Stock Market and Political Commentary

The Dubai Warning Flag

As we have discussed on this blog through many different commentaries, the debt burden throughout the world in private companies and even sovereign states and nations, cannot be maintained and will likely result in various financial collapses in the coming months.  Some of these will be routine and small while others could be catastrophic for economies around the globe.

Did the Dubai default just send up a warning flag for what is to come for others in the near future?

"Fears of a dangerous new phase in the economic crisis swept around the globe yesterday as traders responded to the shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill."

"Nervous traders transferred the focus of their anxieties from the risk of companies failing to the risk of nation states defaulting. Investors owed money by Mexico, Russia and Greece saw the price of insuring themselves against default rocket."

Will our young King see the California IOUs, New York saying they will be broke by the end of the year, plus this Dubai warning flag and drop his reckless and insane plans to borrow more money for another "stimulus" and his plans to skyrocket the debt through government health care?  No! 

The federal government is currently spending 1,5 trillion dollars a year ( $30 billion a week)  more than it is taking in through its revenue sources.  That is 30,000,000,000.00 per week!  

Let me put it another way.  We are borrowing about $100.00 per week for every man, woman, and child in the US.  So each week every family of 4 goes into debt another $400.00. Do you think this will not have serious consequences, either in inflation or even, in the worst case, default on this debt?

And this is not enough.  The Airhead wants more debt while again trying to have it both ways by making comments about how this debt burden is unsustainable.

Hey Obama.... if racking up this debt is unsustainable why are you actively working to rack up new debt by job killing programs that will skyrocket the deficit to levels that could result in default by the US Treasury?

At his next press conference see if you hear anything from the King that would satisfactorily answer this question.  I've not heard it yet, and I'm betting we won't hear it in the future either.

You think the economy is bad now?  Just wait until the full consequences of this mountain of debt manifests itself.  Man I hope I'm wrong about this, because if I'm not, it's not going to be pretty.

Dubai Article

J. Cogburn 

No Cash for Suckers Program Update

The government called it the "Cash for Clunkers" program.

I called it the "No Cash for Suckers" program in a previous commentary because of the following:

    a.  Dealers were not being reimbursed for the sales through the program after months of waiting despite being promised they would be paid in 15 days (another example of government efficiency), and

    b.  I predicted the cost per vehicle would be astronomical because sales would drop off after the program ended thereby leaving only a small increase in the total number of sales at a cost of another 3 billion dollars of debt for the taxpayers in America.

Now the evidence is in and this is exactly what happened.  Edmunds estimates it cost taxpayers about $24,000 per car... and this doesn't count the destruction of many perfectly fine used cars, lost time through massive paperwork, etc.

So the average price of these cars purchased was probably around $20,000 or less, but through the efficiency of government which they desperately want to demonstrate through a government run health care system, the taxpayers now owe $24,000 and the consumer owes $20,000 and the person who wants to buy a used car gets to pay a higher price too because those assets were destroyed under this brilliant government program.  What a deal!

They should have implemented my "Hay for Homes" program too since they liked this program so much.  See the details at:  Hay for Homes Program

Edmunds article: 

J. Cogburn

The Articles are Shouting Liar

Recently in a national speech to a Joint Session of Congress Obama said:

"But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink."

But what do the articles say?

U.S. job seekers exceed openings by record ratio

Despite signs that the economy has resumed growing, unemployed Americans now confront a job market that is bleaker than ever in the current recession, and employment prospects are still getting worse.

Job seekers now outnumber openings six to one, the worst ratio since the government began tracking open positions in 2000. According to the Labor Department’s latest numbers, from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed.

http://www.msnbc.msn.com/id/33041366/ns/business-the_new_york_times

The dead end kids

The unemployment rate for young Americans has exploded to 52.2 percent -- a post-World War II high, according to the Labor Dept. -- meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time.

Labor Dept. statistics also show that the number of chronically unemployed -- those without a job for 27 weeks or more -- has also hit a post-WWII high.

http://www.nypost.com/p/news/business/the_dead_end_kids_AnwaWNOGqsXMuIlGONNX1K

Let's face it.  Joe Wilson told Obama "You Lie" one time, but articles about the economy are shouting "Obama is a Liar" day after day.

Even though he is making a total mess of the economy and foreign policy Obama is undeterred from trying to control everything else too.  This is because he thinks he is a King with unlimited power instead of a President who is restrained by the Constitution.  So far it looks like he is right about this which gives him the one thing that he is right about so far.

Obama would curtail summer vacation

WASHINGTON – Students beware: The summer vacation you just enjoyed could be sharply curtailed if President Barack Obama gets his way.

http://news.yahoo.com/s/ap/20090927/ap_on_re_us/us_more_school

J. Cogburn

Lower and Middle Class Suckers

Hey, all you lower and middle class suckers out there...... hear this.

You Obama supporters bought the lie about how only the "rich" were going to pay for everything while you got a free ride, didn't you?

Well if the health care bill comes through as the democrats want it you are going to be forced to pay hefty premiums for health care insurance whether you like it or not.

And if Cap and Trade gets passed, which the democrats are also pushing, look for your utility bills to double in the next few years from extra taxes alone, not even counting inflation.  

I guess the old saying, "There's a sucker born every minute", is true for at least 52% of the US population.

....a fundamental conclusion is becoming evident: The Obama plan is a giant tax increase for much of the American people (not just the rich).

Having spent the entire campaign speaking about “affordable” coverage, it turns out the program is not at all affordable, but a massive new tax on the average uninsured American.

http://thehill.com/opinion/columnists/dick-morris/59853-obamacare-taxes-for-everyone

J. Cogburn

Debtors Revolt - Interesting Video

This lady is revolting against Bank of America and I'm cheering her on!

Even though I am a big believer in the free market, I also believe in a few common sense rules to govern our society too.  

I do not believe financial institutions in America should be able to charge more than 15% interest on anything at anytime.  If they can't make the loan for that then don't make the loan. If they can't issue a credit card for that then don't issue the credit card. The average person would be better off not getting a loan than getting one with a very high interest rate....guaranteed.

And what has this lady upset is something I've said long ago is simply immoral in my opinion.  Even though she has paid her credit card bill on time for years they suddenly decided to jack up her interest rate to 30%.  I don't care if they put it in the fine print; it should not be allowed!  

This is something that some of the democrats have been more interested in than Republicans, but that is OK with me.  I'm always interested in what is the right thing to do for our country and our citizens, not which party supports it.  But it just so happens that modern day democrats normally support things that take us further from the Constitution and Freedom so I oppose them most of the time.

Under the Constitution the Federal government actually has authority to be involved in Interstate Commerce.  They have abused this power terribly, and pretend that it gives them the right to regulate everything, but because of the nature of credit cards this I think would be a legitimate area for them to be involved in, especially if it was ensuring usury rates were not being charged to consumers.

See the Video

After you watch the video take a look at some background on how the credit card companies are sidestepping the usury laws at:

Article on Sidestepping Usury Laws

J. Cogburn

Credit Shrinks at Great Depression Rate

Last week in a national speech to a Joint Session of Congress Obama said:

"But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink."

But this recent article says:

Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.

"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."

Who do you believe, the Airhead or the Article?

The Article

J. Cogburn

Foreclosures Top 300,000

Last night during a health care speech Obama said this:

"But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink."

But once again reality rears its head and calls Obama a bold face liar.

Sept. 10 (Bloomberg) -- Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments.

Foreclosures Article

J. Cogburn

The No Cash for Suckers Program

I personally talked to two car dealers this weekend who told me that not a single dealer in Tennessee had received payment from the government on the Cash for Clunkers program.  This is causing them severe cash flow problems.  As a result they were no longer participating.  

Now this is hitting the national news.   New York dealers are also pulling out.  I'm sure the same thing is beginning to happen around the country since the dealer told me that as of a few days ago 222,000 deals had been made and only 1,900 of those had received checks from the government.

This is a simple program and the government can't even get this right.  What do you think they would do with something as massive and complicated as the US health care system?

NY Dealers Article

J. Cogburn

Watch Fools Scoff and Laugh

I've been researching some of the old YouTube videos the last few days on various economic and market predictions that were made over the last few years.

This guy Peter Schiff was exactly right about what was going to occur with our economy, but watch how he was dismissed by others as they laughed at him.  And the funny thing is, no pun intended, but some of these same people are still dismissing him today even though he was exactly right on most everything he said was coming in the 2007 to 2008 timeframe.

I still believe the stock market rally was a bull move in a bear market and that it is nearing the end of its run.  If so, the next leg down will be brutal and devastate 401Ks.

Schiff also believes this storm that began in 2008 is not over so we will see if he is right once again.

Various clips over the last 3 years

 http://www.youtube.com/watch?v=zz_yw0kq3MM&feature=related

Schiff vs Laffer on August 26, 2008 

http://www.youtube.com/watch?v=IU6PamCQ6zw

My recent YouTube video on the market

http://www.youtube.com/watch?v=gfClTH6crB4

J. Cogburn

Hay for Homes Program

You know this Cash for Clunkers program got me to thinking that we really should do something similar in real estate.

First let's look at the program for cars.  Here is in essence how the Cash for Clunkers program works....

Let's say you have a car with a blue book value of $4,500.  The government will pay you the $4,500 for it, by borrowing more money that we don't have and will all have to pay back later, if a dealer will destroy the engine and have the car crushed so that nobody gets any value out of it whatsoever... not even spare parts.  Since you no longer have a car you must buy a new car to get your money from the government.... if they haven't already spent more than Congress will authorize by the time your car is smashed.

Here is where my Hay for Homes program comes in.  Let's say you have a home valued at $200,000.  

Under my proposed program, if you will burn your home to the ground and not collect any insurance then the taxpayers will reimburse you the $200,000.  Since you no longer have a home this will mean you will need to buy a new home.  Genius, don't you think?  In no time we'll have this economy humming along as we all race to get a shelter built for our family before winter.

Of course this type of program will take lots of coordination and permits to make sure too many people don't try to take advantage of it at the same time and overload the fire department like they overloaded the dealers on Cash for Clunkers.  But based on lessons learned I'm sure the government can run this program smoothly.... you know, like they run other government programs.

Now we don't want to leave anyone out of this glorious program, so if you are a renter we also have a way for you to get some money from the government.  You will be assigned to one of two groups.  The first group of renters will be required to dig a hole out in an open field.  The second group of renters will be required to fill that hole back in with the dirt that was dug out by the first group. This way we solve the unemployment problem that is such a thorn in the side of our brilliant young King.

And now let's see the video of our liar in chief talking revealing what his true intentions are regarding health care in America..... I hope you folks like long waiting periods for service and pain pills because that is what Dr. Obama will be prescribing.

http://www.breitbart.tv/uncovered-video-obama-explains-how-his-health-care-plan-will-eliminate-private-insurance/

J. Cogburn