Politics

Discuss the politics of the day. Whether it be policy or elections we are eager to discuss all topics.

Andrew Cuomo, can NY ever catch a break?

By Ray on March 3, 2010

Haven’t we learned anything about legacy political leaders after the Bush years and countless other Congressional leaders who “inherited” their seat from a parent? Part of the reason the US is in shambles is because we elect these people, why I do not know, and they are ignorant about the problems the country faces. It is no secret that Mario Cuomo was extremely liberal and responsible, in my view, for NY States horrible financial condition because of his socially liberal programs. While I was young during his reign even I knew he was a terrible governor, but we elected Pataki twice so New Yorkers are not known for picking the better candidates.

Now we might be living under another Cuomo who is also a terrible leader and, as Dick Bove claims, largely responsible for the GSE’s collapse. According to Bove, Cuomo’s relentless pursuit to force Freddie and Fannie to loan to the poor led to the GSE’s into buying sub-prime mortgages and eventually their collapse. Frankly, in my opinion, Mr. Bove is correct, you will not hear me agree with Bove much I might add. Cuomo took the GSE’s and many banks to court because of discrimination, some of which I am sure is true, but his main problem was that banks were not loaning money to the poor. Now, I am not a rocket scientist, but I do know if you loan money to poor people who do not have the ability to pay back loans they will eventually default. The banks knew this and that is why they did not lend money to the poor, yes, some discrimination probably existed though.

Because of his zealous behavior we know have had to guarantee Freddie and Fannie for unlimited losses, which is also why the Fed will stop buying MBS’s as well because the GSE’s can now pick up the slack. With NY in such dire straits, and we are, is it wise to elect another lawyer to the governors position? I think not. Surprisingly, I actually like our current governor, who is a Democrat, because for all of his faults he realizes what a horrible position NY is in. He is actually trying to cut spending, but is met with the same corrupt response from the unions and Assembly that usually appears when you try to take money away from their interests.

Patterson is a mess and not the best person for the job, but I would vote for him over Cuomo any day of the week. Of course, Obama and other NY Democrats want him out, are you really surprised over the recent scandals breaking? My belief is that these timely scandals are appearing because Patterson is trying to cut spending which will impact many social programs like schools and welfare. Those are the Democrats pet projects and by cutting spending there, which is the primary reason for our fiscal distress I might add, he was a marked man and is now out.

Cuomo will be a party man upping the spending as much as the market will allow, but that will not be too much more given our deficits. He will do what he is told and not make those hard decisions because he is just like his father, a tax and spend liberal without the knowledge on how to pay for it. It is far easier to get reelected when you make your base happy and paper over the major problems. However, our problems here are so severe they cannot be papered over any longer. They have already robbed the highway and bridge trust fund to pay for the interest on our debt, that money was supposed to be secured for, well, highways and bridges.

How anyone can look to this man or to the Democratic Party in NY is beyond me. They have shown themselves to be horrible when it comes to financial issues and refuse to make the hard decisions. I am referring to NY Democrats not Democrats nationwide. I will not vote for him and I will find it difficult to vote for the Republican challenger, Rick Lazio is potentially the R’s candidate, because politics in NY have not changed. They simply pick the next person in line who is ‘due’ for the next run at a major office. I almost hope we go into receivership as it will let some sane court appoint conservator to get rip of the ridiculous contracts the unions have and, ultimately, uncover all of the corruption we know exists, but has been masterfully hidden from the public.

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Posted in Politics | Tagged Andrew Cuomo, banks, congressional leaders, democrat, governors, gse, liberal programs, mario cuomo, mr bove, NY state governor, NYS, political leaders, sub prime mortgages | 1 Response

And the Moron of the Week Award goes to…

By Ray on March 2, 2010

Senator Jim Bunning who was more upset over missing a basketball game than helping his fellow citizens by objecting to an extension of unemployment benefits. Now, keep in mind it was Senator Bunning, (R) from Kentucky, who prevented himself from seeing his precious game and could have easily DVR’d it, or better yet just stopped his foolish objection to the measure. I just do not get how this guy could balk at a minor, considering the size of other bills recently passed, $10B in spending that goes directly to the people and not to banks is simply beyond me.

Mr. Bunning could have stopped the spending of hundreds of billions of dollars in the past, but decided that this measure, a true sign of how horrible the economy really is, was the time to take a stand against spending. He had no problem voting for Bush’s crazy spending without those programs being paid for, but this $10B for an extension of unemployment benefits, wow. There is simply not much to say about this guy except e will not be missed when he retires this year. I am willing to bet that if we add up all the freebies he gave to corporate America this extension of unemployment benefits probably would be close to the bottom of the list as far as the price tag is concerned.

I am totally against spending without paying for it, I think we all are, but there are exceptions to the rule. When you are cutting off millions from badly needed benefits that pay the mortgage and put food on the table for those who are unemployed I think that qualifies you for being heartless. There are currently 6 people searching for every 1 job in America. The percentage of people collecting unemployment benefits for 26 weeks or longer has never been higher. We are 2 years into this recession and we are still losing jobs and this is the type of representation we have in Congress?

I think there is no wonder why Americans, and the Brits now, are signing on to the Tea Party, at least they are not the same 2 irresponsible parties we have to choose from now. I realize what the Tea Party is and am not a huge believer in it, but I get what the average person believes, it is something different than the status quo. Unfortunately, the founders are probably a bunch of right wing nut jobs trying to bring the country back to a hard right path. Regardless, with leadership like we have now there is no wonder why people are seeking something new and different, but we should always be careful what we wish for.

The bottom line is that Senator Bunning is a jackass and whatever axe he has to grind he should leave the American people out of it. When you think about it, you must really be a screw-up when your own party says that you do not represent the body of the whole and side with the opposition against you. Think about that Jimmy.

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Posted in Politics | Tagged billions of dollars, collecting unemployment benefits, congress, corporate america, jim bunning, objection, recession, senator bunning, senator jim bunning, tea party, unemployment | 2 Responses

Uneasy feeling

By Ray on February 28, 2010

As I conduct my regular daily readings of various blogs and news sites I cannot help to get a very uneasy feeling brewing out there. The negativity is running very high in the political realm and from those who report on economic events. I keep seeing tag lines like; “expect more social unrest” when people report on things like the Berkley protests, which are disturbingly violent I might add. When I hit my favorite Libertarian blogs the feeling is more uneasy as I keep seeing words like revolution being used.

When you add in the Washington factor where our elected leaders are going to hammer unpopular legislation through, with no compromise, it makes me even more uneasy. There is no doubt that we need to make painful decisions in order to get our fiscal house in order, but that usually means less spending, not more. Unfortunately, our current political leaders do not see it that way and are hammering through more spending, in particular the health care reform bill. Look, I know we need to do something, but not this. Deducting money from Medicare and then adding it back in to other areas is not rational, this bill is not paid for and will make costs rise not fall.

Regardless, people are not happy about unpopular legislation being thrown down their thoughts. The kicker is that people like Nancy Pelosi come out and say that programs like Social Security and Medicare were unpopular when they were enacted. I guess what she means is that politicians know what is best for Americans and we should keep our mouths shut. We all know how right politicians are their track record speaks for itself just look at the stellar decisions they made over the last 10 years. Iraq was a great decision, the prescription drug coverage was fantastic (albeit unpaid for), the PATRIOT Act was a winner, free speech zones were fantastic, how many stimulus bills did we have again – they worked out well, eliminating a paper trail for voting is a sure disaster waiting to happen, and need I go on?

Politicians do not know what is good for Americans, they know what is good for them and getting reelected. Well, they did used to know how to get elected until now. If they pass this next unpopular batch of legislative nightmare on the docket they are in for a rude awakening come November because the people are coming for them. My only hope is that people come for them at the polls and not in any other way. Based on what I have read combined with the recent plane crash in Texas into the IRS building I think we might see more people going out to make a statement. Meaning, some nut job will more than likely blow something up or worse.

Who knows what will happen in the future, but we know that the average person feels left out right now. Wall Street got their massive bonuses and, for them, nothing really changed with the exception of having to play defense in the media. At the end of the day, the average person knows they got nothing over the past 2 years except for a higher future tax bill and, maybe, they got to keep their job, but we know about 20% of Americans were not so lucky as they are either unemployed or underemployed. Wall Street though, they are fine. Washington, well, they are doing OK as well as campaign contributions, from Wall Street, are still coming in and many have received raises. Clearly, there is a double standard and John Edwards was completely right when he said there are 2 Americas.

Discontent is here and that discontent could become a powder keg if not rectified. The unfortunate thing is I do not see how the public can be pacified, especially as this thing we are in deepens as we are now seeing. Things could get ugly and politicians need to figure out that they are representing the people and start acting that way. It is beyond me how they cannot see that Americans view them as being on the wrong path, but, again, that is politics and they will be surprised if they get voted out in November.

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Posted in Politics | Tagged free speech, health care reform, medicare, Nancy Pelosi, patriot act, political leaders, politicians, protests, social security and medicare, social unrest, stimulus | Leave a response

Uncertainty

By Ray on February 21, 2010

I was reflecting on events this past weekend trying to put a game plan together and weighing what is going on in the world. I can honestly admit that I do not know what will happen, no one ever really knows, but I do know that things are very uncertain in our world. We are all in the same boat and trying to make decisions that are best for our families, our wallets and our piece of mind. Unfortunately many of the things we are planning for are outside of our control.

It is reasonable safe to assume that our futures never depended more on the decisions that are coming out of Washington, well, at least not since the 1930’s at least. However, Washington is now only one piece of the pie as our world is walking in stride as one. While decisions in Washington directly impact our lives, for the love of God pay attention to what they are doing, now we are also faced with the consequences of decisions that come from China and the EU. Decisions made overseas will have a direct impact on what happens here in the USA and on our investments. Never before have the world markets have been so in tune with each other. In fact, you would be surprised to see that the correlations between all the markets follow each other so closely over the past 6 years or so.

This correlation has really put the efficient frontier and diversification risk reduction strategy into question. In other words, diversification between international and domestic equities might not reduce risk as much as we think, I will get charts to prove that when I get the go ahead to publish them. The irony is that it is not so much markets ruling the day, but politics. The decisions that come from governments now impact the markets much more than you might care to realize. This is important considering that government stimulus from around the world is largely responsible for propping up global growth at this point in time.

Domestically, I was watching parts of CPAC this weekend and was extremely disappointed in what I saw. Granted, I did not watch the whole thing, but enough to know that the R’s, as in Republicans, have no idea what they are doing. Unfortunately, either do the D’s, as in Democrats, know what they are doing either. Both parties fail to take responsibility for their actions and neither party really understands the issues facing the country at this point in time. Sure, they talk a good game about fiscal responsibility, but neither is serious and, frankly, the R’s have grown government way more than the D’s have over the past 30 years. In fact, Ronald Reagan had grown the deficit by a whopping 189% yet we credit him with being a fiscal conservative, huh?

While many of you may think I am a right winger I am not, I am a political atheist. It is not that I do not take a stand on any issues or beliefs I have just come to the conclusion that the party I would belong to simply does not exist at this time. If I were to align myself with any party it would be the Libertarian Party on the strong money principle, but I also recognize that the free markets will never be able to regulate themselves. The proof of this was 2003-2007 as the free market rolled on and some Einstein somewhere thought it would be a good idea to push no document loans to anyone who would be foolish enough to take one. You cannot honestly tell me that these incredibly smart people did not know these things were bad loans at the time. They knew and they also knew that they only needed a couple multimillion dollar bonuses to be happy.

My point is that we have no real political leadership and they simply are pushing what they believe is the right policies. However, they do not know what they do and they do not understand that the problems facing America are those silly policies to begin with. To them, though, it is all about reelection and keeping their power, if that is not a true statement then we would have had term limits on Congress instituted decades ago, but we don’t. It comes down to the real fundamental problem in America is that we do not have the will to make those tough decisions. I really believe that the products we buy demonstrate our beliefs and we have way to many “I” products being bought which means we all only care about ourselves.

All of this adds to the uncertainty that I feel and the feeling I have in my gut is growing by the day. There are so many problems out there that are not being addressed and when we do address them we simply throw billions of dollars at it which merely wallpapers over the roots of the problems we face. The very problem that we have is that we are waiting for Washington to solve our problems. How can we expect self serving Congressman or Senators to solve the problems we face? Half of them are multimillionaires and the other half are probably on the take somewhere along the way. Yet we trust them to solve our problems or understand the average person, good luck with that.

I watched this weekend as former politicians lambasted Obama while they ignored their roles in the problems we have. I watched them blatantly distort the facts about where we are and how we got here, sorry folks, but it took a whole lot longer than 1 year to get to where we are. I watched them roll out with no new ideas or inspirational speeches and I distinctly got the feeling that they simply think that because they have an R in front of their name they will get elected because they are different from the President’s party. Maybe they will, but I think it will be much harder than they think because 10% unemployment, 18% by U-6 or much higher if we re-add the people the BLS removed from the labor force, is a real problem that both parties have to take responsibility for.

On top of the domestic political uncertainty we have global uncertainty. We have Europe in or on the brink of a major crisis with the PIGS. We have China who is really upset over us, do you blame them (?), over selling weapons to Taiwan and the Dali Lama, not to mention the mini trade war we have brewing. China is also taking their stimulus off the table, or so it appears, along with India. Those economies play a huge role in the global growth story and if they are tightening their belts this is a problem for that story.

Finally we have Iran, of how I love the nut jobs in Iran, whose leaders are actively seeking to become a nuclear country. While they technically are a nuclear country they want to take this to a much higher level with missiles and warheads. Call me crazy, but I have a real problem with a country that has loose cannons running it and they have reached a level where they have nuclear fuel along with a missile that can reach orbit. Sorry folks, but the story about the mouse they launched into space was not about a mouse and it shows their intentions which should make us all very nervous. Thank God I do not have to make policy decisions about what to do about them. I just hope Obama and company make the right decisions in regards to handling them.

All of this uncertainty is not being felt by me alone, but by millions of people. There seems to be no end to it and as each day passes more uncertainty gets added to the fire. The odd thing about this is that the markets just do not care. I guess when computers trade some 60% of the volume on the exchanges, according to CNBC, the uncertainty does not matter. Regardless, it is clear that no matter who is in charge or making the decisions their options are becoming very limited and the outcomes are all looking the same. The best case scenario I foresee is massive inflation and dollar devaluation, over a few years time, and the best case scenario is massive inflation and dollar devaluation.

As I stated earlier, the only thing we can do is pay attention to what is going on and make the best decisions we can for ourselves and our families. I have several friends, smart people I might add with CFA’s and MBA’s, who are leaving the country or adhering to the guns, gold and God philosophy. I have honestly never seen such smart people head for the hills like this before. I am not in that camp, although I do love gold and precious metals, but they might just be right. However, it is possible, I guess, that all of this uncertainty will pass by and everything will be fine, but mathematically speaking, well, I give that a very low probability.

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Posted in Economy, Politics | Tagged deficit spending, diversification, global growth, governments, PIIGS, recession, stimulus, uncertainty, US government | Leave a response

The problem with grading yourself

By Ray on January 10, 2010

We are all a little biased towards ourselves and most people are likely to not judge themselves harshly. Even mass murderers tend to justify or view their actions as moral or for the greater good, well many of them anyhow. My point is that when we are faced with a question about our performance we tend to spin it in the best possible light, another great example is Goldman Sachs spinning their huge bonuses as God’s work. The reason why I bring this up is because our President was asked to grade himself during an interview a few weeks ago and he gave himself a “solid B+” which is absurd.

The reason why he should have avoided the question altogether is because he has not completed one campaign promise to the people, except for higher taxes. Health care was done behind closed doors, Gitmo is open, Iraq is still somewhere, Afghanistan is getting more involved 9a big mistake I might add), and unemployment is sky high (add back in those “marginally attached” people and we are pushing 11%). Let us not forget that the annual deficit is 4 times what it was under the last President, who was certainly no peach, and we are quickly approaching 100% debt to GDP, not good.

All of this while Democrats keep blaming Bush for everything and the Republicans accept that argument, what? Oh, how quickly we forget the recent past. Before I go any further I did not like Bush, at all, and firmly believe he was one of the worst President’s of all time, so save the hate mail. However, Democrats are just as guilty of where we are today as the Republicans as they were ushered into power in 2006 in congress, the real power in politics. They rebuffed any attempt to rein in the GSE’s and they rubber stamped all of bush’s policies for 2 years. So, to say “we inherited this problem” is utter nonsense and has to stop.

When you have the power to say no and stop crazy spending and you do not you are just as guilty as the person who proposed it. That is exactly what the Democrats did for 2 years and to make matters worse, they simply allowed things to continue the way they were without a peep. Don’t believe me, check YouTube.com for the GSE hearing meetings or go check Democrat voting records for raising the debt ceiling, 7 times. They did not inherit anything, they helped create it, end of story.

If you actually believe that they inherited all these messes and did nothing to create them then you have a poor knowledge of politics, history or simply are blinded by partisan politics. I, on the other hand, do not care as I see all politicians for what they are, parasites on the backs of the American people who care about 2 things, reelection and power, not necessarily in that order. To sit here now and say that the stimulus is working is simply crazy, babbling, rabid partisan bickering because it is clear that it did not. If it did work GDP would not be at 2.2% in 3Q09, I know we will get an initial estimate of 4 or 5% for 4Q09, but that to will be adjusted lower and will be all government heroin.

Never before had the US government spent $787B in any stimulus plan and not seen any results. Instead the best argument Democrats can muster is that it stopped us from going over the abyss, oh really? Are these the same Democrats who said that not all the money has come into the system yet so we don’t know how well the stimulus is working? So, how can you say that on one hand it stopped us from falling off a cliff, but on the other hand say we don’t know how well it is going to work? You can’t because that is political double talk for we spent a bunch of money on stuff and we made many mistakes, but will not admit it. Instead, they decide to lie to us and then launch secret stimulus packages, i.e. the jobs bill passed at the dead of night.

What no one ever talks about is this, what would have happened if the stimulus was not enacted? I am willing to bet that things would have probably followed about the same track it is following now. Well, I think there would have been an exception to that, employment would have bottomed sooner and we would be seeing real recovery a lot sooner. Considering even Jim Cramer has admitted that the CEO’s he has spoken to have not seen one dime of stimulus I am pretty sure that the stimulus did not work at all. I mean, even the government is not adding tons of jobs, yet, until the census begins. Of course we do have more government employees making over 100K than ever before in history, but who cares, right?

If the original stimulus saved us and is going to get us back to growth then why in the world do we need a second stimulus? Simple, the first one was the greatest fleecing of America next to TARP in the history of the world. However, never fear because it is all Bush’s fault, a year later. I absolutely hated it when Bush blamed Clinton for the recession in 2000 just as much as I hate Obama blaming Bush now for one simple reason, the President has very little to do with the economy. I say that with a caveat, unless they implement policies that impact the economy like ridiculous stimulus packages, unpaid for tax cuts or Medicare advantage plans and things like that. What I mean is that the last 2 administrations, in my opinion, have had a greater impact on the economy than previous administrations mostly because of their lackeys in Congress happen to be in power at the same time.

Because of the absurdity of what is going on, even though I cannot stand the hypocritical Republicans, I am praying the Republicans take all of Congress in November and grid lock this thing for the next couple of years. Why would I want that to happen? Simple, I do not want my currency to be toilet paper around the world and I certainly do not want more spending. I also do not want more unionization of government employees, we need more firings in government, not hiring’s or raises. What I am trying to say is that we need balance restored back in Washington, it worked in 1994 and perhaps it could work again.

In the meantime, our President should not be issuing any grades for himself as he certainly did not earn a “solid B+” as I am pretty sure his math teacher would have flunked based on his estimates on health care costs and budget deficits. I am fairly sure a big “I” is what the President should have given himself for incomplete since he has not even kept the transparency promise he made. When C-SPAN says what is going on, you got an image issue Mr. President. So, keep some promises, fire some government workers, starting with all of you Czars, and let’s really figure out the deficit before the dollar does crash.

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Posted in Politics | Tagged bush, campaign promise, congress, democrats, economic recovery, Economy, Goldman Sachs, health care, obama, Politics, unemployment, US dollar | 1 Response