The US Government is Run by Monkeys

2009-03-21T11:03:00.000-06:00

Yet another plea:

Senator Hatch,

I am contacting you to request that you please reconsider your position of continued support for federal bailouts of irresponsible financial organizations that facilitated the economic meltdown that we find ourselves in today. The irresponsibility in which the TARP funds you supported have been handed out is sickening, including excessive "retention bonuses" to the very same executives whose short sighted ambitions drove their companies into the ground, and billions funneled to foreign banks through AIG, and more. I beg of you to please return to the fiscally responsible principles of your party which you, Bush, and just about the entire Republican party in Congress have abandoned this past decade. Let these large financial institutions fail and the free market principles our economy is based on will make the necessary corrections. These corrections may be painful in the short term, and politically difficult for those of you in power, but in the long run they will hasten our path toward recovery. As the large financial institutions fail, smaller, more agile and responsible ones will fill in the gap. That is how a free market works, and that is the how our economy was built. Assuming trillions more debt to bail out Wall Street is doing nothing more than delaying the inevitable and potentially bringing the Federal government closer to insolvency.

The Bailouts Continue

2008-12-29T21:05:00.006-07:00

Adding today's announcement that Henry Paulson and the treasury intend to take partial ownership of GMAC, the lending arm of GM and one of the largest consumer lending institutions in this country, the Federal government now owns a significant share in just about all areas of finance that affect our lives. These include Fredie and Fannie, for about 50% of all US mortgages, GMAC for auto and consumer loans, many large financial institutions (the Fed is still refusing to disclose the names of the financial institutions that it is handing out the 700 billion taxpayer dollars authorized by congress through TARP in October), our retirement (social security), unemployment, retirement medical care (medicare)... and you get the point.

In exchange for the Feds investment and continued availability of cheap money fresh off the printing presses (the Fed also agreed to recognize GMAC as a bank to allow it access to billions more taxpayer dollars through TARP), GMAC has stated that it will increase availability of loans to consumers to purchase new GM made vehicles. Wow, so now we can all rush out to GM dealerships and get loans on overpriced, poorly built, uneconomical, gas guzzling American built SUVs and other large vehicles and the government will be in a round about way extending the credit to allow us to do so. This in turn will stimulate the economy and bring us out of the terrible financial mess we are in, or at least that is what Henry Paulson and George Bush want us to believe.

The articles that I really enjoy reading lately are about all of the executives and CEOs of these banks, financial institutions, automobile manufacturers that are taking hundreds of billions of taxpayer dollars either through TARP or the FEC. Take for example, Kerry Killinger, CEO of Washington Mutual a big player in the subprime industry during the housing bubble and the largest bank failure in US history. During his tenure as CEO he pushed mortgage lending very aggressively with his "power of yes" campaign and this in turn led to the failure of the bank. But he walked away from that with a modest $100 million in salary and bonuses.... and trust me, this is no isolated story. Just about every financial institutions that has failed and/or taken money from US taxpayers via TARP including IndiMac, Freddie and Fannie, General Motors, and many others have been, and are being run by executives who continue to take in millions of dollars annually in salary and bonuses while normal employees are losing their jobs by the thousands.

But for all of my pessimism and sarcasm, I really do fear that we are at a major turning point in the history of this country. I fear that the day of insolvency for the Federal government is imminent, and approaching increasingly faster under the reign of Henry Paulson, George Bush and our democratic controlled congress with their shortsighted "lets borrow our way out of this problem and throw out the free market principles this country was founded on" attitude. Our Federal government is living on borrowed time and borrowed money, and that cannot last forever.

A Senator with some common sense???

2008-09-25T20:02:00.004-06:00

It appears there may actually be a Senator in congress with some actual common sense! I honestly can't believe it... as you can see in my previous post, I had contacted Senator Shelby with a somewhat sarcastic message expressing my opposition to the Wall Street bailout currently being pushed hard by Bush, Paulson and Bernanke... and low and behold, Senator Shelby came out today stating there is "no deal". I really hope he continues that stance. Below is my follow up/brown nosing message to him:

Senator Shelby, I emailed you on Saturday opposing the Wall Street bailout and mortgage socialization bill being pushed by Bush, Pauson and Bernanke. Today I was very, very glad to hear that you are standing your ground in opposition to this terrible waste of taxpayer dollars. Please, please continue to do so! I don't know why so many republicans, Bush included are pushing this so hard... it contradicts so many principles that this country, the constitution, and the Republican party are based upon. By not allowing this bailout to go through I am certain there will be more pain on Wall and Main street... but that is what needs to happen... that is the free market at work flushing the garbage out of the system. Our country will bounce back and we will have 700 billion dollars less debt to pass on to our children. Thank you for taking the moral stance on this issue. I am very grateful for your service.

The Trillion Dollar Bailout

2008-09-19T10:20:00.005-06:00

Wow, I really didn't see this coming. The Fed and President Bush in all of their wisdom are now proposing a complete bailout of Wall Street and just about every greedy soul who was involved in and profited from the housing bubble. The cost to taxpaying Americans for this will be enormous, probably in excess of 1 trillion. Here is my response to this bill in the form of an email I sent to my Senators:

Senator Sessions,

I just wanted to clarify my understanding of the bailout plan currently being proposed by President Bush, Mr Paulson and the Fed. I know this is a large, complex and unprecedented situation, but this is how I understand the root cause and proposed solution in very simple terms:

1. Wall Street investment banks decide to loan anyone who could fog a mirror money without checking if they could pay it back (an make a huge profit in doing so)
2. Some mortgage broker and REALTOR talk Joe Walmart employee into buying a home he can not afford (and make a huge profit in doing so)
3. Joe stops paying his mortgage because he can't afford it
4. The bank loses money because Joe is not paying back his loan
5. The government steps and uses taxpayer money to buy the bad loan from the bank so they don't lose any more money
6. The government uses Fannie Mae to write down Joe's mortgage by 50% so he can afford to stay in the home he should have never bought in the first place (Joe gets a house at 50% off complements of the US taxpayer)
7. Average responsible American taxpayer foots the bill for all of this

What I don't understand is how the any politician, and in particular Republicans, can justify spending what could be over a trillion dollars of taxpayer money to bailout Wall Street and individuals who made poor financial decisions. Please support me and thousands of other average taxpaying Americans by voting NO on this bailout!

Respectfully,

The Rise of US Socialism

2008-09-17T06:40:00.003-06:00

I guess the Fed has decided to throw out all of those old fashioned capitalistic principles that our country was founded on. With the US taxpayer funded bailouts of Bear Sterns, Fannie May, Freddie Mac, and now AIG along with hundreds of billions of taxpayer dollars now loaned out to banks like WAMU backed by worthless mortgage securities, the US is looking more and more like the communist USSR than the world leader of capitalism and democracy. The Federal government now owns about 1/3 of the nations' rapidly foreclosing homes and condominiums (about 5 trillion dollars worth), backs our insurance policies, provides our retirement income and medical care, and so much more. Where is all the money coming from to fund these vast programs you might wonder, out of thin air... borrowing, borrowing and more borrowing. The federal government deficit for 2009 is estimated to be in the neighborhood of 1/2 trillion excluding the military operations in Iraq and Afghanistan and based on the governments "funny" accounting rules. However, including the military operations and using more traditional accounting rules, that number is more likely in the trillions. In fact, according to most intelligent economists, including Alan Greenspan himself, federal deficit spending is completely unsustainable. Unfortunately our politicians don't have the moral courage to do anything about it... instead they prefer to dig our country deeper and deeper into a hole that we will never be able to escape.

The Continuing Economic Collapse

2008-07-04T00:56:00.005-06:00

While the US economy collapses, the congress, president Bush, and the Federal Reserve continue to believe that their persistent policy of dollar devaluation, wall street bailouts, and exploding deficits will somehow pull us out of it. Today, Reuters reports that the Federal Reserve's portfolio of Bear Stearns assets has lost 1.1 billion since it collapsed... but I though JPMorgan Chase acquired Bear Stearns you might be wondering... while sort of, they actually got a pretty sweet deal from the Fed and US taxpayers... they got to acquire most of the good Bear Stearn assets, while the Fed (aka US Taxpayers) took on the responsibility of over $30 billion of some of the most risky parts of their portfolio (the stuff that JPMorgan did not want to touch). So essentially, each American (all 300 million of us) could potentially be on the hook for $100 each if the Bear Stearns assets were to completely fail. Good job Fed, way to protect the economy and the dollar.

You also gotta love the Senator Dodd (the guy that got the "Friend of Mozilo" discount on his Countrywide mortage) sponsored foreclosure bill at a cost of 300 billion to US taxpayers ($1000 per citizen). This incredible piece of crap bill really smells foul. It will basically allow the FHA to purchase loans that are heading for foreclosure from banks whereby the terms can be modified to supposedly keep the homeowners out of foreclosure. What it really amounts to, however, is US taxpayers footing a huge portion of the bill for banks that made bad lending decisions and home buyers who bought too much home (often fraudulently by lying about their income). Last time I checked, I thought the US economy was based on free market principles... but I guess not. I say let all speculators, investors, families, whoever, who aren't smart enough to understand that buying a home that costs 10x your annual income is a bad financial decision, lose their homes. They will rent for a while, the banks will take a loss, and we will never be in this predicament again.

And on to inflation... $4.12 for a gallon of gas, groceries up 5-25%, home prices still up 50% from 2000, and much more... all while average wages have remained mostly stagnant this decade. These costs are hitting low-mid income Americans hard because they are necessities. Yet, if you ask Bernanke if inflation is getting out of control he'll tell you its not a problem... it's all the darn speculators driving commodity prices higher, not his intentional devaluation of the dollar.

But with all this, and the continued job losses (60,000 for June), have no fear, for Bush and his crony US treasurer Henry Paulsen tell us everything is going to be alright! The economy is coming back. Oh, how very wrong they are!

2008-03-25T16:40:00.007-06:00

Sure, I don't like him or most other politicians, but he happens to be the most competent of our two esteemed Utah senators (Senator Bob Bennett being a complete idiot), so although it is probably a complete waste of my time, I decided to shoot him off a letter about my feelings on the economic collapse we are experiencing.

Senator Hatch,

I am contacting you again regarding the collapse of the housing market and forthcoming recession. I wrote you approximately 1 year ago regarding this same issue and your response stated in a nutshell that you were not overly concerned about the issue because Mr Bernanke had testified to congress that he did not foresee any spillover of subprime into the overall economy. Now that that myth has been entirely disproved, and we are without a doubt experiencing significant fallout on both Wall St and Main St I wanted to contact you again to express my disappointment with the the Federal Reserves handling of this situation. Here are my concerns:

1. The Fed is intentionally debasing the dollar through continued interest rate cuts to attempt to resolve the credit crisis. This policy in turn is leading to very high inflation (NOT core inflation which excludes food and energy) on items that average middle class families need in order to survive such as gas (now approaching $3.50/gallon in Provo), electricity, bread (wheat prices have tripled in the past year), etc.

2. The Fed is bailing out Wall St but doing nothing for Main St (I don't think either should be bailed out) by allowing securities firms to use their worthless mortgage backed securities to borrow directly from the Fed (thereby putting taxpayers potentially on the hook should they fail), the bail out of Bear Sterns masqueraded as a buy out (Fed assumed risk of losses to JP Morgan resulting from Bear Stern bonds)

3. The value of the dollar is plummeting... with China's currency increasing in value and our plummeting, I think we will start seeing inflation even on cheap imported goods

4. A federal deficit that has jumped from 5.6 trillion to almost 10 trillion since Bush took office

As a middle class father of 4, I have to tell you that it is getting more and more difficult for me to support my family. I am fortunate enough to have been able to get a college degree and have a somewhat stable profession and income. I can tell you, however, that many of my friends and family members are really struggling to get by due to inflated housing costs and increasing energy and food costs. I would ask you please to use your position to discourage the Fed from continuing to decrease my wages through a policy of dollar debasement and to stand up to any bailouts using taxpayer dollars, especially to the same Wall Street firms that have played a significant roll in creating this mess in the first place.

Thanks you for your service and your time.

Sincerely,

Bear Sterns Bailout

2008-03-17T00:16:00.006-06:00

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited,” - Ben Bernanke - Federal Reserve Speech - 5/17/07

Well, here we go with the government bailouts. The Fed and US government recognizes that the American people will most likely not stand for a direct bail out of homeowners, but also realize that they can get away with bailing out Wall Street through complex loan deals, interest rate drops, and financial arrangements that no average person can comprehend. It is great to know that our government is so willing to bail out these firms and their buddies who work there on the backs of the middle class of America. By continuing to lower interest rates and loan Wall Street hundreds of billions of dollars (much of which may never be paid back), the Fed is intentionally trying to get themselves out of this mess by decreasing the value of the dollar. Warm up those printing presses Bernanke, you are going to need them... I believe Bear Stearns is just a small spring shower while the big storm clouds of Freddie and Fannie are rapidly approaching. Middle class, get ready to take it in the pants as the value of our wages drops precipitously due to continued inflation on the prices of goods and services that we actually need in order to live like gas, food and electricity. We may also start to expect some nice big tax (or "fee" as Schwarzenegger likes to call them) increases to make up for our government's wastefulness and inability to plan for a rainy day. Happy times!

Presidential Candidates Summary

2008-03-15T14:20:00.007-06:00

Here's my brief summary on each of the remaining 3 major presidential candidates:

John McCain
A crankier, more stubborn, humorless, but more intelligent and definitely more military savvy version of G.W.

Hillary Clinton
An intelligent, but very arrogant and extremely annoying finger wagging liberal who nonetheless would do a heck of a lot better at running this country than G.W.

Barack Obama
Intelligent and inspiring, but full of populist and unachievable rhetoric. It seems to me that much of his support comes from white liberal weanies who feel good about themselves voting for a black man. I don't think putting a black man in office will make up for hundreds of years of prejudice and racial discrimination, but I guess you have to start somewhere. I'll probably end up voting for him anyway... unless Lou Dobbs or Ron Paul decide to run as a third party candidate

Upgrading from a Lexus SUV to a Honda Civic

2008-03-15T13:35:00.010-06:00

A few months back I got a new job that required transportation (previously we owned only one car because I was able to walk to work). I don't know what exactly I was thinking at the time, but we ended up purchasing a 2002 Lexus LX470. Now, I have to say this is one nice vehicle... having never owned a luxury car before I was completely taken by the leather seats, wood steering wheel, 54 speaker surround system (or whatever it is), DVD and navigation, sunroof, etc. So I got the car and a nice big monthly payment to go along with it. I have to admit, it was very fun to drive around, but over time the newness began to wear off and I began questioning whether the $75 fill ups, monthly car payment, and high insurance were really worth paying for something that I spent only about 1 hour a day driving to and from work in. I also had this nagging and very annoying feeling (partially exacerbated by my wife and super-frugal accountant brother) that I was living beyond my means, being wasteful and unnecessarily polluting our already very polluted environment here in Utah county. So, with these factors in consideration I sold the Lexus this past week (at a $2500 loss I should add) and purchased a 1999 Honda Civic for $2800. So here are a few things I have taken away from this experience:

1. Lexus vehicles are really nice!
2. Big car payments are a pain in the a
3. High gas prices are also a pain in the a, especially when your vehicle only gets 13 MPG
4. I don't feel right driving around a nice car that I don't even own
5. Honda's get better gas mileage
6. Small Hondas and Toyotas are the vehicles of choice for liberal weinees
7. Buying a car with cash feels really good and responsible
8. Now I can brag about being frugal, responsible, protecting the environment and above all feel superior to other people who are not
9. I'm now doing my part to fight global warming
10. I'll probably die if I get in a serious car accident with a larger vehicle
11. When you bring home a nice car, it really gets your neighbors talking and wondering where you get your money
12. My ultra-frugal accountant brother is going to be very proud of me (although he'll probably rub in the fact that this is what he told me to do in the first place)

The NAR is also Run by Monkeys

2008-03-15T01:26:00.008-06:00

For those of you who don't know, NAR is the acronym for the most corrupt cartel in modern history, the National Association of Realtors (TM). This is the organization that tells us in all of their fancy commercials that we should be honored to pay them 6% of the price of our home just to have them put it into their proprietary classified ads and help us sign a few forms. Granted, Realtors (TM) themselves can be very nice people... but the fact of the matter is that they are completely overpaid for the work and very minimal expertise that they provide. The NAR is consistently a top special interest group, paying out almost 4 million during the 2006 election season. In return they have been rewarded with legislation and the support of our politicians that allows them to maintain the monopolistic and extremely lucrative practice of extorting 6% from just about everyone that needs to sell their home.

Anyway, the point of this post is to highlight what I consider to be some very hilarious remarks from the infamous chief "economists" of the NAR who are really nothing more than paid cheerleaders and shills compensated handsomely through Realtor (TM) association dues. They, along with the National Association of Mortgage Brokers (NAMB), National Association of Home Builders, banks, investment firms, and of course the Federal Reserve, Congress and G.W. will go down in history as the cause of the largest asset bubble in the history of the world and the ensuing economic collapse that resulted because of it.

Lawrence Yun:

February 2008

"The NAR's chief economist, Lawrence Yun, said the market is 'scratching the bottom,' with sales holding at a deflated rate of around 5 million units for the past several months."

November 2007

The market for existing homes is "hitting the low right now" and heading for a "modest recovery" next year...

David Lereah:

January 2006

"The market is in the process of normalization."

"The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead."

April 2006

"Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau."

"This is additional evidence that we're experiencing a soft landing."

July 2006

"The market should even out just below present levels."

"The market is stabilizing."

October 2006

"We expect sales activity to pick up early next year."

"This is likely the trough in sales."

January 2007

"The good news is that the steady improvement in sales will support price appreciation moving forward."

"It appears we have established a bottom."

March 2007

"Sales have hovered for the last four months, scratching bottom and then coming up, scratching bottom and coming up again. We are comfortable this is now the bottom"

Core Inflation

2008-03-15T01:07:00.004-06:00

How in the heck can Bernanke and the Feds justify excluding energy and food when calculating core inflation! Let's see... I have to feed my family, and I have to drive to work, heat my house, etc. However, as gas approaches $4.00/gallon, the cost of wheat has tripled over the past 10 months, eggs are up 25%, milk 17% and so on, Bernanke will continue to depreciate my wages by lowering interest rates and devaluing the dollar (in order to bail out Wall Street investment firms) because core inflation does not include these statistics and thereby provides the Fed with justification for them to do so. I guess I should just be happy that I can still buy that DVD player at Walmart for $79!

Weekly Summary of the Crashing US Economy

2008-03-15T01:03:00.005-06:00

Here are some highlights from the crashing US economy complements of GW Bush, Alan Greenspan, Ben Bernanke and our other crooked Washington public servants. It is nice to see who their most important constituents are: Wall Street buddies and special interest backed corporations who they will rescue at all costs, including through intentional devaluation of the dollar which will hit hardest on the backs of the middle and lower class. This is like watching a car crash in slow motion. Prepare yourselves for some very tough times ahead!

Bank Collapses:
"Bear Stearns Cos., teetering on the brink of collapse from a lack of cash, got emergency funding from the Federal Reserve and JPMorgan Chase & Co. in the largest government bailout of a U.S. securities firm."

"Now we know. The Federal Reserve will not hesitate to bail out Wall Street firms that got into trouble because of their involvement in mortgage-backed securities."

Crash of the US Dollar:
"The dollar remained under pressure Friday after touching new lows against the euro and Swiss franc, undermined by cool inflation data and weakness on Wall Street as the market digested news of Bear Stearns Cos.' bailout."

"Negative dollar sentiment is growing in nations where the dollar was historically accepted as equal or better than local currency — and dollar aversion is even extending to some quarters in the United States."

Soaring Gold and Oil Prices:
"Gold breached the $1,000 a troy ounce mark this week, marking a significant milestone for global financial markets, while oil prices extended their run above the $100 level as the dollar plumbed new lows."

Crashing Home Prices:
"Southern California home prices are now 19% below their peak last year. Home values also plunged 19% during the last real estate bust, but that was over a six-year period ending in 1997. Prices have now fallen just as much in less than a year."

"The rapid pace of the decline has led Los Angeles economist Christopher Thornberg, who last year predicted a 20% decline in Southern California home prices, to revise his projection. He now thinks prices will fall 40%"

"Home prices plunged to their lowest levels in four years in February as sales slowed to a crawl in Sonoma County and across the Bay Area. Sonoma County’s median price tumbled to $400,000, down 22.3 percent from a year ago, the biggest drop in the Bay Area. It is the lowest since February 2004, when the median price stood at $390,000."

Slowing Consumer Spending:
"US consumers cut spending in February, and the labour market continued to weaken, suggesting the household-spending pillar that had supported the economy's expansion may be giving way."

But don't worry, here are some comforting words from our president:
"Speaking just hours after the Federal Reserve helped to engineer a rescue loan for investment bank Bear Stearns, Bush said that, although times are tough, the economy is resilient."

"Bernanke is doing a good job, he said."

Amen! Thank you Mr. President... January 2009 cannot come soon enough!!!

The US Government is Run by Monkeys

2008-03-15T00:40:00.008-06:00

As a closet political junkie, I just can't take it anymore. I have so much pent up frustration with the way my government is being run that I feel like I'm going to explode. I'm starting this blog as a means of releasing some of that tension. I don't pretend that this information will be of any interest to anyone, but nonetheless I will sure feel a heck of a lot better getting some things off my chest.

First of all, you should know that I have no political affiliation... so if you are a Koolaid drinking Republican or Democrat please go back to listening to Rush Limbaugh, Al Franken, or whoever else floats your boat. Due to my upbringing, I was a ditto-head Republican until about a year ago after reading Lou Dobbs "War on the Middle Class". It was at that point that I started questioning my beliefs and came to realize how truly corrupt, self-serving and incompetent most of our politicians are on both sides of the isle. If you have ever seen those careerbuilder.com commercials, our government really is run by a bunch of monkeys!

A little about me... I'm a middle class, happily married, father of 4 children who are my pride and joy. I'm currently enlisted and happily serving in the National Guard. I live in the redest of the red states, Utah (no I'm not one of the 92% who voted for Romney), yes I am Mormon, and no I do not have multiple wives. I'm cynical, untrusting, sarcastic, reserved, patriotic in an non-red-neck way, and have very moderate political views.

Happy blogging!