Thursday, June 17, 2010
Mr Short Missed BP !?
How is it possible? The man noted as the short expert missed a no-brainer. Jim Chanos, founder of Kynikos Assoc. and famous for finding money making opportunities buy shorting stocks missed the whole Gulf of Mexico shorting opportunity in BP and deepwater drillers like TransOcean (RIG). How is this possible? This was a no brainer? Purhaps Jim is just to focused on talking down China stocks and realestate. Purhaps Jim didn't get the news.
Thursday, June 3, 2010
PIIGS MUST FACE FACTS - America Next
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What's The Biggest Problem With Socialism?
Margaret Thatcher once said that “the problem with socialism is that eventually you run out of other people’s money.” Right now the PIIGS (Portugal, Italy, Ireland, Greece and Spain) are learning that the hard way.
Greece, on the verge of total economic collapse, has received a $1 trillion bailout from the European Union and the International Monetary Fund. America, as the biggest contributor to the IMF, gave 17% of those funds (China, in comparison, gave 3%). Yes, the same America who's military budget exceeds that of the World combined and who can't even take care of our homeless and budget problems is the largest contributor to helping Greece. Greece the country where a hairdresser qualifies for full social security pension benefits at age 50. German Chancellor Angela Merkel, one of the architects of the bailout, admits that with the bailout “we have done nothing more than to buy time until we have brought order to these competitive differences and to the budget deficits of individual Euro countries.”
Things have gotten so bad that even the so called "liberal media" has started to call it to our attention. The Washington Post warns that “one false move in Europe could set off a global chain reaction.” Though Greece and Portugal are usually the focus of the conversation, the debt crisis is bigger than them. Spain, in a similar debt crisis, recently had their credit rating downgraded by Standard & Poor. They two had a realestate bubble and now have 19% unemployment. A failing Spain, whose economy dwarfs that of Greece and Portugal, would be a much bigger problem. According to Angelos Pangratis, head of the European Union delegation to the United States, “if what happened in Greece were to happen in a large country, it could fundamentally mark our times.” Royal Bank of Scotland analyst Jacques Cailloux warned that Europe faces “the biggest coordination failure in modern history.”
What Caused The Current European Economic Crisis?
But what caused the economic crisis to begin with? Doesn't take a PhD in accounting to know the government continued for decades to spend more than it had in tax revenues. They continued to expand social benefits beyond even the most liberal American's view of entitlements. The socialist programs in Europe bought votes and were treasured by all to the point where 50% of the population worked for the government. As Ronald Reagan loved to say, "The government consumes tax dollars and produces nothing." Does anyone know of a product made in Greece that the world wants to buy? You'd think with all the paid vacation time and retirees on full pension benefits they'd have invented Face Book instead of a 20 something American college kid.
Paul Volcker, former Federal Reserve Chairman and current Obama financial advisor, said that Europe shows the repercussions of “uncontrolled borrowing.” Volcker, who sits on Obama’s Economic Recovery Advisory Board, stated that the “time is growing short” for America to restore economic prosperity. He stated that the biggest problem relates to “the sustainability of our commitment to growing entitlement programs.” In short, our government cannot continue to spend on the scale that it is spending and pay out more money in benefits to the citizens than it is taking in.
Why Do We Continue With Our Wealth Transfer From Savers To Spenders Program?
Baby Boomers remember Volcker , as one tuff cookie, who bashed inflation with ultra high interest rates. Ultra high interest rates motive every American to save more and spend less. Over the last decade our economic policies have been to create bubbles and reward the spenders by transferring wealth away from the savers. The savers earning near zero on their Money Market Mutual Funds for years forgo their earnings so others can buy $35,000 luxury vehicles and get six years free financing. Our government forces saves to give up their interest earnings so spenders can afford luxury homes twice the size of their parents. And no worries if you can't pay for it, turn in the keys and walk away from the debt. Your free to make it somebody else's problem.
Are We Really Even Close To A Greece Crisis?
A recent study by the Bureau of Economic Analysis concluded that income from the private sector is at an all-time low of 42%. Meanwhile, a historic high of 32% of America’s income now comes from the government, whether it’s government jobs or handouts. If the government uses private wages to generate tax revenue for their spending and Americans as a whole now have less than half of their income coming from private wages, that economic model can't work in the long-run, as seen in Greece.
Yes, the “stimulus” bill "saved jobs" but through increasing spending on more government jobs. Those jobs stimulate the economy less, considering government salaries are paid with taxpayer money.
What Are Three Simple Examples Of Fiscal Solutions We Can Do Today?
Here's three that neither Republican or Democrat Politian's will talk about. Why not? Simple, for fear of losing votes, from the many who pay no taxes, get the freebie gifts and the mighty military spending promoters.
#1) In America today, almost 47% pay No federal tax. A large segment of American's actual welcome the annual tax filing! The bottom 40% of earners in this country actually make more money from refundable tax credits than they pay in income tax. That's a serious fiscal problem. And it's been on-going for years.
How can we continued to expand social programs, and refundable credits with 47% of Americans paying NO federal tax? The same group pays very little to no state tax too. Surely everyone should pay a nominal 5% minimum federal tax.
#2) America's need to wake-up. We can't continued to be the Worlds Private Police and Military Force. Sure we want to keep fighting terrorist but Ronald Reagan did it with a very tiny middle-eastern footprint through a policy of funding your enemies - enemy, not building expensive military bases in every country.
This isn't the cold-war where the terrorist have real WMDs like the Russian's. The rag-tag Al-Qaeda has no nation; doesn't have a nuclear navy; nor intercontinental ballistic missiles with thousands of nukes inside MRV's pointing at every American military base and major city.
This isn't WWI, WWII, Korea or even Vietnam. So why are we spending like it is? True, it does create jobs and profits. But, American military spending promoters will say we can't afford to provide shelter for American's homeless but we'll spent billions to rebuild a nation we had no reason to invade nor occupy.
The U.S. spends almost as much on its military as the rest of the world combine. No wonder other countries have better health care and social security systems.
Many attributed the rapid rise of Japan's economy, after WWII, to its absents of military spending and total economic focus. The oil rich kings and princess of the middle-east enjoy our military protection with out paying a dime to the US taxpayers.
Compare China's economy during its military focus years (50's, 60s & 70s) to its record breaking growth economy over the last 20 years.
"For 45 years of the Cold War we were in an arms race with the Soviet Union. Now it appears we're in an arms race with ourselves." Admiral Eugene Carroll, Jr., U.S. Navy
We spend SIX TIMES MORE than the second-largest spender, China. We now spent TEN TIMES MORE than Russia. Even as the U.S. sunk under increasingly crippling levels of debt over the last decade, defense spending rose steadily. Why has China and even Russia become such growing economic powerhouses? Because, they chose to focus more on their economic might then military might.
It's time we do the same.
#3) Keynesian economics, doesn't mean taxpayers need to give $8,000 gifts to first-time home buyers to benefit realestate brokers and give sellers a more inflated price. It doesn't guarantee every American a home nor profit. It doesn't have to mean $3,000 cash-for-clunkers. Although, with that program the states got most of the federal money back in the form of a sales tax and you keep factor workers employeed.
But not even during the recessions of the 70's and early 80's did we force interest rates to historic lows for homeowners and homebuyers. Nor did we giveaway $8,000 house warming gifts. So why did we feel the need to do have to do it this time?
During the depression government worried about providing food and shelter and work for people. So, let's just keep it simple and get back to real Keynesian economics and focus on non-government job creation.
What's The Biggest Problem With Socialism?
Margaret Thatcher once said that “the problem with socialism is that eventually you run out of other people’s money.” Right now the PIIGS (Portugal, Italy, Ireland, Greece and Spain) are learning that the hard way.
Greece, on the verge of total economic collapse, has received a $1 trillion bailout from the European Union and the International Monetary Fund. America, as the biggest contributor to the IMF, gave 17% of those funds (China, in comparison, gave 3%). Yes, the same America who's military budget exceeds that of the World combined and who can't even take care of our homeless and budget problems is the largest contributor to helping Greece. Greece the country where a hairdresser qualifies for full social security pension benefits at age 50. German Chancellor Angela Merkel, one of the architects of the bailout, admits that with the bailout “we have done nothing more than to buy time until we have brought order to these competitive differences and to the budget deficits of individual Euro countries.”
Things have gotten so bad that even the so called "liberal media" has started to call it to our attention. The Washington Post warns that “one false move in Europe could set off a global chain reaction.” Though Greece and Portugal are usually the focus of the conversation, the debt crisis is bigger than them. Spain, in a similar debt crisis, recently had their credit rating downgraded by Standard & Poor. They two had a realestate bubble and now have 19% unemployment. A failing Spain, whose economy dwarfs that of Greece and Portugal, would be a much bigger problem. According to Angelos Pangratis, head of the European Union delegation to the United States, “if what happened in Greece were to happen in a large country, it could fundamentally mark our times.” Royal Bank of Scotland analyst Jacques Cailloux warned that Europe faces “the biggest coordination failure in modern history.”
What Caused The Current European Economic Crisis?
But what caused the economic crisis to begin with? Doesn't take a PhD in accounting to know the government continued for decades to spend more than it had in tax revenues. They continued to expand social benefits beyond even the most liberal American's view of entitlements. The socialist programs in Europe bought votes and were treasured by all to the point where 50% of the population worked for the government. As Ronald Reagan loved to say, "The government consumes tax dollars and produces nothing." Does anyone know of a product made in Greece that the world wants to buy? You'd think with all the paid vacation time and retirees on full pension benefits they'd have invented Face Book instead of a 20 something American college kid.
Paul Volcker, former Federal Reserve Chairman and current Obama financial advisor, said that Europe shows the repercussions of “uncontrolled borrowing.” Volcker, who sits on Obama’s Economic Recovery Advisory Board, stated that the “time is growing short” for America to restore economic prosperity. He stated that the biggest problem relates to “the sustainability of our commitment to growing entitlement programs.” In short, our government cannot continue to spend on the scale that it is spending and pay out more money in benefits to the citizens than it is taking in.
Why Do We Continue With Our Wealth Transfer From Savers To Spenders Program?
Baby Boomers remember Volcker , as one tuff cookie, who bashed inflation with ultra high interest rates. Ultra high interest rates motive every American to save more and spend less. Over the last decade our economic policies have been to create bubbles and reward the spenders by transferring wealth away from the savers. The savers earning near zero on their Money Market Mutual Funds for years forgo their earnings so others can buy $35,000 luxury vehicles and get six years free financing. Our government forces saves to give up their interest earnings so spenders can afford luxury homes twice the size of their parents. And no worries if you can't pay for it, turn in the keys and walk away from the debt. Your free to make it somebody else's problem.
Are We Really Even Close To A Greece Crisis?
A recent study by the Bureau of Economic Analysis concluded that income from the private sector is at an all-time low of 42%. Meanwhile, a historic high of 32% of America’s income now comes from the government, whether it’s government jobs or handouts. If the government uses private wages to generate tax revenue for their spending and Americans as a whole now have less than half of their income coming from private wages, that economic model can't work in the long-run, as seen in Greece.
Yes, the “stimulus” bill "saved jobs" but through increasing spending on more government jobs. Those jobs stimulate the economy less, considering government salaries are paid with taxpayer money.
What Are Three Simple Examples Of Fiscal Solutions We Can Do Today?
Here's three that neither Republican or Democrat Politian's will talk about. Why not? Simple, for fear of losing votes, from the many who pay no taxes, get the freebie gifts and the mighty military spending promoters.
#1) In America today, almost 47% pay No federal tax. A large segment of American's actual welcome the annual tax filing! The bottom 40% of earners in this country actually make more money from refundable tax credits than they pay in income tax. That's a serious fiscal problem. And it's been on-going for years.
How can we continued to expand social programs, and refundable credits with 47% of Americans paying NO federal tax? The same group pays very little to no state tax too. Surely everyone should pay a nominal 5% minimum federal tax.
#2) America's need to wake-up. We can't continued to be the Worlds Private Police and Military Force. Sure we want to keep fighting terrorist but Ronald Reagan did it with a very tiny middle-eastern footprint through a policy of funding your enemies - enemy, not building expensive military bases in every country.
This isn't the cold-war where the terrorist have real WMDs like the Russian's. The rag-tag Al-Qaeda has no nation; doesn't have a nuclear navy; nor intercontinental ballistic missiles with thousands of nukes inside MRV's pointing at every American military base and major city.
This isn't WWI, WWII, Korea or even Vietnam. So why are we spending like it is? True, it does create jobs and profits. But, American military spending promoters will say we can't afford to provide shelter for American's homeless but we'll spent billions to rebuild a nation we had no reason to invade nor occupy.
The U.S. spends almost as much on its military as the rest of the world combine. No wonder other countries have better health care and social security systems.
Many attributed the rapid rise of Japan's economy, after WWII, to its absents of military spending and total economic focus. The oil rich kings and princess of the middle-east enjoy our military protection with out paying a dime to the US taxpayers.
Compare China's economy during its military focus years (50's, 60s & 70s) to its record breaking growth economy over the last 20 years.
"For 45 years of the Cold War we were in an arms race with the Soviet Union. Now it appears we're in an arms race with ourselves." Admiral Eugene Carroll, Jr., U.S. Navy
We spend SIX TIMES MORE than the second-largest spender, China. We now spent TEN TIMES MORE than Russia. Even as the U.S. sunk under increasingly crippling levels of debt over the last decade, defense spending rose steadily. Why has China and even Russia become such growing economic powerhouses? Because, they chose to focus more on their economic might then military might.
It's time we do the same.
#3) Keynesian economics, doesn't mean taxpayers need to give $8,000 gifts to first-time home buyers to benefit realestate brokers and give sellers a more inflated price. It doesn't guarantee every American a home nor profit. It doesn't have to mean $3,000 cash-for-clunkers. Although, with that program the states got most of the federal money back in the form of a sales tax and you keep factor workers employeed.
But not even during the recessions of the 70's and early 80's did we force interest rates to historic lows for homeowners and homebuyers. Nor did we giveaway $8,000 house warming gifts. So why did we feel the need to do have to do it this time?
During the depression government worried about providing food and shelter and work for people. So, let's just keep it simple and get back to real Keynesian economics and focus on non-government job creation.
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