President of the Few Exaggerates Impact of Sequestration

Now I know that for many folk, the sequestration is either serious or not. Although I do accept the ramifications of the process, it is hard to get real involved in make believe political nuance. But as such, It is equally as hard not to weigh in on the inside the beltway kabuki theater we surmise as Washington politics. First, what get me is the big deal folk make out of this entire thing per an economic issue. If anything it is an issue of national security first and foremost (42 percent of cuts will come from defense). But I suspect this is what President Obama anticipated when he first proposed sequestration for whatever reason in 2011 (which in itself is another essay). I say this because I think he really believed that Congress would bow down to protect their cash cow “defense spending.” But they have since then taken his player card.

Truth be told from a federal agency perspective, it only $85 Billion (north of $40 billion this year), that they have to cut. I think what is missed mostly in all of this is that our issue really isn’t related to debt or the deficit, but rather credit and borrowing. Yes we spend too much no question, but ours is a credit problem – we borrow too much which makes economics ignore what is essential – that one can address the debt and deficit and encourage economic growth by leasing in on cutting wasted and duplicated spending.

Again it is just $85 billion. AIG got two times as much when the government bailed them out, yet we can find money to bailout Wall Street but not cut from what we already spend? I find that hard to believe because the average individual, family and small business owner, if had to, could cut less than three cents from each dollar earned without going bankrupt or homeless. I know less than 3 percent is possible from history alone. If FDR could cut the federal budget by almost 40 percent at the start of WW II in one year, surely we can locate 3 pennies of each government dollar currently spent.

Maybe this is why the theater. Three cents on the dollar won’t hurt if done correctly (end waste and duplication.) But if it hurt anybody it will be us, the poor folks in America who depend on services like head start and similar provisions. President Obama knew he was taking a risk, but instead of the wealthy he pretends he wants to tax, he put folk on the hook who live pay check to pay check, struggling to survive in poverty and who depend on head start on the hook as bait for house republicans. And they didn’t take it because they only grab on behalf of rich lobbyist (as well as democrats). Now we are back to Washington at its best, seeing that pointing fingers is more important to the administration and the congress than moving pencils and using erasers. The result is all outside in real America being stuck in the weeds on this matter.

In four days we will have Armageddon as the president describes it. Although all parties agreed to it, why is it Armageddon now and it wasn’t then? America outside the beltway isn’t growing fast like Washington, DC and Wall Street. Since looking at what has happened from 2009 to 2011, more than twenty major corporations have paid no income taxes. Including the likes of General Electric, Boeing, Verizon and Amazon [Amazon made billions in sales in 2011, while paying nothing in corporate taxes]. The reality is that since Obama has taken office, corporate taxes in the U.S., at an all-time low in which we see the most profitable companies paying nothing at all. Yet instead of fighting for the payroll holiday to continue President Obama did not fight for it, for these people were on the hook as bait. In 2011, Facebook made billions and paid not taxes yet was given a rebate of more than $400 million dollars the same year.

The fact is all of the above demonstrates that both the present administration and the members on the hill have only corporate interest at hand. Not only is it government for the few, it is also President of the few. Drake almost got it right, but I would say “we started from the bottom and we still here.”

Obama, Congress, Black Folk, the Debt Ceiling and Treasury Certificates

Let me preface this first by saying I am no economist, but I was blessed in the 10^th grade to learn economy from my teacher Dr. Moyer. He was my home room teacher also. Now I attempt to read anywhere from 20 to 30 newspapers around the world to stay somewhat informed on what is going on around me. The reason for so many is due to the fact I trust no single source and have a penchant to form my own conclusion. Although these include top shelf African American outlets including but not limited to Theroot.com, thegriot.com, and even one I write for, Rollinout, they seem to , if at all, write topically about the current debt and deficit debates in a sensational form that lacks a fundamental understanding of economics regardless if Keynesian or Austrian in orientation.

The last I read, the 14^th amendment made it unconstitutional for the United States to default on its debt. Not to mention a statutory limit was put in place in 1917 when congress passed the second liberty Bond act. But one would not pick this mention up from reading most papers. Nor would objectivism ablaqueate factual distinctions often left out in an effort to cover the story.

Sure they mention Moody’s and Standard and Poor’s dropping the nation’s credit rating, yet do not provide any historical perspective. The way I see it, a market evaluation on this issue would have seen the rating on US Treasury Certificates (short term bills issued by the Treasury that are issued at regular intervals with various maturities). Should have happened at least six years ago, especially as we see now how bond ratings before the crash three years ago were not very helpful. I mean as a nation we have been basically insolvent for a long time.

Right now as it stands, democrats and republicans are an embarrassment to folk like me, bread and butter and salt and pepper on eggs in the morning Americans. China is already in the process of downgrading the US' sovereign credit rating regardless of what the Congress does. This because no matter what is done, the fundamental problem is the US' inability to generate wealth and borrowing more is not a solution. Plainly stated, we have no loot or at least limited resources left for economic development. And for our largest debt holders, China, raising the debt limit is good for investors, but bad for China,

Now for the typical American, in particular black folks, we don’t seem to have any interest on the issue other than we just want Obama to win and that the republicans are the bad guys. Other than that we don’t know what this all about, or how it affect us or may in the future, or what the Treasury note has to do with this.

It would help if we knew what a Treasury note or Bill or certificate or bond was, but for most of us – it has nothing to do with them, just as what is going on in Greece, Italy, or Spain. Sad thing is that our publications don’t seem to care or even know how to present or write about the issues in a manner that would motivate people to learn or understand they are definitely affected by all this.

Right now, American big banks like Citigroup and Bank of America are down about 7and it is even worse for banks across the pond. BNP Paribas, Barclays, and Banco Santander are all down 13% or more and Société Générale is down 16%. Just last week the downgrade of Portuguese sovereign debt and renewed concerns that Greece will need about $100 billion by year’s end to remain solvent. Which means Italy could take a hit which will expose all the big US banks due to their over extension via toxic mortgage debts, the value of which continues to fall as the housing market continues to sink. Add to this the fact that many of these American finical house have made massive profits by selling insurance derivatives known as credit default swaps to banks in Europe, we should be able to see the problem: for this is the same activity that dropped AIG to its knees in 2008.

Now all I am saying is that these talks and hardheadness on the side of both Obama and the Congress only hit us little folk. Most of them are millionaires and won’t suffer. We can be certain of fuel, water, and food shortages for no particular amount of time as well as Oil Exporters increasing their cost in an effort to deal with the losses resulting in reduced values of US Treasury Bonds. Not to mention that the value of your dollar will fall even lower and won’t be able to buy as much and that the housing market will take an even bigger hit.

All I am trying to say I guess t is ok to be oblivious and think that what goes on in Italy or anything to do with how politicians attempt to deal with this problem doesn’t impact you. But it does, whether we know it or not.

May as well tax my farts

Yo, before I start, I wanna thank the President for revisiting and accepting that his recovery plan over looked the folks who produce 80% of the job creation in America – small business owners like me. I appreciate that, although many of us don’t have SBA loans and save our own loot to start our own businesses – like me. So you can still do a little more. Second, glad you finally addressed them original gangsters, I mean bankers I spoke about in my last post with respect to AIG. Now to make a lot of folk happy, press some criminal charges for their criminal behavior. But unfortunately, I have something else I want to say about one of your proposals.

Namely what you speak of in your recover plan (by now I am sure that everyone has read it) regarding legislation to create a cap and trade system on greenhouse gas emissions for the production of energy. Now dumb azz me wants to know what the fuck is a cap and trade system on greenhouse gas emissions? And why does it seems that Carol Browner seem to be able to foster this position without the economist on your team having a say so on this proposal?

I worry both about the short and long term economic impact of mandating energy company’s pay for the right to emit carbon dioxide. To me taxing the release of carbon is a carbon tax that will be passed out to folk like me who hurting the most. This is really just an increases in the cost of energy for not only will production and transportation cost go up but also the cost of staples such as food. For we all know the few manufactures left in America will either pass these costs along to the customer (higher prices) or layoff folk.

Obama’s administration is proposing goals and timelines for reduction of greenhouse gases, primarily carbon dioxide. If so, to me this is saying your recovery plan is designed to make unemployment higher and encourage less economic growth. Maybe the President should stop kicking it with the man who lost his own state when he ran for the Presidency and the self proclaimed inventor of the internet Al Gore. Because to me, this sounds like some Al Gore shit. That’s right; him and his folks are SELLING Carbon credits via his new company.

And don’t hate, all I am saying that President Barack Obama’s plan to raise taxes on greenhouse gas polluters (big industry) will just be a tax increase for all. I mean at least think that the possibility exist that these big companies as all normally do, will just mean higher electric bills. I’m sure the President will raise his anticipated $646 billion over 10 years, but at the cost of folk here who will have given a trillion dollars to big banks and Wall Street companies. Because derivative traders the likes that grew out of the Enron school of thought will end up with more loot in their hands - Wall St. crooks. Because this will have the greatest impact on the utility rates of states that depend mostly on electricity from fossil-fuels and them that produce fossil fuels for power generation. Then folk speak of transparency but I don’t see it since the after hour market trading will inevitably just raise up the cost. My query is why pick on carbon? Shit, there are a lot more pollutants more harmful than carbon like mercury and arsenic. I’m still trying to find out when CO2 became an environmental problem.

So for me, its just hard to figure out how the Obama budget will work or is factual seeming that it is purported on getting billions from a program that doesn't exist and for which no legislation is written for. Especially after reading the MIT report on the subject (which says you wont raise as much loot as the administration claims). Maybe I should be looking at Harlem Nights or Baldwin Heights or one of them other BET shows, or maybe even Chris Brown. Naw fuck the dumb shit, if I don’t keep on keeping on, they will be taxing my farts next – they admit carbon too.

the fat lady aint started singin' yet

For the record, tonight I am writing this without the assistance of Tequila and hot sauce – I know a shame. So If I make too much sense or not enough forgive me, for I left my wallet at the shop and I am eating black olives, brie cheese and drinking blueberry/pomegranate juice (dick hard food as I like to say). But for me it is a state of Emergency, especially since folk like Treasury Secretary Henry Paulson seems to always act ex post facto and put shit in place to deal with problems but not prevent them.

Now I will be the first to say I aint no investment banker nor am I an economist, but I read and don’t consider myself to be a stupid mother fucker. There are several things about the economy I want to point out. First, all of this shit has happened under the watch of republicans and all these chump bitch ass folk wanna do is put a band-aid on an amputated leg. And hate to say it, But Bear Stearns, Lehman Brothers and AIG is only the beginning of what is to come. I remember recently how Paulson said that the problem that we have is because “We have an archaic financial regulatory structure that came in place a long time ago, after the Depression. It really needs to be rebuilt."

From my understanding of history, the problem during the depression was stocks. Yep stocks, for back then they were not regulated as they are today. In the current economic picture, we got to deal with some other thangs, namely hedge funds and derivatives, which are a lot more complex and no where close in resemblance to the classic stock or bond. But like in the depression era when stocks went unregulated, today derivatives and hedge funds and what they call credit default swaps, can be bought and sold and packaged without ANY federal or state regulation (yawl economist and investment genius correct this layman if I am wrong).

No regulation, nada. And we came to this like I have said in many post before, due to many folks, but one I have yet to mention is Former Senator Phil Gramm. Yea, yawl know Jones, he said that Americans were whinning over the economy. He currently is McCain’s economic advisor and I must say with him at the helm, I can only see the economy getting worse. A few post ago I wrote about how he led efforts to pass the Gramm-Leach-Bliley Act in 1999, which served to reduce government regulations in that separated banking, insurance and brokerage activities that had been in place since the Great Depression. But more importantly to jones here was his role in getting the Commodity Futures Modernization Act of 2000 passed.

Now let me tell yawl about this. True, he is the VP of USB, a Swiss bank and one should expect such, but this was some sneaky and scandalous shit folk pulled mane because it made specific provisions that products offered by banking institutions would not be regulated as futures contracts – no regulations by feds or state governments, like stocks before great depression.

That’s another reason I say McCain is stupid, for picking a man who is the VP of a bank with 12 billion in losses last year as his top economic advisor and because McCain himself say he is learning economics by reading Alan Greenspan’s book – LMBAO. Not to mention Gramm aint write it but rather it was drafted by Wall Street lawyers. They do this shit via what are called structured investment vehicles and this shit aint even on the balanced sheets.

With the aforementioned and they way they keep they books, via Gramm’s help, we will never know what the actual losses are or will be. Add to that the way they cover this stuff is through another shady side bet called credit default swaps which are “expressly” deregulated via the Act mentioned above. Credit default swaps are the most widely traded form of credit derivative. They aint nothing but bets between folk on whether or not a company will default on its bonds. This is easy to do cause all the banks been doing is giving out mortgages for homes, bundling them up as securities and selling them to others

All I am saying is what we are seeing with Lehman Brothers, Bear Stearns, and AIG is only the beginning because these are based on faulty MBS. Next its gonna be credit cards, student loans and all loans – even private equity loans (corporations). Yep the fat lady aint even started to sing yet and we the tax payer got to pay for this and get the shaft with no Vaseline because the feds will bail these folk out and let the CEOs leaves with 100 millions and even pay for big company but not folk who loose their homes.

All I am saying is handle yours because it WILL get worse. But yawl don’t hear me though, but I bet you getting your toes done, smelling the microwave pop corn and talking about what you eating and dranking at some fancy retro chic Bar. Not me mane. Not me. Like I said, the fat lady aint even started singing, so I would advise you to stuff your mattress, at least a little at a time. vote

the vultures are circling

I was trying not to write until, or post until Thursday and I had some tight stuff too. But as yawl know I be on my loot and have spent most of this day transferring funds to locations overseas. First of all, give me my props, I have been talking about the future financial gloom for the past 2 years. I have also said that neither Obama nor McCain talked about such and when they did, they seemed to sound like first graders trying to outline the quantum mechanical principle formulated by Wolfgang Pauli in 1925 in his exclusion principal.

I mean, although yawl say Im boring, I have been trying to warn yawl for a while. But I recognized such was not as important as discussing lil wayne, Brittney Spears or Kanye West to many.

Briefly, in September of last year I spoke of the decline in the value of the dollar. Then in December I wrote about the 500 Billion folks appropriated on the Omnibus Appropriations Bill. In January I wrote about how the economy was gone be in shamble for whoever the next president was gone be. Later that same month I wrote about the fucked up fundamentals involved, or should I say thinking regarding passing a 150$ billion economic emergency rescue bill in an attempt to stimulate the economy. To me it was like giving a blood transfusion to a dead man. I even suggested like the Roman empire, whose economy really caused its demise, so would be rthe future of this country.

In March I started to drop game on the lame. I stated how important it was to have money outside of the US in places like say Seychelles. Especially given how our export trade deficit was approaching 60 billion annually. In April I had finally gotten the chance to read McCain’s, or what McCain called an economic plan and I wasn’t impressed. I also talked about another sign, of countries like Iran switching from the dollar to the Euro for pricing petroleum and oil. As well as the first on a few post on the Yuan and its impact on the dollar and china on our economy.

In May I took it a step farther suggesting the possibility of within two years, that the price of Crude Oil will be hovering around $200 a barrel. In June it was getting worse so I suggested in a post for folks don’t be surprised if the next war will be hear with folks running up peoples cribs stealing grits, gas and tuna fish. Followed behind how for me it was a recession and that only those in the future who were gone eat would be those who paid themselves and grew they own food.

In July I wrote about how our economy had not been this bad since the 20s and 30s, since now we have a domestic financial debt of more than 20 trillion dollars, with a national debt of 350% of our GDP. Especially since the government seems to think the constitution said we the corporation instead of we the people.Then I went on to talk more about my concerns with China and how the housing market aint been this bad in 70 years. And how it aint all on the government cause we common folk spend instead of save. Dont even add how we were being bought up by foreign countries and ten banks failing this year alone, one could see, from this minds purview, that the writing was on the wall.

This is why I am very rigid on both McCain and Obama. McCain, is likely the most false and stupid. Yesterday folk said the fundamentals of the economy is sound, to quickly follow with pointing fingers (which a leader does not do). I cant see anyone letting him get away with this, seeing he has 7 houses and his wife is one of the big whigs that makes loot off of such reckless behavior.


We cant keep bailing out the rich. It is not sound economics. And we dont have enough loot thanks to two wars and wasteful spending on Behalf of the past eight years, Of George Bush and deregulation started by Clinton - and throw in some international trade agreements.
What will be next? Well don’t sleep, Qatar and the Emirates and Saudi and yes, China is in the back ground like Vultures in the sky, ready to buy up all the waste of the Greenspan, Bernake, Bill Clinton and Regan and Bush crews fucked up. Like I said folk , this is only the beginning jones. Goldman Sachs Group quarterly profit plunged 70% over the last quarter alone. And before tomorrow, the Feds will likely give some bridge funding to keep Insurance Giant AIG solvent. And Don’t be surprised if WAMU and Wachovia be next this week. So look in the sky, no it aint falling, but the Vultures are circling. And don't forget, I told you so. Giess you can take a horse to water, but you can't make them drink. Unless they drinking an Interview with R Kelly on BET. vote