Obama Bernake & Bush Greenspan

I am not quick to second guess folks, but I am astute enough to use reason to figure out stuff. Case in point is this bailout. I know have harped on this and the economic recovery act and these artificial efforts to stimulate an economy with no production or manufacturing base both for the current and pass administrations, but I still just don’t get it. It is like they do not or have never run a business as I do.

The way I figure we should as a nation, produce more and consume less. This is simple supply side and cost revenue accounting, they way most small business folks and family keep their books at home. It is just hard for me to see any difference economically from the methods of Obama Bernanke and Bush Greenspan. Yep they both need to be one person since both are connected to the hip with their Federal Reserve namesakes.

The problem is that these pair of two headed Cyclops thinks that it is ok for Americans to go around, at the expense of our own loot, with foreign money. This is some of the backwardsist azz shit I have ever heard. Hello, credit got us into this problem. It seems that all we care about is credit, from the administration to the common man. On the top end, it will most likely lead to some sort of hyperinflation and on the other – we just want a credit card where we can put a pic of or children or cats and dogs on.

Obama said that credit was the life blood of our economy. I would like to disagree. Credit is just what got us into this mess, servicing debt, complex financial instruments that go unregulated and the reckless Federal Reserve Bank that is just borrowing more and more money while making the fake ass artificial interest rates that seem to only benefit Wall Street. I say this because every where I look I see declining wages as well as declining competition because that’s what bailouts do. I just don’t get it, I mean albeit I wrote my name in on the presidential ballot, I did believe Obama mantra of change, but unfortunately it is more of the same, for I can see no difference between Obama Bernanke and Bush Greespan. Please folk; don’t confuse the policy with popularity.

ice ice baby

There was no football on tonight, and I did not look at the debates either for I felt I would one, be disappointed in Obama and two, McCain would confirm that he has a semblance of post traumatic stress disorder. Instead I did a few stochastic models of how much this pork, I mean bail out would cost us. I wanted to post it but couldn’t put the equations on my blog and better yet thought folks would not pay attention so im gonna write about something else.

Im tired of talking about the economy and the banking system on their own, but I got a few more things I would like to shit out of my brain. I have mentioned the Commodity Futures Modernization Act a few week ago in a post and attributed a lot of this current mess to it being slid in a omnibus appropriations act by the Senator Phil Gramm of Texas and signed into law in 2000 (Got damn Bill Clinton).

The Commodity futures modernization act seemed to have been designed to help two types of folk - banks and oil companies. Before it was signed into law, back in the old days, commodities were regulated. This regulation namely occurred under NYMEX, the New York Mercantile Exchange. NYMEX was the only and largest and principal spot for the commodity futures exchange in the World. But once the Commodity Futures Modernization Act was signed, it allowed for private entities such as oil companies and banks to trade futures without regulation. Again thanks to Phil Gramm who added a loop hole to the bill. Specifically a loop hole that allowed for the electronic trade of buying energy (like oil) in unregulated markets outside of the United States and the jurisdiction of the Commodities Futures Trading Commission. They call this the "Enron loophole" which I stated prior "was codified” via the Commodity Futures Modernization Act of 2000.

Im not just Blaming Senator Gramm and Bill Clinton, for then Fed Reserve Chair Alan Greenspan wanted this as well. Gramm did this for one of his large donors, specifically Enron (remember them) and the Act was designed to keep regulators from controlling space-age financial tools called credit "swaps." Just like sub-prime mortgages, swaps are bundled up and sold as securities. The Act also made it impossible for state and federal oversight boards like NYMEX or the Commodities Futures Trading Commission to examine investment banks or hedge funds to make certain they had the assets necessary to cover losses they were supposedly guaranteeing.

With Enron, we saw how the company shifted the trade of electricity online and as well what happened. Likewise, Oil companies and investment banks followed suit. Crude Oil was not introduced into the futures trading market until 1983. This is when we started to see how such speculation impacted the price of oil and ironically, we did not see the prices go up as before until 2000, when theses companies started to manipulate world oil prices and again ironically the same year the CFMA was signed into law.

Unregulated exchanges got us into this mess. The prefect example was when the Intercontinental Exchange (ICE), which has its headquarters here in Atlanta, came into existence. A tight knit bevy of Banks and oil companies including the likes of BP, Shell, Total, Morgan Stanley, and Goldman Sachs started the ICE. As of today, the ICE is probably the leading online marketplace for “global commodity trading, primarily of electricity, natural gas, crude oil, refined petroleum products, precious metals, and weather and emission credits.”

The real problem occurred when these said banks wanted to get in on the game too and started purchasing oil fields, pipelines and refineries which meant these banks, were now also considered commercial traders and that they could make such trades unregulated. This means that they could produce, distribute control and trade without scrutiny, what they themselves owned, meaning they could control prices as well – talk about a monopoly.

This is one of the reason why I cant understand the logic of folks who say drilling is the answer to our domestic and national security, I mean how stupid are Palin and McCain, who talk about drilling, when we wont see no final product for another ten years ago and when these banks and big oil companies can sell or trade oil anywhere around the globe.

This is why I believe Banks on Wall street don’t need to be bailed out or “rescued” and why Big azz Oil companies shouldn’t be getting am tax breaks when they really need to be taxed up the azz. They supposed to pay us royalties when ever they drill on our (public US lad) and they don’t. In fact many operate lease free. I cant do that as a small business owner, I have to pay for what ever space I uses as my retail outlet. Every time I re-read the CFMA I get sick to my stomach and think of Vanilla ICE, who sang that song Ice Ice Baby. They say he from Texas, I wonder if he was trying to drop us a few hits back in the day of things to come. vote

That’s makes 10

Things are not as rosy and the democrats and republicans are painting them. Unfortunately the outlook proffered by them economically is not presented as serious as thing are on the really real. Down here in the dirty, in Georgia in particular, we got wind that another bank/lending institution failed. Yep, Integrity Bank of Alpharetta, Georgia.

This is the 10^th US bank to fail this year. Many of these are in my mind a result of what I wrote about before as well as dumb ass Federal Reserve policies proffered by Alan “the green hornet” Greenspan, Bill Clinton and Both the Bush’s. Oh and Ronald Regan too. And specifically, from this savants purview, of how Glass-Stegall removed the barriers between Wall Street and Banking Institutions. Throw in a floundering real estate market, foreclosures up the azz and the worst decline in housing since the Depression, I figure we are only seeing the start of this avalanche.

This year alone, the following banks closed/failed: Columbian Bank and Trust of Topeka, Kansas, First Priority Bank of Bradenton, Florida, Reno-based First National Bank of Nevada and Newport Beach, California-based First Heritage Bank; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas; Hume Bank in Hume, Missouri; and Douglass National Bank in Kansas City, Missouri. Add to this that I think the first bank to fail when the housing market started to slump was Net bBank, also headquartered in Alpharetta, Georgia.

Then since the FDIC don’t do nothing to protect or warn the general public outside of insuring depositors up to a certain dollar point, they just reported that the have classified another 117 banks as being a problem for the second quarter alone (30% more than the previous quarter).

Since 2000, the FDIC had closed 36 banks since October 2000. In 2002 alone there were 11 banks that closed and before, in 1994 12 banks closed. The very fact that these institutions are failing is a major concern for me because such is deflationary in essence. By deflation I am referring to a reduction in general price levels that are due to a reduction in the supply of money. This is often due to reduced spending at the government and individual level as well as a drop in the level of investments. The consequence of such mainly seen in increased levels of unemployment.

Like I said, the current presidential candidates don’t seem to talk about the economy in tangible terms but more in chic rhetoric and sound bites. Correct me if I am wrong, but I have yet to read any economic statements that even talk about the threat of deflation or the state of the banking and lending institutions in our great country, have you? This is number 10, any bets on how many more will be gone by the end of the year? Maybe there will eventually be one big super bank – like in old school China or Russia. vote

THIS IS FUN_NY

Body Blow, Body Blow, Body Blow

Yo, I must admit, in grad school I played video games, Madden and this boxing shit. What I remember about the boxing game was that when u would hit folk, it would say stuff like “body blow, body blow, head shot, body blow.” I like-ed that shit.

I am reminded of this because I feel that it is the perfect introduction to our economic concerns as we are all citizens of the united states of America, now true, I was gonna post on something I wrote this morning called “WORK HARD AND DONT COMPLAIN.” But after reading the comments to the previous post by the scholarly Jay MidNite, Kelso (and he has interest) and No slappz, I digress. Again, blame my pons, and throw in the sulcus of my medulla oblongata and my subsequent Glossopharyngeal nerve anatomy (in picture) while u at it.

Mane, Jones here love him some loot. And as a person that has adapted capitalism for his own well being, I take pride in using brain cells to do such, just as much as I do showing love to others. But it seems as if my economy don’t got no love for folk no more. I have personally documented several contusions to my efforts to accrue capital albeit I will not be denied.

First, the housing market is basically a bust, and it aint been this bad in 70 years. As of date houses prices have dropped maybe 15 to 20 percent in real terms and its only just beginning. Before it is all over, if you pate 100 stacks for a crib, it may end up being worth 70 stacks. Add to that the credit crunch which I figure is the worse since the post war period thanks to Sir Alan green hornet, I mean Span – which I wrote about a few weeks ago. I mean when folk loose a trillion dollar globally, it makes me think that one is in serious trouble; and don’t trust what am mother fucking bankers say. Then there are oil prices coupled with equity dropping like its jumping out an airplane. Just tell me that we got to work a lot longer to buy gas, let alone a barrel of oil. So as jay said, it dont matter, Europe at 10$ a gallon and we gon finally reach the rest of the developing world -yawl aint ready though.

The strange thing to me is that households are paying interest rates no different than in the past. Sure we just got some stimulus checks, but they will only last and benefit one quarter – the second. Yep, it is good; I mean a 100 billion for one quarter but when it is gone what happens next?

All I am saying, and Jones here aint no economist, but rather a single man that like saving and counting money, for money is to make money and not to spend. We don’t even contribute to global GDP growth, but rest assure, the rest of the world does when we cant and will move alone.

The US has weakened for past to years when the rest of the world has shown increased growth and in most cases accelerated economic growth. Europe, Japan, China, and don’t add Arab countries. Not to scare yawl living like life is all that, my query is if the rest of the world can find economic growth, why cant we folk? Cause all I’m seeing and feeling is body blow, body blow, head shot and body blow.