On the Contrary, or, More People Being Wrong

March 3, 2009 at 10:44 pm | Posted in Business, News, TV | Leave a comment
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I have heard, today, two of the more chilling opinions on the future of our country.

The first: Robert Sheer on KCRW’s Left, Right & Center this week (I listen in Podcast form and thus am always a few days late) lambasting the banks for having the audacity to raise interest rates on their credit card customers after they miss payments. Almost more shocking – the banks are limiting consumer’s credit or even canceling their cards!

A bit of a tirade, if I may say so, on how banks shouldn’t be doing this to people that had lost their job, or were dealing with health issues, or had, I don’t know…stubbed their toe.

Hrm. Have we really arrived at a moment in this country’s history where the ability to spend money that you haven’t yet earned has become such an unassailable right that a company is wrong to tell you that:

a) We can’t let you to spend that much, because you can’t, you know, mathematically, ever pay it back, or

b) We’re going to have to charge you more to do so, since you know, mathematically we know you’ll never pay it back so we have to earn money from you somewhere.

Even more disturbing, later:

Rachel Maddow debating Duke Energy CEO, Jim Rogers, on the President’s proposed Cap and Trade program for carbon credits. Rogers is in favor of the idea, and the outcome, but made a very reasoned argument that the plan should be phased in so as not to produce a 40% price increase in a single years for consumers.

To this, Maddow asked if Duke Energy was profitable last year. 

Yes, Rogers replied.

Why not just cover the increase costs in your profit and lose money for a few years until emissions decrease, then, Mr. Rogers?

Is what she said.

Out loud.

Like, with her mouth.

As Duke Energy, one of the larger utility employers in the country, hemorrhaged money in support of this new government policy, how many jobs would be lost? How far would the stock value decline, and how many kid’s college funds or grandparent’s pensions (full of Duke stock) would get sucked right down with it?

How quickly would it be before their bonds were de-rated to junk status and their cost of debt became so high (stop me if you’ve heard this one) that the company became completely fiscally insolvent? How long after before this mega-industry (the utilities) was standing in line for a government bailout, another casualty of well-intentioned government policies that are financially untenable in a global economy?

She concluded, rather rudely, actually, by implying that since Duke Energy enjoyed all of the benefits from polluting the environment (by building government encouraged coal plants in the 70’s – stop me if you’ve heard this one), they should have to lose money as a form of apology to the citizens that had to live in the polluted environment.

Really? Duke Energy enjoyed all the benefits of cheap, mass electrification in the US? All of them?

Methinks you would sound a bit less silly saying that if you didn’t do it from a brightly lit neon room full of 600-watt plasma televisions.

This I cannot abide

February 11, 2009 at 10:26 pm | Posted in Business, News | 1 Comment
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It just keeps going on, and on, and on. Captains of industry paraded in front of Congress so that they can be demeaned and insulted. Witness the latest, from the fine Democratic Congressman Michael Capuano.

He has no questions. What he does have is a misdirected, ignorant, intellectually dishonest rant. Why? Because it’s easy. That’s it. There is no desire for the greater good. There is no search for truth. 

These morally bereft ass-clowns, these professional panderers, will tear down this group of people for no other reason than the fact that they have suddenly found that they can. Can you imagine the stones required to sit in the United States Congress and insinuate that these CEO’s should be prosecuted and imprisoned for trading Credit Default Swaps, when you yourself signed the damned law that made it legal to do so??? 

As usual, Wonkette nails it:

Which leads us back to Michael Capuano’s rant today, about how he “thinks” credit default swaps and such are “illegal” — it is his opinion! — and “cannot believe” that people who’ve used them haven’t been prosecuted. Well let us help you figure out why, Mister Congressman!Here’s the roll call for a House bill called “Making Appropriations for Labor, Health and Human Services for Fiscal Year 2001″ that President Clinton signed into law on December 21, 2000. You voted for it! And included in this package was something called the “Commodity Futures Modernization Act of 2000,” the one that — thanks to Alan Greenspan’s weird, intrusive lobbying efforts — completely deregulated the derivatives market. So that is probably why these bankers haven’t been prosecuted.

What must it be like for gentlemen like Jamie Dimon, a man who essentially created the largest financial company the world has ever known out of thin air, to lay prostrate before this blathering idiot. How the skin must crawl, the teeth must grind. To have spent decades to reach these heights of personal and professional achievement and be sullied by this man.

Michael Capuano. A man who graduated Boston College Law School in 1977 only to immediately fill his father’s Alderman’s seat in the small New England town of Somerville. Having held this esteemed position for thirteen years, Capuano succeeded in becoming the mayor of Somerville, a town of roughly 70,000 people. Eight years later (real mover, this chap), Capuano was elected, unopposed, to the United States Congress. He has since been re-elected five times, having run unopposed each time.

What you have here is a man who has spent his entire life winning professional popularity contests against himself

And what are his great legislative accomplishments? Let’s take a looksy. Oh, dear. Goodness. Right from the website, folks:

…and he significantly expanded the number of Massachusetts citizens eligible for home loans issued by the Federal Housing Administration, Fannie Mae and Freddie Mac.

You unbelievable, hypocritical ass.

Understand what is meant by “expanding the number of blah blah blah eligible for home loans.” This means lowering the credit standards for handing out mortgages so that more people can own homes. Why? Well because when people own homes it’s better for the community, naturally. What’s that you say? When you force banks to give mortgages to people that shouldn’t get them, you ultimately end up with a blighted, foreclosed, crime-ridden cesspool? Ft. Myers anyone?

No surprise here folks…Cape Coral along with Lehigh Acres have become the crime capitals of SW florida. Gangs, home invasions, shoot-outs at the local gas stations, hit & run fatalities, grow houses by the dozen… just part of “Keepin it real” here in banana land.

Let me get this straight. You (and your colleagues) push for banks to make more home loans to riskier and riskier individuals. Banks comply, package these mortgages and re-sell them (as mortgage-backed securities) in order to (wisely) mitigate their risk, take out insurance on these securities (credit default swaps are just a fancy way of saying “securities insurance”) based on legislation that you passed under the last Democratic President, and when deadbeats stop paying their bills and the whole system comes crumbling down around us, you publicly castrate the people that were forced to build their businesses atop this house of cards that you helped create.

You bottom-feeding ass. You unaccomplished idiot. Shame on you, sir.

Shame on you.

Never saw it coming

October 17, 2008 at 7:30 am | Posted in Business | Leave a comment
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I’m getting this from a wonderful blog I read daily by Paul Kedrosky. It’s a letter Thomas Jefferson wrote about the banks back in 1819. Picture for  you non-clicker’s below (but really, check out his blog).

4 Bailouts and a Funeral

October 3, 2008 at 11:38 am | Posted in Business, News | 1 Comment
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Alas, the bailout bill has passed, showing us that if at first you fail at getting a stupid bill passed through Congress, you need only make it a bit stupider to find success.

Pity for our soon to be former President Bush. By this logic, in order to have passed his Social Security reform, he needed only to have added a provision calling for the banning of monkey feces to have gotten the votes he needed.

Farewell, fair Capitalism, we knew thee well.

I’ll stick with Splenda

October 1, 2008 at 9:41 am | Posted in Business, News | 2 Comments
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News here that the Senate will attempt to revise and pass the bailout bill today by adding several “sweeteners” that House Republicans can’t resist. 

Anyone else think this sounds a bit like the “Open a Home Equity Line of Credit and get a free toaster” strategy that got these banks in trouble in the first place? Here are some highlights of what is being added to the bill:

1) There is a proposal to raise the FDIC insurance limit from $100K to $250K for personal bank accounts. In today’s (sensible) rules, banks are required to pay fees to the FDIC for this insurance; however, as the banking industry is not doing so hot right now (you may have heard), Congress is proposing that we waive the fees. This even though there only exists $1 in the FDIC backing every $100 of insured funds – the lowest level in history.

Are these people insane? We are going to shore up the failing banks by replicating their behavior in our government (not holding enough assets to back your debt)? This is the equivalent of helping your neighbor, whose house is burning down, by lighting your own house on fire. A bigger, crazier fire.

2) Congress wants to relax restrictions on “Mark-to-Market” accounting rules. The Wall Street Journal today explains it as, “On the question of the SEC’s mark-to-market accounting rule, the agency issued guidance Tuesday that could give management more flexibility in valuing securities when there isn’t a regular market for them.” It continues: “…its implications are nonetheless significant, potentially giving financial firms a way to revive the value of assets that were previously considered worthless. ”

Read that carefully. Management will be allowed to assess the value of a security even though there is no market for it. I believe that my fingernail clippings are worth a million dollars. Sure, nobody out there wants to buy them, but someday, they might. If “Mark-to-Market” accounting rings a bell, you might be remembering the last big company to become enamored with this accounting principle.

3) There is a provision to provide a new $1,000 tax deduction for homeowners who don’t itemize their deductions. If you are a homeowner and you don’t itemize your deductions, you are essentially passing on the opportunity to deduct the interest you paid on your mortgage last year. You would only do this for one of two reasons: your mortgage payment is so low that the standard deduction (a pittance) is bigger, or (and here’s where I’m leaning) you are an idiot. We are essentially giving a tax cut to people that either don’t need it, or are too lazy to copy the number provided to them by their mortgage company into a box on their tax return. Awesome. 

4) Because you can’t even pass a kidney stone these days without adding in some kind of “green” provision, there are tax credits for renewable energy usage. I submit that our Congress may be focused on the wrong kind of green here.

5) The final, crowing achievement of this bill is just too precious for words; it’s called the “Mental Health Parity” provision. It forces health insurance companies to cover mental health claims at the same level that they cover physical health claims. It’s presence in the financial bailout bill makes complete sense if you think about it, as this entire plan is batshit insane. These people are clearly in need of treatment.

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