at some point be downward pressure on the triple A rating of the federal government.”
http://ftalphaville.ft.com/thecut/2010/03/15/174686/moodys-warns-on-us-finances/
Is Moody's trying to say they don't want healthcare to pass?
Actually, Moody's is kind of equivalent to a bug politically because they know once they downgrade the rating, they're basically destroying themselves. Believe me, we'll know the rating has been downgraded far before the actual event takes place.
In an article from earlier this morning from the Financial Times, Tracy Alloway writes "Moody’s warns on US finances."
Credit rating agency, Moody’s Investor Service, will fire a warning shot at the US on Monday, saying that unless the country gets public finances into better shape than the Obama administration projects there would be “downward pressure” on its triple A credit rating.
Examining the administration’s outlook for the federal budget deficit, the agency said: “If such a trajectory were to materialise, there would at some point be downward pressure on the triple A rating of the federal government.”
http://ftalphaville.ft.com/thecut/2010/03/15/174686/moodys-warns-on-us-finances/
Is Moody's trying to say they don't want healthcare to pass?
Actually, Moody's is kind of equivalent to a bug politically because they know once they downgrade the rating, they're basically destroying themselves. Believe me, we'll know the rating has been downgraded far before the actual event takes place.
Sunday, March 14, 2010
Coffee, Tea or Me--the Individual
There is growing excitement about the coffee party--a party that stands for taking back the United States government for the people and away from special interests and corporations. It is another add-on to what I believe will be a cycle of anti-establishment behavior in the country in the years to come (only, this time, maybe we can do without the hippie, smug idealism).
I haven't been to a coffee or tea party, but I was at a birthday party last night, and we discussed politics, history and current events--I know, I'm old and this is my kind of party.
Someone said that nothing ever comes out of an anti-establishment movement, but I tend to disagree with that. The 1960's brought change in the form of civil rights and greater freedoms for race, gender and sexuality--only to see repression return to the mainstream when the baby boomers got older. Of course, the baby boomers are the largest demographic group in the U.S. so anything mainstream for them is always the way to go, whether marching on Washington or making as much money and buying as many things as humanly possible.
Only, the baby boomers forgot to take into account that they are also susceptible to human nature, and baby-boomer politicians sold themselves out because not only did they have an arrogance about them that their needs come before all others, but a "la-la-la-live for today" attitude--which still resembles mainstream in this country.
As much as I hated Ronald Reagan for increasing U.S. debt to increase spending, consumer spending increasing by excessive-minded baby-boomers, the phrase "Just Say No" to make everything all right with our children and selling arms to the enemy, the most irritating thing was a false reality that our country was prosperous when it was heading into a recession and the first bubble-to-bust in what would become a series of bubble bursts every decade.
I thought would this mania would end in 1992 when Bill Clinton came to office.
But, with a Republican Congress entering in 1994, Clinton simply became a Republican in Democrat's clothing and it was under his administration that Glass-Steagall was repealed in 1999, which allowed banks and investment banks to merge as one entity.
This Great Depression II might have happened anyway if Glass-Steagall was not repealed (Glass-Steagall was made into law after The Great Depression to basically prevent overinvestment in banking products, such as mortgages), but I think Glass-Steagall's repeal set the stage for 2008's economic credit crisis. So, that was Clinton's fault because it was under his watch--whether he was "forced" into it with the threat of impeachment or not, it was on his watch.
Of course, Larry "I won't listen to anything about derivatives" Summers was under Clinton and is back NOW under the Obama Administration along with other Wall Street affiliates Tim Geithner and Ben Bernanke.
So, despite, GW Bush's massive overspending and deregulation of...well...every corporation and industry around the world, that same corporate philosophy of "greed is good" and let's get every consumer to spend until they have nothing left and a huge bubble pops, is still around.
Which leads me to a post on The Coffee Party Website. Call it a post or a rant, but here it is:
In the end, when it comes to corporate greed, the best way to destroy it is to not feed into it. The unemployed people have no choice on how they spend; the employed but fiscally conservative will only live within their means and start saving--which many are doing; and the foolish will take on more debt and spend on items they just don't need.
A couple questions: How do retail sales go up in an economy with nearly 20 percent unemployed, disaffected or part-time workers looking for full-time jobs? It doesn't. Numbers get revised way down for January so the headlines can show that retail numbers went up in February.
Consumer sentiment is down--way down.
How do banks get nearly 0 percent interest in taxpayer money and lend 30 percent on credit cards to consumers? How did unsophisticated borrowers get 0 percent, interest-only mortgages that bank CEOs knew would eventually destroy the mortgage industry and, with Glass-Steagall repealed, take down the global economy? How do these insolvent banks remain solvent when they brought the global economy to its knees?
Answer--a dying philosophy for consumers to take on debt and spend, spend, spend on material goods to prop up the entire world's global economy. Does that really make us "number one" in this world?
The Federal government is now our economy. It feeds banks (who retain the money until they're self-sufficient), it backs mortgages with FHA, Fannie Mae and Freddie Mac loans (at an unsustainable volume as the Fed buys mortgage-backed securities). In all, it puts the country in trillions of dollars of debt.
Now, how are we really "number one" in this world if we're more in debt than any other country. Answer--we print money. The Federal Reserve prints it--sells Treasury bonds to foreign countries that hold a promissory note, hoping we can pay since we're the United States.
That's all well and good, as long as the world keeps believing that printed dollar has any value behind it. Well, of course it does, because we're USA--the economic standard. Just look at us--our infrastructure, our educational system, our healthcare and our people, driving with their fancy Toyotas, watching their big-screen TVs unless they are walking away from their houses.
One way to get the message heard is to stop spending, start saving and opening up to reality--and I don't mean reality TV. We the people and the federal government didn't live within our means, we fostered this behavior around the world and we're paying a non-monetary price for that right now.
This is the message--there are no Republicans, Democrats or Independents for that matter. There are multinational corporations living and breathing on the printed dollar, which may soon have little value in the entire scheme of things.
If one day, a ratings agency said the United States' sovereign debt was less than AAA--the highest rating--and more like BBB (because we're trillions of dollars in debt with money based on bonds we'll never be able to pay back), then goodnight. The value of the dollar is completely worthless. That said, however, the Euro will go first, as well as the Yen and all the other currency. China and Japan hold the most U.S. debt, and they know the U.S. can't pay them back. But, they need the U.S. as much as the U.S. needs their money.
How does this madness end? We stop spending money we don't have.
Although, at this point, I don't think we have much choice in the matter, anyway.
So, we've seen the enemy and it's corporate and federal government greed, working hand-in-hand, as well as greed within ourselves by feeling entitled to luxuries we don't necessarily deserve. Living within our means is really the only choice, knowing that risk can be bring reward but it can have negative consequences as well.
Now, bringing about corporate change is nearly impossible because money rules--it rules the justice system, the political system (obviously), the media and our own health. We can protest for ideologies and blog until tomorrow on arguments about which party is right or wrong, but we should never condemn the dollar itself. Right? No way.
Well, the time has finally come to examine everyone's life--each individual--against a ruling class based on monetary wealth. It is time for the majority--the soon-to-be-lost middle class--to realize that their individual lives are far more important that monetary gains by the small, but highly wealthy elite.
These elite are not part of a political party--they're part of a minority club that rules, fails and then rules again. In the club, failure does not exist because CEOs (and politicians) are entitled to succeed. Why not? They have money...they can fail most of their lives with one success thrown in for good measure. Look at George W. Bush.
That is, until these CEOs need to lay off thousands or more people because of their own indiscrepancies. Maybe it's a politician responsible for sending men and women to die because of their own political causes and not in defense of a nation.
That's the club and, if you're a member, you win whether your constituency wins or loses.
No thanks. I believe in fairness and, if you take a risk and fail, you lose. If you risk and win, you succeed. And that everyone should succeed or fail based on their own merit--based on the established set of rules and guidelines. At least, that's how I was treated growing up.
Maybe it's that, or maybe it's just that old Groucho Marx saying, "I would never want to belong to a club that would have me as a member."
That's because groups get things done. Clubs are for members only.
I haven't been to a coffee or tea party, but I was at a birthday party last night, and we discussed politics, history and current events--I know, I'm old and this is my kind of party.
Someone said that nothing ever comes out of an anti-establishment movement, but I tend to disagree with that. The 1960's brought change in the form of civil rights and greater freedoms for race, gender and sexuality--only to see repression return to the mainstream when the baby boomers got older. Of course, the baby boomers are the largest demographic group in the U.S. so anything mainstream for them is always the way to go, whether marching on Washington or making as much money and buying as many things as humanly possible.
Only, the baby boomers forgot to take into account that they are also susceptible to human nature, and baby-boomer politicians sold themselves out because not only did they have an arrogance about them that their needs come before all others, but a "la-la-la-live for today" attitude--which still resembles mainstream in this country.
As much as I hated Ronald Reagan for increasing U.S. debt to increase spending, consumer spending increasing by excessive-minded baby-boomers, the phrase "Just Say No" to make everything all right with our children and selling arms to the enemy, the most irritating thing was a false reality that our country was prosperous when it was heading into a recession and the first bubble-to-bust in what would become a series of bubble bursts every decade.
I thought would this mania would end in 1992 when Bill Clinton came to office.
But, with a Republican Congress entering in 1994, Clinton simply became a Republican in Democrat's clothing and it was under his administration that Glass-Steagall was repealed in 1999, which allowed banks and investment banks to merge as one entity.
This Great Depression II might have happened anyway if Glass-Steagall was not repealed (Glass-Steagall was made into law after The Great Depression to basically prevent overinvestment in banking products, such as mortgages), but I think Glass-Steagall's repeal set the stage for 2008's economic credit crisis. So, that was Clinton's fault because it was under his watch--whether he was "forced" into it with the threat of impeachment or not, it was on his watch.
Of course, Larry "I won't listen to anything about derivatives" Summers was under Clinton and is back NOW under the Obama Administration along with other Wall Street affiliates Tim Geithner and Ben Bernanke.
So, despite, GW Bush's massive overspending and deregulation of...well...every corporation and industry around the world, that same corporate philosophy of "greed is good" and let's get every consumer to spend until they have nothing left and a huge bubble pops, is still around.
Which leads me to a post on The Coffee Party Website. Call it a post or a rant, but here it is:
In the end, when it comes to corporate greed, the best way to destroy it is to not feed into it. The unemployed people have no choice on how they spend; the employed but fiscally conservative will only live within their means and start saving--which many are doing; and the foolish will take on more debt and spend on items they just don't need.
A couple questions: How do retail sales go up in an economy with nearly 20 percent unemployed, disaffected or part-time workers looking for full-time jobs? It doesn't. Numbers get revised way down for January so the headlines can show that retail numbers went up in February.
Consumer sentiment is down--way down.
How do banks get nearly 0 percent interest in taxpayer money and lend 30 percent on credit cards to consumers? How did unsophisticated borrowers get 0 percent, interest-only mortgages that bank CEOs knew would eventually destroy the mortgage industry and, with Glass-Steagall repealed, take down the global economy? How do these insolvent banks remain solvent when they brought the global economy to its knees?
Answer--a dying philosophy for consumers to take on debt and spend, spend, spend on material goods to prop up the entire world's global economy. Does that really make us "number one" in this world?
The Federal government is now our economy. It feeds banks (who retain the money until they're self-sufficient), it backs mortgages with FHA, Fannie Mae and Freddie Mac loans (at an unsustainable volume as the Fed buys mortgage-backed securities). In all, it puts the country in trillions of dollars of debt.
Now, how are we really "number one" in this world if we're more in debt than any other country. Answer--we print money. The Federal Reserve prints it--sells Treasury bonds to foreign countries that hold a promissory note, hoping we can pay since we're the United States.
That's all well and good, as long as the world keeps believing that printed dollar has any value behind it. Well, of course it does, because we're USA--the economic standard. Just look at us--our infrastructure, our educational system, our healthcare and our people, driving with their fancy Toyotas, watching their big-screen TVs unless they are walking away from their houses.
One way to get the message heard is to stop spending, start saving and opening up to reality--and I don't mean reality TV. We the people and the federal government didn't live within our means, we fostered this behavior around the world and we're paying a non-monetary price for that right now.
This is the message--there are no Republicans, Democrats or Independents for that matter. There are multinational corporations living and breathing on the printed dollar, which may soon have little value in the entire scheme of things.
If one day, a ratings agency said the United States' sovereign debt was less than AAA--the highest rating--and more like BBB (because we're trillions of dollars in debt with money based on bonds we'll never be able to pay back), then goodnight. The value of the dollar is completely worthless. That said, however, the Euro will go first, as well as the Yen and all the other currency. China and Japan hold the most U.S. debt, and they know the U.S. can't pay them back. But, they need the U.S. as much as the U.S. needs their money.
How does this madness end? We stop spending money we don't have.
Although, at this point, I don't think we have much choice in the matter, anyway.
So, we've seen the enemy and it's corporate and federal government greed, working hand-in-hand, as well as greed within ourselves by feeling entitled to luxuries we don't necessarily deserve. Living within our means is really the only choice, knowing that risk can be bring reward but it can have negative consequences as well.
Now, bringing about corporate change is nearly impossible because money rules--it rules the justice system, the political system (obviously), the media and our own health. We can protest for ideologies and blog until tomorrow on arguments about which party is right or wrong, but we should never condemn the dollar itself. Right? No way.
Well, the time has finally come to examine everyone's life--each individual--against a ruling class based on monetary wealth. It is time for the majority--the soon-to-be-lost middle class--to realize that their individual lives are far more important that monetary gains by the small, but highly wealthy elite.
These elite are not part of a political party--they're part of a minority club that rules, fails and then rules again. In the club, failure does not exist because CEOs (and politicians) are entitled to succeed. Why not? They have money...they can fail most of their lives with one success thrown in for good measure. Look at George W. Bush.
That is, until these CEOs need to lay off thousands or more people because of their own indiscrepancies. Maybe it's a politician responsible for sending men and women to die because of their own political causes and not in defense of a nation.
That's the club and, if you're a member, you win whether your constituency wins or loses.
No thanks. I believe in fairness and, if you take a risk and fail, you lose. If you risk and win, you succeed. And that everyone should succeed or fail based on their own merit--based on the established set of rules and guidelines. At least, that's how I was treated growing up.
Maybe it's that, or maybe it's just that old Groucho Marx saying, "I would never want to belong to a club that would have me as a member."
That's because groups get things done. Clubs are for members only.
Thursday, March 11, 2010
The Patient is Slipping, Doctor
From now on, I'm going to use the analogy of the United States as a comatose patient on life support and the U.S. Government as the life support system. That's the fact because without the Fed dollars propping up this economy--banks, Fannie Mae, Freddie Mac, automakers--the U.S. would flatline. Can we all agree on that? If not, then we're trillions of dollars in debt for no reason, and we should have a health care plan that covers ALL Americans (I agree on the latter anyway, but that's just my opinion).
So, if the U.S. is a comatose patient on life support, I can only quote a line from the comic in "Defending Your Life," the Albert Brooks movie, where a comic tries to find out how long a dead man was in a coma by asking him if Elvis is living or dead. The man said living. The comic said to Art, the dead man, "Long coma, Art...long coma."
I say the same for the comatose U.S. economy kept on life support by the U.S. government. "Long coma." Here's why just based on TODAY's STATISTICS. I don't mean "today" as in the current environment. I mean, literally, TODAY.
First, a headline from the Wall Street Journal:
• The Kansas City Missouri School Board voted on Wednesday night to shutter nearly half of its schools in an effort to avoid going broke.
That’s not the top story—but one of the top stories.
Half of a major city's schools are closing so it will not go broke. I know education is the first to go being the values that they are in this country, but that’s ridiculous.
And, with declining tax values and no replenishment of funds, when will the second half shutter? The decay of our education system within states and municipalities going broke.
Not to mention first-time unemployment claims continue above 460,000 today--a 6,000 claim improvement from the previous number.
I saw an unemployed engineer of 35-years the other day standing next to the subway with a cup in his hands—and we’re still on government life support.
These are the early signs of decline for the supposed wealthiest country in the world.
Not a sermon, just a rant.
Also today, Marketwatch.com said retail stocks fell, led by Bed, Bath & Beyond Inc. after the home-furnishings retailer was cut to underperform from market perform by FBR Capital Markets.
Men's Wearhouse Inc. declined 5.2 percent after the men's clothing retailer reported worse than expected fourth-quarter sales.
The children's clothing retailer Gymboree Corp. rose 7.3 percent after its fourth-quarter profit topped Street expectations and its first-quarter outlook also may exceed estimates, Marketwatch said.
Here's the deal--Bed, Bath & Beyond anchors alot of retail centers and if that goes dark, it's just not a good sign that retail real estate investment trusts in debt are going to get their rent to pay their debt. That means those commercial real estate loans in those commercial mortgage-backed securities and those collateralized debt obligations will not be able to receive their payments. That means investors will lose money on those securities. That means banks, insurance companies, other companies and individuals that made these investments will lose money as billions and billions of CMBS dollars mature from 2015 to 2017--assuming nobody replaces Bed, Bath & Beyond as an anchor retailer.
Do you see anybody opening large new stores anywhere in your area anytime soon?
Do you see people spending on discretionary items anytime soon?
Even Men's Wearhouse, a clothing store for men, is doing poorly.
Retail has not even started to show delinquencies--yet. Hotel remains at the top of CMBS defaults, followed by multifamily and then retail. Keep in mind that CMBS special servicers are doing all they can to extend these loans. However, why would anyone in their right mind invest in the CMBS market with current fundamentals? Unless of course, it was the Fed giving money to banks to make these investments.
All fine...except--as we know--it costs money...lots of money to keep an individual on a life support system. Just think how much it costs the Fed (the taxpayers) to keep the U.S. on life support. That's all well and good, except the patient isn't getting any better.
Real estate values continue to fall in residential and commercial real estate; oil prices are rising--meaning gas prices increase and higher payments for consumers; consumers are saving and still paying off debt; unemployment remains high. When do we get back to consumer spending by way of 2005-2007. How about the 12th--the 12th of never--as Earth, Wind and Fire sang.
Slow recovery, weak fundamentals, higher savings, trillions of debt and major CMBS fixed-rate maturites in the tune of more than $180 billion from 2015-2017. That's like saying that even if the patient goes into remission, gets off of life support and begins to walk tomorrow, the U.S. will not be out of the woods completely for another seven years.
"Long coma, Art. Long coma."
So, if the U.S. is a comatose patient on life support, I can only quote a line from the comic in "Defending Your Life," the Albert Brooks movie, where a comic tries to find out how long a dead man was in a coma by asking him if Elvis is living or dead. The man said living. The comic said to Art, the dead man, "Long coma, Art...long coma."
I say the same for the comatose U.S. economy kept on life support by the U.S. government. "Long coma." Here's why just based on TODAY's STATISTICS. I don't mean "today" as in the current environment. I mean, literally, TODAY.
First, a headline from the Wall Street Journal:
• The Kansas City Missouri School Board voted on Wednesday night to shutter nearly half of its schools in an effort to avoid going broke.
That’s not the top story—but one of the top stories.
Half of a major city's schools are closing so it will not go broke. I know education is the first to go being the values that they are in this country, but that’s ridiculous.
And, with declining tax values and no replenishment of funds, when will the second half shutter? The decay of our education system within states and municipalities going broke.
Not to mention first-time unemployment claims continue above 460,000 today--a 6,000 claim improvement from the previous number.
I saw an unemployed engineer of 35-years the other day standing next to the subway with a cup in his hands—and we’re still on government life support.
These are the early signs of decline for the supposed wealthiest country in the world.
Not a sermon, just a rant.
Also today, Marketwatch.com said retail stocks fell, led by Bed, Bath & Beyond Inc. after the home-furnishings retailer was cut to underperform from market perform by FBR Capital Markets.
Men's Wearhouse Inc. declined 5.2 percent after the men's clothing retailer reported worse than expected fourth-quarter sales.
The children's clothing retailer Gymboree Corp. rose 7.3 percent after its fourth-quarter profit topped Street expectations and its first-quarter outlook also may exceed estimates, Marketwatch said.
Here's the deal--Bed, Bath & Beyond anchors alot of retail centers and if that goes dark, it's just not a good sign that retail real estate investment trusts in debt are going to get their rent to pay their debt. That means those commercial real estate loans in those commercial mortgage-backed securities and those collateralized debt obligations will not be able to receive their payments. That means investors will lose money on those securities. That means banks, insurance companies, other companies and individuals that made these investments will lose money as billions and billions of CMBS dollars mature from 2015 to 2017--assuming nobody replaces Bed, Bath & Beyond as an anchor retailer.
Do you see anybody opening large new stores anywhere in your area anytime soon?
Do you see people spending on discretionary items anytime soon?
Even Men's Wearhouse, a clothing store for men, is doing poorly.
Retail has not even started to show delinquencies--yet. Hotel remains at the top of CMBS defaults, followed by multifamily and then retail. Keep in mind that CMBS special servicers are doing all they can to extend these loans. However, why would anyone in their right mind invest in the CMBS market with current fundamentals? Unless of course, it was the Fed giving money to banks to make these investments.
All fine...except--as we know--it costs money...lots of money to keep an individual on a life support system. Just think how much it costs the Fed (the taxpayers) to keep the U.S. on life support. That's all well and good, except the patient isn't getting any better.
Real estate values continue to fall in residential and commercial real estate; oil prices are rising--meaning gas prices increase and higher payments for consumers; consumers are saving and still paying off debt; unemployment remains high. When do we get back to consumer spending by way of 2005-2007. How about the 12th--the 12th of never--as Earth, Wind and Fire sang.
Slow recovery, weak fundamentals, higher savings, trillions of debt and major CMBS fixed-rate maturites in the tune of more than $180 billion from 2015-2017. That's like saying that even if the patient goes into remission, gets off of life support and begins to walk tomorrow, the U.S. will not be out of the woods completely for another seven years.
"Long coma, Art. Long coma."
Thursday, February 11, 2010
Haven't been here for awhile because I've been working on a screenplay. However, I received an editorial from a good friend about why commercial real estate equity investors are having to fold up shop and wait for any CRE deals to come their way. After reading his newsletter, I had a lot stored up to say, and here it is:
CB,
Very interesting reading and quite thought provoking.
I agree that this economic situation is not the original Great Depression for a variety of reasons (i.e. soup lines, 25 percent unemployment, residential real estate, CRE boom, etc.) but as we've talked about before, I do believe it qualifies as Great Depression II.
The similarities are there--excessive investment risks that basically blew up and an unemployment rate that--looked at closely--hovers near 25 percent. Even worse, an interconnected global landscape, which I won't get into because I just don't know enough about it.
I do know, however, that the Federal Government has manipulated the processes and changed the rules to such an extent that it cannot play out in any historical context. I'm referring, of course, to the "tools" Ben Bernanke and Tim Geithner are able to use to prevent another economic collapse.
In reality, I think anyone with common sense realizes they are putting off the inevitable.
Bernanke, Geithner, Summers, etc. want to continue the 30-year joy ride of booms and busts, excessive consumer spending and rising debt rather than watching the natural course of deflation within a fiat economy.
Therefore, fire sale prices on residential or commercial real estate and a gradual recovery don't fit into a model that relies on large banks tied to investments around the globe. Meantime, our heros in government would love to see consumers start spending money--whether consumers have money or not.
Besides the fact that weak consumers and businesses can't get debt to spend and strong consumers and businesses don't want debt, all of this tinkering also creates uncertainty in all of the markets--real estate, commodities, etc.
But, banks want to survive, so they are going to be conservative in lending and not show their hand via mark-to-market (or model) accounting rules--since the federal government is helping them to do that.
Consumers want to survive, so they are not going to spend beyond their means and, with unemployment up for quite some time, they don't even have that much to spend anyway.
There's also uncertainty for people with jobs who will not spend anytime soon because they are not sure the economy is going to improve.
Everyone is saving--nobody is spending--except the Federal Government, of course. That's the other problem--the Federal Government is bankrupt--out of money and printing it--so the FDIC does not want to close banks and expose their lack of capital and value behind the paper they're printing.
Hence, you have “extend and pretend,” or manipulation of accounting rules, uncertain values and pricing in our markets. Pardon the pun, but it's change you can't believe in--and I mean pocket change.
It also keeps real money on the sidelines for everything except the stock market because investors get "free money" (or very cheap money) to invest in it.
As for commercial real estate, sure you're going to do a transaction on a fully leased trophy property at 60 percent of the original purchase price in Washington, D.C. Refinance? Why not? As long as banks don't have to show losses. But, will anyone buy a loan on a multifamily development deal? Will anyone do a transaction for a retail outlet in Cincinnati, Ohio? Not if a bank can extend the loan, hoping for that value to miraculously go up via some time machine back to 2007?
Frankly, printing money and throwing it at U.S. banks to bring us back to those halcyon times of 2005-2007 just doesn't make alot of sense, but that seems to be the Paulson-to-Geithner handoff approach. They want to win one for the Gipper (another pun).
In the end, as I mentioned, everyone does what is best for themselves in our greed-laden, self-absorbed society--including politicians, the banks, the American people and equity funds that receive investments but need to fold because they are not able to get the deals they want. As for CMBS, my greatest fear is the conflict-of-interest between AAA senior bondholders and the B-piece buyer a.k.a special servicer as interest shortfalls increase.
Let's face it, AAA bondholders want foreclosure, special servicers are holding on and future CMBS bondholders are going to say, "Why in the world would I ever want to invest in this market again?" Until it changes significantly (i.e. rating agency reform, tighter underwriting and confidence in that underwriting), I just don't see investor confidence coming back in droves.
But, thinking of greed, that would not be the first time I've seen an industry implode because its leaders did not look out for the industry itself. And why should investors come back in droves to anything with certainty?
Unemployment is showing no signs of actual improvement and, as someone told me about three years ago, it's all about "jobs, jobs, jobs" when it comes to commercial real estate. As long as there are jobs, CRE is OK. No jobs, however, mean industrial, retail, hotels and office properties grow vacant. No liquidity means they cannot refinance.
It's not rocket science, and I know I'm probably regurgitating most of this from your own writings.
The other point you made, about these CEOs...well...I hate to say this, but before the 2008 crash, all these Wall Street CEOs were saying how their companies were strong, they had no problems and the next thing you know, Lehman Brothers is going bankrupt. CEOs and politicians are the same breed--they say what needs to be said at the time, regardless of reality.
How many times did we hear that there was no housing bubble? How many times did we there was no contagion from residential to commercial real estate or the CMBS market? How many times did an optimistic CEO say investors will be back in CMBS soon? They’re optimistic because they can be optimistic. If they're wrong, it doesn't matter.
Best case example—Jonathan Kempner, former president and CEO of MBA--buying a building without tenants at the precipice of the CRE market only to see market values collapse and tenant nowhere to be found. Kempner's advisors were likely CEOs from commercial real estate firms who must have had some inkling about what was going on in the CRE world at that time.
So Kempner ends his MBA reign with a nice severance package, he now works as a CEO in New York bringing investors together, he continues to earn more money than I’ll ever see in my lifetime and, meanwhile, MBA looks like a bunch of idiots (particularly on a Good Morning America segment I saw today).
The moral to this story is that CEOs are not rocket scientists, they try to be optimistic and--yes--a few tell it like it is. But most of them are salesmen, trying to sell you on a company or a concept that this is the USA and the economy is coming back strong. That is, until they come home, sit back, have a drink and think about how incredibly horrible this situation really is and will likely be for some time.
The way I see it is…as harsh as my outlook appears, I know investors who look at the situation with a far worse perspective than myself.
The money stays on the sidelines for most properties until there’s any certainty in value which, by the way, started this stupid thing in the first place.
To me, it's ironic. Investors were not investing in the markets because of value uncertainty and, now, the Federal Government (Timmay and the boys) have made valuation even more uncertain with their lucrative "toolbox" of tools to keep the economy from going off a cliff.
The reality is, they just slowed down the car from heading off the proverbial cliff. Slowed it down enough for real property values to not come back for at least 10 years.
Just my two cents, and keep up the great editorials.
Robert
CB,
Very interesting reading and quite thought provoking.
I agree that this economic situation is not the original Great Depression for a variety of reasons (i.e. soup lines, 25 percent unemployment, residential real estate, CRE boom, etc.) but as we've talked about before, I do believe it qualifies as Great Depression II.
The similarities are there--excessive investment risks that basically blew up and an unemployment rate that--looked at closely--hovers near 25 percent. Even worse, an interconnected global landscape, which I won't get into because I just don't know enough about it.
I do know, however, that the Federal Government has manipulated the processes and changed the rules to such an extent that it cannot play out in any historical context. I'm referring, of course, to the "tools" Ben Bernanke and Tim Geithner are able to use to prevent another economic collapse.
In reality, I think anyone with common sense realizes they are putting off the inevitable.
Bernanke, Geithner, Summers, etc. want to continue the 30-year joy ride of booms and busts, excessive consumer spending and rising debt rather than watching the natural course of deflation within a fiat economy.
Therefore, fire sale prices on residential or commercial real estate and a gradual recovery don't fit into a model that relies on large banks tied to investments around the globe. Meantime, our heros in government would love to see consumers start spending money--whether consumers have money or not.
Besides the fact that weak consumers and businesses can't get debt to spend and strong consumers and businesses don't want debt, all of this tinkering also creates uncertainty in all of the markets--real estate, commodities, etc.
But, banks want to survive, so they are going to be conservative in lending and not show their hand via mark-to-market (or model) accounting rules--since the federal government is helping them to do that.
Consumers want to survive, so they are not going to spend beyond their means and, with unemployment up for quite some time, they don't even have that much to spend anyway.
There's also uncertainty for people with jobs who will not spend anytime soon because they are not sure the economy is going to improve.
Everyone is saving--nobody is spending--except the Federal Government, of course. That's the other problem--the Federal Government is bankrupt--out of money and printing it--so the FDIC does not want to close banks and expose their lack of capital and value behind the paper they're printing.
Hence, you have “extend and pretend,” or manipulation of accounting rules, uncertain values and pricing in our markets. Pardon the pun, but it's change you can't believe in--and I mean pocket change.
It also keeps real money on the sidelines for everything except the stock market because investors get "free money" (or very cheap money) to invest in it.
As for commercial real estate, sure you're going to do a transaction on a fully leased trophy property at 60 percent of the original purchase price in Washington, D.C. Refinance? Why not? As long as banks don't have to show losses. But, will anyone buy a loan on a multifamily development deal? Will anyone do a transaction for a retail outlet in Cincinnati, Ohio? Not if a bank can extend the loan, hoping for that value to miraculously go up via some time machine back to 2007?
Frankly, printing money and throwing it at U.S. banks to bring us back to those halcyon times of 2005-2007 just doesn't make alot of sense, but that seems to be the Paulson-to-Geithner handoff approach. They want to win one for the Gipper (another pun).
In the end, as I mentioned, everyone does what is best for themselves in our greed-laden, self-absorbed society--including politicians, the banks, the American people and equity funds that receive investments but need to fold because they are not able to get the deals they want. As for CMBS, my greatest fear is the conflict-of-interest between AAA senior bondholders and the B-piece buyer a.k.a special servicer as interest shortfalls increase.
Let's face it, AAA bondholders want foreclosure, special servicers are holding on and future CMBS bondholders are going to say, "Why in the world would I ever want to invest in this market again?" Until it changes significantly (i.e. rating agency reform, tighter underwriting and confidence in that underwriting), I just don't see investor confidence coming back in droves.
But, thinking of greed, that would not be the first time I've seen an industry implode because its leaders did not look out for the industry itself. And why should investors come back in droves to anything with certainty?
Unemployment is showing no signs of actual improvement and, as someone told me about three years ago, it's all about "jobs, jobs, jobs" when it comes to commercial real estate. As long as there are jobs, CRE is OK. No jobs, however, mean industrial, retail, hotels and office properties grow vacant. No liquidity means they cannot refinance.
It's not rocket science, and I know I'm probably regurgitating most of this from your own writings.
The other point you made, about these CEOs...well...I hate to say this, but before the 2008 crash, all these Wall Street CEOs were saying how their companies were strong, they had no problems and the next thing you know, Lehman Brothers is going bankrupt. CEOs and politicians are the same breed--they say what needs to be said at the time, regardless of reality.
How many times did we hear that there was no housing bubble? How many times did we there was no contagion from residential to commercial real estate or the CMBS market? How many times did an optimistic CEO say investors will be back in CMBS soon? They’re optimistic because they can be optimistic. If they're wrong, it doesn't matter.
Best case example—Jonathan Kempner, former president and CEO of MBA--buying a building without tenants at the precipice of the CRE market only to see market values collapse and tenant nowhere to be found. Kempner's advisors were likely CEOs from commercial real estate firms who must have had some inkling about what was going on in the CRE world at that time.
So Kempner ends his MBA reign with a nice severance package, he now works as a CEO in New York bringing investors together, he continues to earn more money than I’ll ever see in my lifetime and, meanwhile, MBA looks like a bunch of idiots (particularly on a Good Morning America segment I saw today).
The moral to this story is that CEOs are not rocket scientists, they try to be optimistic and--yes--a few tell it like it is. But most of them are salesmen, trying to sell you on a company or a concept that this is the USA and the economy is coming back strong. That is, until they come home, sit back, have a drink and think about how incredibly horrible this situation really is and will likely be for some time.
The way I see it is…as harsh as my outlook appears, I know investors who look at the situation with a far worse perspective than myself.
The money stays on the sidelines for most properties until there’s any certainty in value which, by the way, started this stupid thing in the first place.
To me, it's ironic. Investors were not investing in the markets because of value uncertainty and, now, the Federal Government (Timmay and the boys) have made valuation even more uncertain with their lucrative "toolbox" of tools to keep the economy from going off a cliff.
The reality is, they just slowed down the car from heading off the proverbial cliff. Slowed it down enough for real property values to not come back for at least 10 years.
Just my two cents, and keep up the great editorials.
Robert
Saturday, January 9, 2010
A New Decade, A New Revolution
"In every revolution, there is one man with a vision," Captain Kirk said to the bearded Mr. Spock in "Mirror, Mirror," a Star Trek episode that transported Kirk, McCoy, Scotty and Uhura into an alternate, belligerent universe.
The Enterprise crew were conquerors and rather than negotiating with other life forms, they stole property. Rather than bring new planets into the Federation, they destroyed them in favor of the Empire. With his words, however, Kirk convinced Spock to turn the Empire in a Federation that explored new worlds, blah, blah, blah. You get the picture.
This country, like that alternative universe in Star Trek, needs a philosophical shift, a revolution if you will, in its approach to monetary gains, human value and a fiscal system that can reward this country and its people as a whole.
Indeed, the "bad" Spock knew the Empire would be overthrown eventually--much like the fall of the Roman Empire. Kirk argued that its inevitable outcome made its mission a "waste." He was right.
In the U.S. today, the approach to consumer spending as 70 percent of gross domestic product is also unsustainable and a waste of wealth that people cannot even call their own.
This economy thrived for the past 30 years because credit extensions allowed all consumers--rich, middle class and poor--to take part in "The American Dream" of buying fancy clothes, expensive jewelery, nice dinners, huge television screens, state-of-the-art sound systems, cool sporty cars, oversized SUVs and--yes--the McMansions we once could only dream about while watching Dynasty or Dallas in the 1980's.
Now, we sit watching a small segment of the population--major celebrities and entertainers, top executives, CEOs and some astute investment bankers--truly live within their means and enjoy the rewards from the excessive pay they receive.
(I still believe these people earn way too much compared to directors, managers, laborers--you know, people who are not part of "the club" that hangs out with the wealthy. This may all sound conspiratorial but, if you do not "play the game," it doesn't matter how hard one works in this lifetime--the executive status is not there. After all, if it wasn't for his daddy, how else would George W. have been President of the United States, much less make more than $30,000 per year).
It's about who you know and most people in this world don't know millionaires or billionaires. However, a good piece of advice might be to become friends with a millionaire or billionaire--like Dan Snyder befriended Mort Zuckerman who invested $1 million on a college newspaper that failed and then invested another $1 million on a telemarketing firm that succeeded. Now, Snyder has enough money to invest in an amusement park that failed and football team that has been failing for the past 10 years. [Note: If he does not meddle with Shanahan and Allen, he may just succeed again as he did in the telemarketing firm].
So, we have a majority of good, decent people who work hard and--if they live within their means--may never achieve the aggregate of a huge home, a guest home for visitors, a tennis court in their backyard, a huge high definition theater screen with blue-ray DVDs, the antique furniture and authentic Monet pictures. They may get the huge screen, they may get the nice furniture, they might just get a nice dining room table with chairs. But it is difficult to have it ALL in this world if we all live within our means.
Our two parties--Republican and, yes, Democrat--believe in false promises. They want to say,"American Dream," "Land of Opportunity" and that those dreams and opportunities equate to fame and fortune. Be famous like Tiger Woods so the rest of the country can judge disapprovingly of your immoral behavior. Be extraordinarily wealthy like Bernard Madoff, until you discover fraud and send him to jail for his improprieties. Be powerful like Timothy Geithner or Ben Bernanke who favor large banking institutions and change regulations and laws to suit political purposes.
Yes, Sting and The Police were correct when they said, "Poets and priests and politicians are jamming our transmissions."
Ladies and gentlemen, it's time for a new party: The Progressives.
Notice, I did not say liberals. Those were the hippie 1960's and early 1970's, part of an extremist baby-boomer movement--the same extremist movement we have seen throughout recent financial history with decades of booms and busts. Extremism in fitness, health, style, sex, drugs, partisan politics, causes (right or left), religion and--yes--consumer spending. It has been decades of not living within proper means and asking ourselves, "Why don't I have any money? Why do I have all these things, and I'm miserable?"
No, the liberals are not progressive. As Bill Maher said, the Democrats are the new Republicans and the Republicans are the "looney party."
The Progessives--a new third party--are socially liberal, fiscal conservative moderates who believe the American public needs to live within their means. After all, why must I have that fancy grill my next door neighbor has if my own grill fits my needs? Why must his neighbor have a 52-inch plasma television when a 42-inch screen is all he or she can afford?
The founding fathers wrote of "truth, liberty and the pursuit of happiness," but our Congress seems to believe in "deception, debt slavery and pursuit of more material items." Let's return to the fundamentals and, ironically, that means becoming "progressive."
It means leaving behind the material 1980's, the increasingly debt-ridden 1990's and the ridiculously out-of-control 2000's.
The Progressives are about a Congress that works together to achieve goals for the common good. Obviously, not everyone will be happy, but at least the common man or woman will be happier than heads of large corporations, special interest groups and lobbyists who contribute to lawmaker campaigns.
Greed and ego are not in the Progressive Party agenda. The Party believes that lawmakers decide on policy for the common good of the country--Education (including a financial education in middle and secondary schools); Affordable healthcare insurance for EVERYONE, regardless; Social Security for people 70 years and older; Medicare for 55 and older; letting big banks, small banks, big companies, small companies, anyone fail if they are insolvent, bankrupt or inefficient based on Generally Accepted Accounting Principles; deleveraging all of the toxic debt based on mark-to-market accounting rules so that people who invest know where they are putting their money; consistent risk and regulated costs in bank and insurance underwriting; and, most important, public campaign financing so that politcal officials--people in power--are not taking money to make important decision on the country's laws and regulations.
The Progressives believe in reducing the amount of debt available and balancing the country's budget, creating greater savings for consumers and the country and, for goodness sake, legalize marijuana--adding a heavy federal, state and local tax--like cigarettes and alchohol. Make it 21 or older. Make driving while drinking illegal--period. None of this .08 crap. Treat marijuana like alcohol. Unlike caffeine, it is unacceptable in public (except where there is a permit) and in the workplace. The "War on Drugs" money goes back into the Federal Government. Frankly, if people abuse drugs, that is their problem, their life and they need to be responsible for themselves.
The Progressives believe everyone has a right to a gun, but there will be a "War on Guns" like a war on drugs. All guns without permits will be confiscated; federal officials will seek out illegal gun dealers and incarcerate them. It will not be easy to receive a gun. It will include an extremely thorough background check. A person who does have a permit to carry a gun will then need to always provide the types of guns they purchase through legal gun dealers. Make it really hard for someone to obtain a handgun. For example, harder than for police officers instead of easier.
No world is a "utopia," but how much is enough in a world driven by rich, greedy people who only look at the highest earnings at the lowest cost? What is value at this point in today's world and, indeed, what do we value? People, prices or merchandise? What is the value of human life is that life is deemed valueless by health insurance companies and credit agencies--the same group that may even promote the Pro-Life segment of the population. What value is choice for Pro-Choice advocates if teen-age girls feel inferior to bulimic, air-brushed celebrities in magazines and on television.
That said, we should promote available resources for people in need of food, shelter and clothes--basic human needs must have significant government funding. The trillions spent on bailing out banks, starting wars and sheer entertainment could go to healthcare, homeless shelters, mental health rehabilitation clinics, which can include substance abuse centers for alcoholics, marijuana abusers and other people who decide they want to change their lives. Tax credits go to large corporations who put money back into Main Street, helping families and children see a future world outside of poverty, crime and gang warfare.
And, most important, this country must start "Green" manufacturing--electric cars, electric fueling stations, electricity, energy. Quit paying Saudi Arabia--home to legacy terrorists--for oil so that it can funnel down through its families to rebellious, spoiled and religious, fanatical brats like Osama Bin Landen, etc., etc.
And, while we are at it, let's quit giving validity to the term "terrorists," crazy religious fanatics, raising them above kids who kill 32 college students or seven high school students in classrooms around the country.
Here are some terms for ANY HUMAN BEING who kills a large group of people--"EVIL. ASSHOLE. DICKHEAD. INSANE." Did I say "asshole?" I don't care if it's for religious beliefs, political beliefs, low self-esteem, extreme pressure, the drug trade, organized crime, unable to pickup women, a man cheating, etc., etc.
If you kill a human being--or many human beings at one time--you are usually an extraordinarily evil person unless it is a military event in a war or self defense.
And, as a general belief, The Progressive Party realizes that life is relatively short so let's not take it too seriously because we are not on this earth for a very long time. Let's lighten up, learn to enjoy ourselves and each other for who we are and--if we are over the age of 18--try and behave like adults. Try to be smart. Be serious. Don't stereotype. But, have a sense of humor to laugh at ourselves and each other. We are only on this planet once--I think--let's enjoy ourselves here and realize the responsibility we have to others.
In general, The Progressive Party likes good people and we hate bad people, and we will work very hard to give the best in this world to the good people and protect them from bad people.
Now, who are good people? Ones who do no physical harm to others unless in self defense. Honest people who respect the rights and privacy of others. Who are bad people? Those who steal, cheat, do physical harm to others for no reason, kill people for no reason, disrespectful of their fellow citizens and disrespectful of privacy and rights of others. They are bad. I hate to sound like the elder George Bush, but Progressives "good," Democrats and Republicans "bad."
And, who shall be the first leader of The Progressives? My vote would be for the Independent Bernie Sanders from Vermont. Perhaps it might be my job to walk up to him one day, letting him know about The Progressives and hear what he has to say about it. "In every revolution, there is one man with a vision," I would say. And he would call the cops.
Unlike in Star Trek, there is no "device" to weed out enemies that allowed the bearded Spock to carry out his revolution. That said, the Deep Space Nine writers ended up screwing up the story anyway, as if Kirk made a mistake in telling Spock to change things and the Bajorans take over. Right. Like that would ever happen. Perhaps, in the end, future Progressives would screw things up, too, but the concept is true.
Just as CBS and NBC soon saw a third network on the horizon with the call letters ABC, the Democrats and Republicans may see the dawn of a new era. A group of leaders whose cause stands outside of their own agenda. It will be a new agenda for every man, woman and child in the United States of America. For the white, the black, the Hispanic, the Asian, the Jew, the Muslim, the White Anglo-Saxon Protestant, the Catholic, the Methodist, the Southern Baptist, the atheist, the agnostic, the mentally ill, the physically handicapped and the families in this land, a new agenda to promote security and courage in facing the future.
It is time to stand up for the majority of this population--not the moral majority--but to understand that the needs of the many outweigh the needs of the few. The common good must overwhelm personal greed and individual power so that each young person in America born every day understands during their lifetime that their existence has value beyond a dollar sign.
This is The Progressive Party--leading the way into a new decade, a new century, with the understanding that happiness is found, not from without, but from within. And true individual happiness can only be found through collective generosity to our fellow citizens. From there, we expand to diversities of other nations, creeds, colors and genders. We accept diversity--we do not fear it--and we accept change, flexibility and the future--we do not fear it.
This country needs a revolution--the world needs compassion, not hate--and out there, somewhere, is one man or woman with a vision to stand up and lead. To take the United States, and the world, to the highest heights.
Imagine a world working together--countries, continents and world leaders--with the common goal that we are all human beings in this lifetime striving to help each other, not hurt each other; to contribute, not overpower; to push each other to our highest potential...so that no human being may go poor and hungry.....and that we can all live a fruitful and fulfilling life....
Nah!
Happy New Year's everybody!
The Enterprise crew were conquerors and rather than negotiating with other life forms, they stole property. Rather than bring new planets into the Federation, they destroyed them in favor of the Empire. With his words, however, Kirk convinced Spock to turn the Empire in a Federation that explored new worlds, blah, blah, blah. You get the picture.
This country, like that alternative universe in Star Trek, needs a philosophical shift, a revolution if you will, in its approach to monetary gains, human value and a fiscal system that can reward this country and its people as a whole.
Indeed, the "bad" Spock knew the Empire would be overthrown eventually--much like the fall of the Roman Empire. Kirk argued that its inevitable outcome made its mission a "waste." He was right.
In the U.S. today, the approach to consumer spending as 70 percent of gross domestic product is also unsustainable and a waste of wealth that people cannot even call their own.
This economy thrived for the past 30 years because credit extensions allowed all consumers--rich, middle class and poor--to take part in "The American Dream" of buying fancy clothes, expensive jewelery, nice dinners, huge television screens, state-of-the-art sound systems, cool sporty cars, oversized SUVs and--yes--the McMansions we once could only dream about while watching Dynasty or Dallas in the 1980's.
Now, we sit watching a small segment of the population--major celebrities and entertainers, top executives, CEOs and some astute investment bankers--truly live within their means and enjoy the rewards from the excessive pay they receive.
(I still believe these people earn way too much compared to directors, managers, laborers--you know, people who are not part of "the club" that hangs out with the wealthy. This may all sound conspiratorial but, if you do not "play the game," it doesn't matter how hard one works in this lifetime--the executive status is not there. After all, if it wasn't for his daddy, how else would George W. have been President of the United States, much less make more than $30,000 per year).
It's about who you know and most people in this world don't know millionaires or billionaires. However, a good piece of advice might be to become friends with a millionaire or billionaire--like Dan Snyder befriended Mort Zuckerman who invested $1 million on a college newspaper that failed and then invested another $1 million on a telemarketing firm that succeeded. Now, Snyder has enough money to invest in an amusement park that failed and football team that has been failing for the past 10 years. [Note: If he does not meddle with Shanahan and Allen, he may just succeed again as he did in the telemarketing firm].
So, we have a majority of good, decent people who work hard and--if they live within their means--may never achieve the aggregate of a huge home, a guest home for visitors, a tennis court in their backyard, a huge high definition theater screen with blue-ray DVDs, the antique furniture and authentic Monet pictures. They may get the huge screen, they may get the nice furniture, they might just get a nice dining room table with chairs. But it is difficult to have it ALL in this world if we all live within our means.
Our two parties--Republican and, yes, Democrat--believe in false promises. They want to say,"American Dream," "Land of Opportunity" and that those dreams and opportunities equate to fame and fortune. Be famous like Tiger Woods so the rest of the country can judge disapprovingly of your immoral behavior. Be extraordinarily wealthy like Bernard Madoff, until you discover fraud and send him to jail for his improprieties. Be powerful like Timothy Geithner or Ben Bernanke who favor large banking institutions and change regulations and laws to suit political purposes.
Yes, Sting and The Police were correct when they said, "Poets and priests and politicians are jamming our transmissions."
Ladies and gentlemen, it's time for a new party: The Progressives.
Notice, I did not say liberals. Those were the hippie 1960's and early 1970's, part of an extremist baby-boomer movement--the same extremist movement we have seen throughout recent financial history with decades of booms and busts. Extremism in fitness, health, style, sex, drugs, partisan politics, causes (right or left), religion and--yes--consumer spending. It has been decades of not living within proper means and asking ourselves, "Why don't I have any money? Why do I have all these things, and I'm miserable?"
No, the liberals are not progressive. As Bill Maher said, the Democrats are the new Republicans and the Republicans are the "looney party."
The Progessives--a new third party--are socially liberal, fiscal conservative moderates who believe the American public needs to live within their means. After all, why must I have that fancy grill my next door neighbor has if my own grill fits my needs? Why must his neighbor have a 52-inch plasma television when a 42-inch screen is all he or she can afford?
The founding fathers wrote of "truth, liberty and the pursuit of happiness," but our Congress seems to believe in "deception, debt slavery and pursuit of more material items." Let's return to the fundamentals and, ironically, that means becoming "progressive."
It means leaving behind the material 1980's, the increasingly debt-ridden 1990's and the ridiculously out-of-control 2000's.
The Progressives are about a Congress that works together to achieve goals for the common good. Obviously, not everyone will be happy, but at least the common man or woman will be happier than heads of large corporations, special interest groups and lobbyists who contribute to lawmaker campaigns.
Greed and ego are not in the Progressive Party agenda. The Party believes that lawmakers decide on policy for the common good of the country--Education (including a financial education in middle and secondary schools); Affordable healthcare insurance for EVERYONE, regardless; Social Security for people 70 years and older; Medicare for 55 and older; letting big banks, small banks, big companies, small companies, anyone fail if they are insolvent, bankrupt or inefficient based on Generally Accepted Accounting Principles; deleveraging all of the toxic debt based on mark-to-market accounting rules so that people who invest know where they are putting their money; consistent risk and regulated costs in bank and insurance underwriting; and, most important, public campaign financing so that politcal officials--people in power--are not taking money to make important decision on the country's laws and regulations.
The Progressives believe in reducing the amount of debt available and balancing the country's budget, creating greater savings for consumers and the country and, for goodness sake, legalize marijuana--adding a heavy federal, state and local tax--like cigarettes and alchohol. Make it 21 or older. Make driving while drinking illegal--period. None of this .08 crap. Treat marijuana like alcohol. Unlike caffeine, it is unacceptable in public (except where there is a permit) and in the workplace. The "War on Drugs" money goes back into the Federal Government. Frankly, if people abuse drugs, that is their problem, their life and they need to be responsible for themselves.
The Progressives believe everyone has a right to a gun, but there will be a "War on Guns" like a war on drugs. All guns without permits will be confiscated; federal officials will seek out illegal gun dealers and incarcerate them. It will not be easy to receive a gun. It will include an extremely thorough background check. A person who does have a permit to carry a gun will then need to always provide the types of guns they purchase through legal gun dealers. Make it really hard for someone to obtain a handgun. For example, harder than for police officers instead of easier.
No world is a "utopia," but how much is enough in a world driven by rich, greedy people who only look at the highest earnings at the lowest cost? What is value at this point in today's world and, indeed, what do we value? People, prices or merchandise? What is the value of human life is that life is deemed valueless by health insurance companies and credit agencies--the same group that may even promote the Pro-Life segment of the population. What value is choice for Pro-Choice advocates if teen-age girls feel inferior to bulimic, air-brushed celebrities in magazines and on television.
That said, we should promote available resources for people in need of food, shelter and clothes--basic human needs must have significant government funding. The trillions spent on bailing out banks, starting wars and sheer entertainment could go to healthcare, homeless shelters, mental health rehabilitation clinics, which can include substance abuse centers for alcoholics, marijuana abusers and other people who decide they want to change their lives. Tax credits go to large corporations who put money back into Main Street, helping families and children see a future world outside of poverty, crime and gang warfare.
And, most important, this country must start "Green" manufacturing--electric cars, electric fueling stations, electricity, energy. Quit paying Saudi Arabia--home to legacy terrorists--for oil so that it can funnel down through its families to rebellious, spoiled and religious, fanatical brats like Osama Bin Landen, etc., etc.
And, while we are at it, let's quit giving validity to the term "terrorists," crazy religious fanatics, raising them above kids who kill 32 college students or seven high school students in classrooms around the country.
Here are some terms for ANY HUMAN BEING who kills a large group of people--"EVIL. ASSHOLE. DICKHEAD. INSANE." Did I say "asshole?" I don't care if it's for religious beliefs, political beliefs, low self-esteem, extreme pressure, the drug trade, organized crime, unable to pickup women, a man cheating, etc., etc.
If you kill a human being--or many human beings at one time--you are usually an extraordinarily evil person unless it is a military event in a war or self defense.
And, as a general belief, The Progressive Party realizes that life is relatively short so let's not take it too seriously because we are not on this earth for a very long time. Let's lighten up, learn to enjoy ourselves and each other for who we are and--if we are over the age of 18--try and behave like adults. Try to be smart. Be serious. Don't stereotype. But, have a sense of humor to laugh at ourselves and each other. We are only on this planet once--I think--let's enjoy ourselves here and realize the responsibility we have to others.
In general, The Progressive Party likes good people and we hate bad people, and we will work very hard to give the best in this world to the good people and protect them from bad people.
Now, who are good people? Ones who do no physical harm to others unless in self defense. Honest people who respect the rights and privacy of others. Who are bad people? Those who steal, cheat, do physical harm to others for no reason, kill people for no reason, disrespectful of their fellow citizens and disrespectful of privacy and rights of others. They are bad. I hate to sound like the elder George Bush, but Progressives "good," Democrats and Republicans "bad."
And, who shall be the first leader of The Progressives? My vote would be for the Independent Bernie Sanders from Vermont. Perhaps it might be my job to walk up to him one day, letting him know about The Progressives and hear what he has to say about it. "In every revolution, there is one man with a vision," I would say. And he would call the cops.
Unlike in Star Trek, there is no "device" to weed out enemies that allowed the bearded Spock to carry out his revolution. That said, the Deep Space Nine writers ended up screwing up the story anyway, as if Kirk made a mistake in telling Spock to change things and the Bajorans take over. Right. Like that would ever happen. Perhaps, in the end, future Progressives would screw things up, too, but the concept is true.
Just as CBS and NBC soon saw a third network on the horizon with the call letters ABC, the Democrats and Republicans may see the dawn of a new era. A group of leaders whose cause stands outside of their own agenda. It will be a new agenda for every man, woman and child in the United States of America. For the white, the black, the Hispanic, the Asian, the Jew, the Muslim, the White Anglo-Saxon Protestant, the Catholic, the Methodist, the Southern Baptist, the atheist, the agnostic, the mentally ill, the physically handicapped and the families in this land, a new agenda to promote security and courage in facing the future.
It is time to stand up for the majority of this population--not the moral majority--but to understand that the needs of the many outweigh the needs of the few. The common good must overwhelm personal greed and individual power so that each young person in America born every day understands during their lifetime that their existence has value beyond a dollar sign.
This is The Progressive Party--leading the way into a new decade, a new century, with the understanding that happiness is found, not from without, but from within. And true individual happiness can only be found through collective generosity to our fellow citizens. From there, we expand to diversities of other nations, creeds, colors and genders. We accept diversity--we do not fear it--and we accept change, flexibility and the future--we do not fear it.
This country needs a revolution--the world needs compassion, not hate--and out there, somewhere, is one man or woman with a vision to stand up and lead. To take the United States, and the world, to the highest heights.
Imagine a world working together--countries, continents and world leaders--with the common goal that we are all human beings in this lifetime striving to help each other, not hurt each other; to contribute, not overpower; to push each other to our highest potential...so that no human being may go poor and hungry.....and that we can all live a fruitful and fulfilling life....
Nah!
Happy New Year's everybody!
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