NATION (US)
China Set To Buy GM - Chrysler Top Business Newspaper Says
$100 Billion Wont’t Dent $2 Trillion China Has In Cash.
Chinese carmakers SAIC and Dongfeng have plans to buy GM and Chrysler, China’s 21st Century Business Herald reported on November 18th. — this is one of China’s leading business newspapers, with a daily readership over 3 million.. The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry–who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action.
Chevrolet is the top selling marque in China where GM has been very profitable. Plus GM can be bought for– less than toy maker Mattel. Even at $100 billion it wouldn’t even dent China’s more than $2 trillion in currency reserves.
Plus, a take-over of a large overseas auto maker would fit perfectly into China’s plans. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their
U.S.
counterparts in times of crisis.”
Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China’s largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005.
Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China’s Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.
Can you say DONG FENG DODGE? I say it’s a hell-of-a-lot smarter than having those twits in Congress run it out of the ditch and over the cliff.
Sarkozy Plans New Financial Crisis Meeting
In my readings and judgement of the outcome of the G20 Summit in Washington, I have to say that that there was alot of talk, regulatory promises and reportage etc, but was anything achieved ? Was anything signed off ? Nope. I guess Bush Jnr firmly expects that the world financial crisis can just wait for its own solution. Clearly leaders such as ex-UK Prime Minister Tony Blair, current UK Prime Minister Gordon Brown and French President Nicholas Sarkozy were, perhaps, a little disappointed at this lack of urgency and response to the financial crisis. Which is why Mr Sarkozy has decided to hold his own European crisis meeting on January 8, 2009.
I was particularly amused to read of this meeting in the NY Times, that well known bastion of truth and unbiased reporting, which contained the headline, “Sarkozy’s Fiscal Meeting Raises Diplomatic Hackles“. Dotted about their parlez were declarations such as:
“President Nicolas Sarkozy of France left the summit meeting on the financial crisis here last weekend in a triumphal mood, declaring that it had tamed the animal spirits of American capitalism. Then he went home and announced that he would hold his own summit meeting in a few weeks in Paris — on the same topic.”
“That has raised hackles in diplomatic circles, not just because the [European] meeting appears to compete with a planned gathering of 20 world leaders next April. Mr. Sarkozy’s aggressive statements have put American officials on edge, with some saying that he seemed determined to turn the global crisis into a referendum on the ills of untrammeled capitalism.”
In reports of this meeting by such as Reuters and the Washington Times, the headlines and assessments were somewhat less biased and stirring. These newspapers suggest that the future summit planned for the G8 on April 2009 wasn’t exactly a rush to inspire confidence or respond adequately to the current economic crisis.
Therefore, as to the reasons why European leaders want to further address this financial crisis, these reasons are many. ALL governments have their own economic and political Think Tanks and advisers who are not stupid. Their only function must be to develop policies which aid their own country. Here, as a best guess, is what they have probably been pondering concerning the US Bailout Plans and the latter’s performance so far:
- At the recent G20 financial conference, President Bush Jr made damn sure nothing was signed. Plenty of talking and blabbing, but no urgency, no direct effective response. Bush Jr, evidently, doesn’t want any of the blame - he just wants to hand it off to President Obama.
- The US government’s Bailout response to the financial crisis, via the voodoo-thinking of the US Treasury and the Fed, can only be described as very ad hoc, messy, ill-thought out and verging on the incompetent. With something approaching 73 Treasury advisers - all ex-Wall Street, Paulson has been inexplicably saving more and more Wall Street Institutions. Therefore, his credibility as a neutral political player is very suspect. Perhaps Paulson’s so-called tenet of “Recapitalizing the banks” should be re-read as “Recapitalizing Wall Street” with taxpayers money.
- Just days before the $700 billion Bailout went into effect, Paulson bought $630 billion in credit default swaps in foreign currencies. This has caused the recent surge in the value of the US Dollar. When these swaps expire in early January 2009 - all these dollars will flood the currency markets once again and drag the dollar - and other currencies - down. Perhaps both Sarkozy and Gordon Brown have spotted this ruse, and perhaps they are aware of the currency problems that will occur in early January because of this heavy-handed play by Paulson.
- With her current Dollar problems, Energy problems, relationship problems with both China and Russia and a heavy, crippling Fiscal Debt, can the US government lead and focus effectively on the financial crisis in Global friendly terms, rather than eventually promoting its own isolationist and protectionist policies that would economically hurt both Asian and European economies and trade ?
- When Obama takes rein as the next US President, then Bush Jr, Paulson and Bernanke might well all be out of a job. Why should they care what happens in April at the the next slow-moving G8 Financial Summit ?
- With all the shadow agendas that have been perpetuated by the Bush Jr administration over the years, why should the stated economic intentions of either Paulson or Bernanke - both Bush’s main fiscal henchmen - be believed or trusted ?
- With the recent projected downgrade of America’s influence in both the global economic and political spheres by 2025 - according to a recent US NIC Report - European Leaders should help contribute to take the lead in sorting out the current economic and financial mess.
These will be the passing thoughts of those leaders and economists concerned with the European Conference in January 2009. It’s certainly a warming thought to realize that at least a few World Leaders are intent on taking this international financial crisis seriously…
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GM Bailout - the Truth and the Bunk
Bend over and brace yourself America — here it comes again.
Martin Walker write in a Washington (UPI) Nov 19, 2008 datelined article that, “(A) GM bankruptcy would not save money for the U.S. economy. The healthcare and pension obligations would simply shift to state welfare, Medicare and Medicaid and the pension guarantee system.”
There are 479,000 retirees getting GM pensions. Pensioners are quarantined a maximum of $40,000 a year from The Pension Benefit Guaranty Corp. PBGC is another one of those federal shadow corporations nobody pays much attention to until the defecation hits the impeller. But, it GM fails PBGC could wind up paying 20 billion a year to GM pensioners, or for any other qualifying company that fails. So in that context a $25 billion “bridge-to-nowhere-loan” to GM looks cheap is there is even a slight chance it will reverse track and could be paid back.
Second, he says a Chapter 11 bankruptcy filing would likely hit sales hard, as consumers fear that multiyear warranties and their local dealerships and future supplies of spare parts might not be reliable. Frankly that’s mostly a boogieman.
Third, Walker argues there is a strategic aspect to the U.S. auto industry. It is a critical part of the national industrial base and the economy as a whole, as well as the defense sector. But, what he doesn’t say many of US military vehicles are being made elsewhere anyway because U. S. plants can’t or won’t do it.
Detroit he points out is the key partner in the Army’s Tank Automotive Research, Development and Engineering Center and the Fuel Efficient Ground Vehicle Demonstrator Project. Detroit Diesel and ArvinMeritor are irreplaceable links in the military’s long supply chain but they can run just fine without help from legions of General Motors Institute graduates’ help.
Fourth, GM is profitable in Europe, Latin America, Asia and the Middle East. GM upped its profits in Europe by 65 percent last year. GM also posted records in Asia, Latin America and the Middle East. In China, GM leads all automakers in sales. In 2007 sales rose 20 percent for GM in China compared with 2006, and GM became the first manufacturer to sell 1 million vehicles in China.
But, that may not last. Opel, GM’s German wing wants Berlin to bail it out and Brussels to restructure aid under the European Union’s proposed scheme to help its auto industries retool for a green future. But Opel, like the British wing of GM known as Vauxhall, is looking hard at buyout options and there are buyers.
Fifth, and maybe most important people are still going to buy cars. The credit crunch has been complicating things since the boneheads in Congress shoveled money to banks without a demand to lend it – so they aren’t – but will. But forget about the U. S. the growing wealth of the developing world means a boom is on the way.
Walker says there are now 800 million vehicles on the world’s roads; by 2020 there are expected to be 1.5 billion, with strong growth in China, India and elsewhere.
The good news is things like the Volt, GM’s electric-powered (but still hybrid) car coming to market within 18 months. Ford and Chrysler have hybrid vehicles already, and fully electric and fuel-cell cars are in development.
He argues all these good idea should not go to waste what he doesn’t say is they won’t. Remember GM and to some extent Ford and Chrysler won’t let that happen and their foreign operations although related are more independent that dependent.
Sixth, remember GM and Ford are well advanced on the restructuring path, after new agreements with the labor unions, improved quality and models, and ongoing reform of its sprawling dealer network.
United Auto Workers union is talking about funding a voluntary employee beneficiary association has ended its $50 billion liability in unfounded benefits. This has already saved GM $5 billion.
Moreover, healthcare reform, a likely priority of the incoming Obama administration, could shift the remaining burden of health costs from companies to a national insurance system that should further relieve the auto industry’s current high cost structure. The bugaboo is those costs will fall on taxpayers.
The rub in all this is that the current crash sneaked up on America driving car and truck sales down from 16 to 13 million units and it is still headed south.
GM’s current North American operating costs of $31 billion a year at its 24 plants need to be slashed by at least a third. That costs jobs and wrecks communities. I know I watched steel plants close followed by blocks of closed stores and even the local movie house. Three plants are already slated for closure.
Walker’s argument that GM’s has “spawned a “sprawling and swollen dealership network” but he forgets that dealerships – including some 4,000 in small-towns are private businesses and that will take care of itself. So keep hands off.
He rightly points out if Congress decides against a GM bailout it need not be the end of the world. When UK Prime Minister Margaret Thatcher refused further subsidies to British Leyland, the last U.K.-owned major car manufacturer things came back and UK now makes and exports more cars and employee more people than it did then. Plus, Walker finally says, given the manufacturing presence of Honda, Toyota, BMW, Mercedes and Hyundai, the U.K. experience may well be repeated in the United States, even if Ford and GM collapse.
After all based on current share price Ford and GM both could be bought for less than $10 billion so somebody will – clean house; flush those toilets and clean the bowls and get on with it.
The Democrats in Congress are so beholding to tens of millions of contributions from big labor and millions of workers to keep them in office they will likely not do what’s right. So here comes $25 billion and probably $50 billion or more and things will still be a fouled up as Hogan’s goat.
Martin Walker hit a pretty solid ball but I had to short stop it and hold him up on first base. But, he still did better than those strike outs in Washington DC.
NIC Report: US Geopolitical Influence to Diminish by 2025
In a report just out from the US National Intelligence Council called Global Trends 2025: A Transformed World, the assessments therein will be used to predict possible world “futures” with application to current US political strategies. Points made in the analysis have highlighted the following:
- The whole international system—as constructed following WWII—will be revolutionized. Not only will new players—Brazil, Russia, India and China— have a seat at the international high table, they will bring new stakes and rules of the game.
- The unprecedented transfer of wealth roughly from West to East now under way will continue for the foreseeable future.
- Unprecedented economic growth, coupled with 1.5 billion more people, will put pressure on resources—particularly energy, food, and water—raising the specter of scarcities emerging as demand outstrips supply.
- The potential for conflict will increase owing partly to political turbulence in parts of the greater Middle East
For a longer assessment of this document, here is a wider report and view from The Times :
The next two decades will see a world living with the daily threat of nuclear war, environmental catastrophe and the decline of America as the dominant global power, according to a frighteningly bleak assessment by the US intelligence community.
“The world of the near future will be subject to an increased likelihood of conflict over resources, including food and water, and will be
haunted by the persistence of rogue states and terrorist groups with greater access to nuclear weapons,” said the report by the National Intelligence Council, a body of analysts from across the US intelligence community.
The analysts said that the report had been prepared in time for Barack Obama’s entry into the Oval office on January 20, where he will be faced with some of the greatest challenges of any newly elected US president.
“The likelihood that nuclear weapons will be used will increase with expanded access to technology and a widening range of options for limited strikes,” the 121-page assessment said.
The analysts draw attention to an already escalating nuclear arms race in the Middle East and anticipate that a growing number of rogue states will be prepared to share their destructive technology with terror groups. “Over the next 15-20 years reactions to the decisions Iran makes about its nuclear programme could cause a number of regional states to intensify these efforts and consider actively pursuing nuclear weapons,” the report Global Trends 2025 said. “This will add a new and more dangerous dimension to what is likely to be increasing competition for influence within the region,” it said.
The spread of nuclear capabilities will raise questions about the ability of weak states to safeguard them, it added. “If the number of nuclear-capable states increases, so will the number of countries potentially willing to provide nuclear assistance to other countries or to terrorists.”
The report said that global warming will aggravate the scarcity of water, food and energy resources. Citing a British study, it said that climate change could force up to 200 million people to migrate to more temperate zones. “Widening gaps in birth rates and wealth-to-poverty ratios, and the impact of climate change, could further exacerbate tensions,” it said.
“The international system will be almost unrecognisable by 2025, owing to the rise of emerging powers, a globalising economy, a transfer of wealth from West to East, and the growing influence of nonstate actors. Although the United States is likely to remain the single most powerful actor, the United States’ relative strength – even in the military realm – will decline and US leverage will become more strained.”
Global power will be multipolar with the rise of India and China, and the Korean peninsula will be unified in some form. Turning to the current financial situation, the analysts say that the financial crisis on Wall Street is the beginning of a global economic rebalancing.
The US dollar’s role as the major world currency will weaken to the point where it becomes a “first among equals”.
“Strategic rivalries are most likely to revolve around trade, investments and technological innovation, but we cannot rule out a 19th-century-like scenario of arms races, territorial expansion and military rivalries.” The report, based on a global survey of experts and trends, was more pessimistic about America’s global status than previous outlooks prepared every four years. It said that outcomes will depend in part on the actions of political leaders. “The next 20 years of transition to a new system are fraught with risks,” it said.
The analysts also give warning that the kind of organised crime plaguing Russia could eventually take over the government of an Eastern or Central European country, and that countries in Africa and South Asia may find themselves ungoverned, as states wither away under pressure from security threats and diminishing resources..
The US intelligence community expects that terrorism would survive until 2025, but in slightly different form, suggesting that alQaeda’s “terrorist wave” might be breaking up. “Al Qaeda’s inability to attract broad-based support might cause it to decay sooner than people think,” it said.
On a positive note it added that an alternative to oil might be in place by 2025.
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Related Articles :
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What is Foreign Money Buying In Washington DC
Palestinian Brothers Gave Obama $31,000 from GAZA strip.
The Federal Election Commission was prepared to sweep aside formal demands for a full audit of irregularities in the Obama campaign until the idea of Hillary Clinton being Secretary of State surfaced. More specifically are monies flowing from foreigners and foreign governments to former President Bill Clinton and into the Obama’s pockets.
The rub with the FEC is concerns can also include receiving money from foreign donors. The FEC compiled a list last month of more than 16,000 contributions from overseas sources. A Newsmax survey of roughly one-fifth of those names found 118 individuals who appeared to be foreign citizens.
Non-U. S. citizens are forbidden from contributing and more specifically campaigns, if knowing, are prohibited from accepting such contributions lest foreigners and foreign governments buy influence.
4,000 contributors to the Obama campaign exceeded the $2,300 individual limits and could be prosecuted and if found guilty fined and even imprisoned.
So, will the commission act now? Incoming commissioners Don McGahn, a Republican, and Cynthia Bauerly, a Democrat, insisted that they would hear cases at the FEC in terms of their merits, not party affiliation.
One egregious example is contribution from two brothers in the Gaza Strip, Hosam and Monir Edwan. Together, they gave over $31,000 to the Obama campaign. The brothers listed their address as Gaza Strip, Rafah,” and used a foreign currency credit card to make their donations.
Obama’s campaign also received millions of dollars in cash cards where a person buys the card for cash, contributes without name or address being reported. In one case an individual bought out a retailers supply with a stack of $100 bills.
Partisans are pointing out that this does not reflect the idea of “change” or “reform.”
At minimum say critics Obama’s campaign should be thoroughly vetted as former President Clinton financed investigated to remove any doubt of foreign influence or expose it if it exists.
Democrats Two Senate Seats Short Of Veto Proof
Chambliss and Coleman Seats on knife’s edge.
Republican incumbent Senator Saxby Chambliss holds a four-point lead over Democratic challenger Jim Martin in Georgia ’s closely-watched Senate runoff race, according to the first Rasmussen 
Reports survey in the state since Election Day.
A runoff is required since no one security a majority of the vote on November 4th ,Chambliss leads 50% to 46%, with the vote scheduled for December 2. Only four percent (4%) are undecided. At present Democrats have a 56 advantage; plus one avowed Socialist and an independent (Lieberman) who caucus with the Democrats - two short of a veto proof Senate and hence Congress.
The Minnesota race between uber-leftist, and sarcastic un-funny man Al Franken and bland Republican incumbent Norm Coleman is in a manual recount. They were separated by 209 votes of 2.9 million cast but Coleman’s lead as of 7:03 AM Thursday is 179 due to results from liberal, urban St. Louis County Franken has sued to count absentee ballots even if received late.
Franken’s camp estimates that as many as 250 volunteer attorneys will descend on the state.
Coleman is a former Mayor of St, Paul; first term Senator elected in 2002, a previous member of the Democratic-Farmer-Labor Party (DFL), Coleman switched to the Republican Party of Minnesota in 1996. In 1998 he lost a bid for Governor of Minnesota against former professional wrestler Jesse Ventura , a member of the Reform Party of Minnesota , and Democratic Farmer Labor candidate Hubert H. “Skip” Humphrey III .
Recounting costs about 3 cents per ballot or $87,000 but before every legal challenge is resolved could consume millions of dollars.
Little More Than A Third Want BIG 3 Bailout.
48% Say Let Car Companies Fail - That Was Before Corporate Jet Joke.
Nearly half of U.S. voters (48%) say it is better for the economy to let companies like General Motors fail rather than providing government subsidies to keep them in business. Last week that number was 46%, and the poll was taken before revelations of the corporate jet fleet hauling GM, Ford and Chrysler’s CEO banck and forth to their Washington DC beg-a-thon.
Thirty-five percent (35%) believe it’s better to subsidize their continued existence, according to a new Rasmussen Reports national telephone survey. Seventeen percent (17%) are undecided.
Sixty-four percent (64%) of Republicans and 60% of unaffiliated voters say it’s better to let troubled companies like GM fail, compared to 26% of Democrats.
Fifty percent (50%) of Democrats think it’s better to subsidize them, but just one-quarter of GOP and unaffiliated voters agree.
Fifty-three percent (53%) of investors say it is better to let companies like GM fail, compared to 38% of non-investors.
12% of voters, about one of eight, say their personal finances will be significantly hurt if General Motors files for bankruptcy protection. Seventy-three percent (73%) say their finances will not be impacted, while 15% aren’t sure.
Barney And The Brain Dead Car Bosses - Contempory Fairy Tale (Pun Intended)
Never Use a Gold Collection Plate.
My late uncle, Rev. John, used to say “Never use a gold collection plate.” GM, Ford and Chrysler’s CEOs could have benefited from his advice as the hypocrites swooshed into Washington DC aboard private jets yesterday to beg for $25 billion in taxpayer money at least in part to pay for their fleets of jets. Apparently they have all cut costs by laying off their public relations department, or if they haven’t – they should and get someone who is not so completely tone deaf.
Only Congressman Barney Frank out did that troika of hypocrites by charging that denying them the bailout was really about hurting blue collar assembly line workers having already shoveled tens of billions to bailout to white collar bankers. Frank’s first class hypocrisy was heightened by failing to mention that his homosexual boyfriend lover at Fannie Mae was one of the first beneficiaries; how much money he and his mostly Democrat cohorts rake in from United Auto Workers or that he took a sweetheart mortgage from failed Countrywide.
It was Mark Twain who said, “Suppose you were an idiot. And suppose you were a member of Congress….But then I repeat myself.” Makes you wonder how Twain would amend his sarcasm to include the trio of arrogant auto executives having covered the mush mouthed Congressman and his cronies..
Lies Perpetuated for Personal Gain and Loss of Earned National Pride
“Big Lies That Poison Thanksgiving And Subvert Our Sense Of Honor” is Michael Medved’s 11th nonfiction book, “The 10 Big Lies About America,” was published by Crown-Random House on Nov. 18. He hosts a daily, syndicated radio talk show with nearly 4 million listeners from Seattle, Washington.
Following is a blog he posted on www.ibdeditorials.com/IBDArticles.aspx?id=311900969646002 - 59k - On November 18, 2008
By MICHAEL MEDVED
For some of Barack Obama’s most ardent supporters, his resounding victory represented the first sign of redemption for a wretched, guilty nation with a 400-year history of oppression.
Filmmaker Michael Moore, for instance, considered election night “a stunning, whopping landslide of hope in a time of deep despair. In a nation that was founded on genocide and then built on the backs of slaves, it was an unexpected moment, shocking in its simplicity.”
Actually, Mr. Moore’s summary of America’s origins is a wholly expected distortion, shocking in its mendacity.
Like so many other revered figures in the worlds of entertainment and academia, the portly provocateur thoughtlessly recycles the darkest assumptions about the generous nation that provides his privileged, prosperous life.
My new book, “The 10 Big Lies About America,” represents an aggressive effort to correct the ugly smears that play an increasingly prominent (and often unchallenged) role in our public discourse.
Big Lie No. 1, for instance, concerns the ubiquitous notion that the nation’s founders and builders followed a policy of “genocide” toward Native Americans.
In truth, disease caused 95% of the deaths that ravaged native populations of North America following European contact. Despite lurid (but historically baseless) claims of massive infection brought about by “smallpox blankets,” even the deadliest germs displayed no consciously hostile agenda.
In fact, intermarriage (including frequent intermarriage with African-Americans, slaves and free) and assimilation caused more Indian “losses” than all occasional massacres by governmental and irregular forces - incidents invariably condemned by federal authorities, never sponsored by them.
My book’s Lie No. 2 precisely anticipates Moore’s claim that America was “built on the backs of slaves,” suggesting that our wealth and prosperity came chiefly through the stolen labor of kidnapped Africans.
While slavery represented an undeniable horror in our nation’s early history, the slave population never exceeded 20% of the national total (amounting to 12% at the time of the Civil War). This means that at least 80% of the work force remained free laborers.
The claim that our forefathers built America “on the backs of slaves” rests on the idiotic idea that involuntary servitude proved vastly more productive than free labor. In fact, the states dominated by the slave economy counted as the poorest, least developed in the union - providing the North with crushing economic superiority that brought victory in the War Between the States.
Of more than 20 million Africans taken from their homes in chains, at most 3% ever made their way to the territory of the United States (or the British colonies preceding our nation). Americans played no part in establishing the once-universal institution of slavery but played a leading, outsize role in bringing about its abolition.
Other lies about America’s past badly distort current debates over public policy. It’s not true, for instance, that governmental activism provides a necessary remedy for periodic economic downturns (Big Lie No. 6).
In fact, leaders who courageously resisted the temptation of major federal initiatives at times of crisis presided over shorter, less painful recessions, while the ambitious innovations of Hoover and FDR worsened and prolonged the Great Depression. (Even liberal historians admit that the New Deal never worked as “a recovery program.”)
Meanwhile, the popular assumption that our founders determined to create a secular, not a Christian, nation (Big Lie No. 3) has produced widespread hysteria over the program of “the Christian right.”
In fact, the constitutional framers insisted on a combination of a secular government and a deeply Christian society. Even Jefferson, an unconventional religious thinker, believed that fervent faith represented a necessary element in the security and growth of the republic; he personally attended and authorized weekly Christian services in the Capitol building itself.
Secular militants, not Christian conservatives, currently strive to transform America in a way our founders would neither recognize nor approve.
Unfortunately, some of the same religious conservatives who get it right about the place of organized faith in the American fabric get it terribly wrong by signing on to Big Lie No. 10: that the United States has entered into a steep - and irreversible - moral decline.
In fact, a wealth of statistics concerning marriage, teenage sexuality, drug addiction, crime, alcohol abuse and other signs of social breakdown show a recent, decisive turnaround that may represent one of the nation’s periodic “awakenings.” Moralists have proclaimed permanent ethical collapse ever since 1645, yet no one could claim that our path has been straight downhill for 350 years.
The big lies about America all work to undermine the sense of honor and gratitude that ought to inspire every citizen, particularly in this Thanksgiving season. They also destroy the essential sense of perspective required in significant debates as a new government comes to power in Washington, D.C.
While Sen. Obama’s supporters rightly rejoice at his election to the nation’s highest office, they will disorient his presidency and damage society if they embrace destructive distortions about our past, and view his elevation as a rare (or exclusive) basis for pride.
Medved’s 11th nonfiction book, “The 10 Big Lies About America,” was published by Crown-Random House on Nov. 18. He hosts a daily, syndicated radio talk show with nearly 4 million listeners.
Dollar Health: A Word from the Bears
With all the current global problems, as the financial crisis continues to writhe, bleed and affect the global markets, as the oil price sinks inexplicably lower, with Peak Oil looming so close on the horizon, huge US Fiscal Debt problems, and China and Russia soon to unload their $ trillions - what chance the dollar ?
Perhaps a wide variety of expert views might help - from people who have long experience and know the markets intimately and who are taken seriously, whenever they utter their opinions and truths. Many have been saying it - that the dollar is a flawed currency now, some say possibly doomed.
Warren Buffet says :
“The rest of this the world owns $10 trillion of us, or $3 trillion net.” That is, U.S. claims on foreign assets run to only $7 trillion. “If lots of people try to leave the market, we’ll have chaos because they won’t get through the door.” In a nutshell, the trade deficit is forcing foreign central banks to ingest U.S. currency at a rate approaching $2 billion a day. Buffett continues: “If we have the same policies, the dollar will go down.”
Peter Schiff in his articel “The Humpty Dumpty Economy” explains:
“Reminiscent of his Bazooka maneuver, quick draw Paulson reversed course quickly with his decision to not use any TARP funds to buy the assets that the plan was specifically funded to procure. Instead, he will simply dole out the loot to his buddies on Wall Street and use it for whatever seemingly worthy initiative strikes his fancy. Although Congress loves to grandstand about oversight, it has thus far shown no courage to interfere, or even question, the change in strategy. Paulson claims that he is simply rolling with the punches. The truth however, is that the original plan was flawed from inception, as I clearly pointed out in a string of commentaries following his proposal. How could the Treasury Department, with all its funding and PhD’s, not make similar predictions? Paulson is either a liar or completely incompetent. My guess is he is both.”
Marc Faber, a well known European market analyst, writes:
“Simply put, whereas in the past cash could be perceived as ‘reasonably’ safe, today cash may, courtesy of modern central banking under the auspices of the US Fed, actually have become quite a dangerous asset class due to its depreciation not only against asset prices but also against consumer prices, if these were measured properly by government agencies.”
In a recent interview from the Financial Times regarding the dollar and US Economy, Jim Rogers had this to say:
FT: It’s a year since we last interviewed you. You were aggressively bearish about the dollar, but you thought there would probably be a rebound and you would take that as an opportunity to get further out of the dollar. Have you made a further exit from the dollar?
JR: Not yet, no.And the reason I haven’t is because we’re in a period of forced liquidation of everything. We’ve had only eight or nine periods like this in the past 150 years, where everybody has to reverse their positions on everything.There is a gigantic short position in the dollar and they’re all having to cover as they reverse their positions, so this rout is going to go on much further than I would have expected - to my delight, because then I’ll get to sell at higher prices. I don’t know whether I’ll get out this month or this year even - maybe next year, but I do plan to get out of the rest of my US dollars, because this is an artificial rally caused purely by short covering.
FT: How will you tell when that deleveraging is finally over?
JR: I’m sure I won’t get it right, but I do hope that when there’s a lot of euphoria about the dollar and everybody’s saying, well, see, there’s no problem with the dollar . . . I hope I’m smart enough to recognise it and finally get out of the dollar, because it is a flawed and, maybe, even doomed currency.
FT: Do you see the sell-offs we’ve seen in commodities as a drastic correction?
JR: Well, we’re in a period of forced liquidation of all assets . . . we’re getting the business cycle effect on demand right now, certainly, but unless the world’s in perpetual economic decline, commodities are the only thing going to come out of this OK.
FT: Does this mean you’re actually buying back into commodities at the moment, or is this an area you’re standing clear of?
JR: No, no. In October when I started covering my shorts in the US stock market, I started buying Chinese shares, Taiwan shares. I started buying commodities again. No, no, I’ve added to those positions.
FT: What’s your strategy towards emerging market stocks?
JR: My hope is that I’m smart enough and brave enough at some point along the line to buy some of them back. But I’m not even thinking about it right now . . . The world’s financial situation is in a mess, and there are a lot of people who have to liquidate. I mean, we must have had 30,000 MBAs flying around the world looking for emerging markets. All of that money has got to come home.
FT: How do you think the world should go about redesigning the regulatory system, and are you worried that we’re going to end up with a swing towards over-regulation?
JR: Well, we probably will. The problem is that people like Alan Greenspan would never let the market work . . . For 15 years, under Greenspan, and now Bernanke, they would not let the market work. Had they let Long-Term Capital Management fail, back in 1998, we wouldn’t have these problems now, I assure you. Lehman Brothers would have been smashed. Goldman Sachs, Bear Stearns, would have been smashed. We wouldn’t have these problems now. That only happened because every time they turned around they propped these guys up, gave them more money, and that’s why we have the problem. . . . But now, of course, they’re going to blame it on other people and cause more regulations.
FT: You’re arguing we need to allow some more big institutions to fail?
JR: One failed. Why didn’t they let Fannie Mae and Freddie Mac? I mean, I was short Fannie Mae, and they should have let it fail, go zero. AIG - they should have let it fail. They should have let all of these guys fail, and we would clean out the system . . . What they’re doing is, they’re taking the assets away from the competent people, giving them to the incompetent people and saying to the incompetent: ‘OK, now you can compete with the competent people, with their money.’ I mean, this is terrible economics. This is outrageous economics.
Should Reporters Have To Know What They Are Talking About?
…most print reporters and nearly all television newsreaders have little or no economic or scientific education - nor are they the sharpest knives in the drawer.
Forty-six percent (46%) of Americans say most reporters and media outlets try to make the economy seem worse than it really is, according to a new Rasmussen Reports national telephone survey.
Sixteen percent (16%) say most reporters and media outlets try to make the economy look better than it really is, while 25% say they present an accurate picture. Thirteen percent (13%) are undecided.
Investors are even more skeptical. Fifty-one percent (51%) say the media makes the economy appear worse than it actually is, compared to 40% of non-investors.
(See article China Set To Buy GM - Chrysler Top ...
A private analysis I am privileged to, found that most print reporters and nearly all television newsreaders have little or no economic or scientific education. Further a small study and analysis showed print reporters to have average IQ and television newsreaders to be somewhat below average in native intelligence as measured on the Stanford-Binet 5th generation scale that is the most up-to-date.
I must disclose that in 1960 as a completely hollow-headed boy I was an invited participant in the recalibration that resulted in the 4th revision of the standard Stanford-Binet scalling..
A Frightening Indictment from the Bailout
This extract was taken from the WSJ, an analysis from Seeking Alpha, in a surprisingly open piece, which seems to justify all the worries we all have concerning the nature of the US TARP $700 billion Bailout. While certain people blandly heave a sigh of relief at the supposed purpose of the bailout, certain other darker aspects of US banking behaviour have become very evident. This was bound to bubble and slither to the surface of this lumpy financial soup. The apparent greedy and fraudulent behaviour of the US banks is hardly surprising. Predictably, this is purely about survival - almost Darwinian in fact - this is about earning buckets of money quickly and easily, responsibility to shareholders, and about ‘winning’. I suppose we shouldn’t be surprised at the distrust, I guess we can all just sigh and yawningly dismiss it as just business as usual after all…
From Seeking Alpha:
The Wall Street Journal published something on its Real Time Economics Blog that we found to be extremely disturbing. Call us naive, but somehow we can’t help but feel that things are far worse than imagined after reading it.
Secretary Paulson clashed with members of the House Financial Services Committee during his testimony on Tuesday morning. He’s against using TARP funds to purchase troubled mortgage assets from the banks and Representatives are, somewhat justifiably, feeling as if Mr. Paulson is not following through on the intent of the legislation.
But that isn’t what’s troubling us because we believe Mr. Paulson is acting with the best intentions at heart and we also believe that members of Congress who voted for the TARP in good faith (and went to great pains to convince others to do so) are justified in grilling the Secretary pretty hard on why tactics appeared to have changed in mid-stream.
The problem lies with the reason Mr. Paulson is reluctant to use the funds in this manner, which he of course did not allude to during his testimony.
According to the WSJ:
Within the Treasury there’s a view that if the government is going to cover half the loss, banks will modify the terms of a loan for weak borrowers they know can’t make their payments, then foreclose and get the government to make up half the loss.
In other words, the Treasury feels that the reason it can’t use the funds in the manner Congress intended is because it believes the banks would act in an unscrupulous manner in order to subvert the intentions of the United States government at a time when the economy is facing its worst crisis since the Great Depression?
If the WSJ is correct this really is a terrible indictment on our society and out of all the things which have gone wrong since the crisis started in the summer of 2007, this has to rank as one of the worst. Is there no end to the greed?
Al-Qaeda releases venomous message for Obama
Raising questions of why these racists remarks are not made by Osama Bin Laden himself…..perhaps he is dead.
n an audio message released today, Wednesday, Nov. 19, Ayman al-Zahari, al Qaeda’s No. 2, said US president-elect Barack Obama was not an "honorable black American" but a "house n-word" like Colin Powell and Condoleezza Rice.
Obama’s plan to shift troops to Afghanistan would fail, said Zawahri, in a message appearing on Islamist websites. He added: "A heavy legacy of failure and crimes awaits you."
The specific website was not immediately announced. It has been widely reported that cyberwarfare experts have been frequently interrupting, disrupting and shutting down websites used by the terrorist.
Ballot Proposition Roundup (Partial)
…at all levels voters considered nearly a thousand referenda and initiatives on the November ballot.
Same-sex marriage bans passed in California , Arizona and Florida got a lot of attention and bring to 30 the number of states with prohibitions in their constitutions to block same-sex unions. A Connecticut judge decreed same sex marriage OK there. Voters in Arkansas stopped adoptions of children by homosexuals.
Voters in Colorado and South Dakota rejected sweeping bans on abortion that could have tested Roe v. Wade, the landmark 1973 U.S. Supreme Court ruling that provided women seeking abortions with legal protections. A third abortion measure — requiring doctors to notify parents of minors before performing the procedure — failed in California .
Washington became only the second state after Oregon to allow doctor-assisted suicide for terminally ill patients. Michigan lifted a 30-year ban on stem-cell research. Nebraska agreed to ban affirmative action. President-elect Obma is expected the end the ban on human fetal stem cell research by executive order as soon as he takes office January 20th .
Massachusetts rejected a plan to eliminate the state’s income tax, a proposal that could have cut the state’s budget by more than 40%. North Dakotans declined to cut the state’s personal income tax in half and reduce the corporate income tax by 15%, moves that would have slashed the state’s budget by about 17%. In Oregon , a proposal to allow residents to deduct federal taxes from their state income tax returns failed; the measure would have trimmed the state’s budget by about $1 billion. Coloradans refused to create a savings account for public schools that would have used money otherwise returned to residents as rebates under the state’s landmark Taxpayer Bill of Rights.
Voters in Massachusetts and Michigan relaxed penalties for the possession and use of marijuana. Massachusetts became the first state to decriminalize the possession of an ounce or less of marijuana via ballot initiative, while Michigan became the 13th state — and first in the Great Lakes or Midwest — to sign off on use of the drug for medical purposes.
Washington voters easily approved - by a 58.7%t to 41.3% margin - a “death with dignity” law modeled on Oregon ’s, which took effect in 1997. More than 340 patients have taken lethal prescriptions in the decade since Oregon ’s law was enacted. Some think doctor-assisted suicide is “something that could be coming down the pike in other states” after Washington ’s approval.
South Dakota voters rejected a proposal to repeal legislative term limits. Colorado rejected a plan to lower age limits for those serving in the General Assembly. Perhaps most significantly, Californians were considering giving redistricting authority to an independent commission instead of the state Legislature, a proposal that has failed five times before in the Golden State . With 99 percent of precincts reporting, the proposal was ahead by the narrowest of margins.
California became the latest state to approve a measure requiring more humane conditions for farm animals. But the proposal would not go into effect until 2015. Similar proposals won approval in Florida in 2002 and Arizona in 2006.
Credit crunch
Here’s the scariest thing about the credit crunch. We don’t know whom to credit anymore. In boardrooms and showrooms all over America all you see are incompetence, failure and overpaid losers. Entire industries are about to go away, to China, to Japan, to nowhere, and the best the CEO’s of America can do is beg. Business by the incompetent, of the incompetent and for the incompetent is killing us.
We’ve got the top job covered. I’m pretty sure we hired a competent guy for that. If anybody can pull off the miracle of making Washington work, Obama can.
But the rot in New York and now Detroit is devastating, and we don’t get to fire those idiots, like we did our nation’s First Idiot. It scares me to death.
I don’t know how you take an industry that thrived for a century, whose brands were once beloved, coveted and iconic as a GTO’s split grille, and drive it straight into the ground, just because gas went up for a couple of quarters. I don’t know how you plow through a hundred years worth of profits in two. Call me naïve, but I actually thought it wasn’t possible to screw up that bad.
This isn’t Amalgamated Buggy Whip we’re talking about. Cars haven’t gone away, they’re still as necessary as ever. It’s not even an American crisis, the Toyota plants in the USA will survive just fine. It’s a management crisis of what we still call The Big Three, for no good reason.
General Motors gone? Ford history? Chrysler, Chevy, Caddy disappeared? Who did that? Is it possible to be that stupid by accident? Or were the Big Three killed on purpose? Maybe there was a hostile takeover by the Republican Guard when we weren’t looking.
And, of course I mean the Iranian Republican Guard, not the GOP Republican guard. Not that there’s all that much difference.
Sorry, that was a cheap shot, but I’m feeling real cheap these days. Great Depressions will do that to you. And this one is looking greater every day.
Seriously, where is the competence? Wall Street firms that survived two world wars and the first depression killed dead in six months. Auto companies that put the world on wheels, now reduced to begging for bailouts, threatening to go bust and take the entire American economy with them.
I want to help, but I don’t consider Detroit’s current management credit worthy. It’s not just money they’re fresh out of, it’s ideas, it’s smarts, it’s competence. That’s the real credit crunch.
I’m scared that 25 billion won’t do it. Detroit has blown through several times that much in the past few years. There is no end to their failures. These guys could screw up a wet dream.
Hell, these guys did screw up a wet dream. Most of us had our first taste of sweet, forbidden sex in their products. I mean, they used to call it parking. You didn’t walk to Lover’s Lane, you drove. In daddy’s car. And it wasn’t a Subaru.
So, what’s the solution? I don’t know. If I did I’d be sending off my resume right now. But I have one idea.
From what I hear, Detroit is well-endowed with homeless people. That is a class of folks who have loads of experience in Making Do With Less. Surely there is among them a genius of thrift, an Edison of improvisation, a Rockefeller of the Streets.
Find him. Or her. Job one for the auto companies for the next few years will be begging. Why not hire a professional?