Obama announces the End of World War II

Well he has announced the end of the Iraqi War, and that end is due in 2011. In reality we will have withdrawn all troops from Iraq before the end of 2011. So that's when the Iraq war ends?

Based on that logic, he should pull all American troops out of Germany. Finally World War II, the seventy years of bloodshed, well mostly peace but lots of bloodshed at the beginning, will be at an end. The 50 year Korean War could finally be wound down by pulling US troops out of that country.

Evidently it's the withdrawal of troops that ends a war, not any of that "fighting battles" stuff we used to hear about. Based on Obama's latest announcements on our pullout, and the non-announcement that we are following Bush's plans to the letter, the media will be reporting that Obama plans to end the war in 2011.

The war in Iraq has been over for awhile. Granted it was declared over once before, when Baghdad fell. That was wrong. That was also then. This is now and the War has been over and it was won while Bush was calling the shots.

But why ruin fawning headlines with reality. Hey while you are at it Obama, why not get those nasty Normans off the British Isles, and bring that war to an end?! That Battle of Hastings is closing in on 950 years.

What's up with State of the Union

That's been a question for a few days. In every mention of this speech tonight, no one calls it a "State of The Union" speech. Neither did I. I've seen it called "State of the Union - like". Well I finally looked around to figure this out, and turns out the speeches we get in January of February are not always State of the Union speeches. The first speech of a presidency is not a state of the union evidently. Here's a good discussion of State of the Union speeches:

http://www.presidency.ucsb.edu/sou.php

The third paragraph gets you the recent history. Next year we will have a State of the Union, maybe.

For this year, Obama starts with a "we shall overcome the economy" message... and that's the right way to go. There's been quite a bit written about his Scare Monger in Chief style the last few weeks, especially here, hopefully we will now see a more proactive leadership style starting tonight.

.... and nary a negative word to be heard. Tonight was by far the most positive statements from Obama since becoming president. Trading would be a good way to judge the speech, Australia and oil are both non-reactive to the speech, but at least there's been no massive selloff. So the verdict is, cheer leading is good. Scare mongering is bad. Obama did a little cheer leading.

Details? There were a few vague references that could spell big trouble for our future. Rumor has it he wants to ax missile defense, and there was a vague statement tonight refering to that. Missile defense has been hated by democrats ever since it was a gleam in Ronald Reagen's eye. It is amazing technology that we need to protect ourselves against Iran's EMP scenario, if for no other reason. A successful EMP attack would set our economy back 100 years, and change the world overnight. The same people who ridiculed the idea of terrorist attacks against the US in the 90's today ridicule the idea of an attack from Iran.

Well, like I said there were no specifics. It was a good cheer leading speech. That's what was needed tonight.

Halloween coming early this year

Tuesday night we will have one trick or treater coming through, and since we didn't buy candy, I'm expecting a big trick. Obama plans an address to the full congress. Not unlike a State of the Union address. Or a declaration of war. It seems Obama will be dressed in his FDR costume, and I'm guessing we will be hearing some of the most dire, "depressing" statements about our economy yet.

I hope I'm wrong. The Scare Monger in Chief is getting a lot of help here, but talking down the economy works and I'm afraid everyone will be told exactly what we should think about our current economy tomorrow night. Those of us not out on a ledge, will be dragged out to one by Obama as he sets his own bar for performance to the lowest level yet. you see, he says that he inherits a 1.3 Trillion dollar deficit. Well, that's not really true. The $800 billion spent by Bush/Paulson and our TARP is not part of any annual expenditure. It was the bailout. Is he planning to do that bailout every year? It's already been matched by the so called stimulus bill, but that also is a one time thing. Obama has announced that he plans to cut the current "budget" in half. That means, believe it or not, he will be "cutting" our annual deficit back to $533 million. Really? Cutting it back to a larger budget deficit than Bush had at any time in his first seven years in office? Does anyone else get the feeling Obama plans amazing amounts of spending over the three years?

How will he talk us into spending all that money?

Here's the likely scenario for tomorrow night. Obama wants to spend huge amounts of money. To get everyone to go along, he will spend tomorrow night talking about the Great Depression II. That 's where we are headed if we don't agree to spend the money. Talk of a brighter future will apply not to next week or next month, but years from now. He will scare democrats to death, and republican Lindsey Graham who has already terrified himself talking about nationalizing banks, and this show under the big top will send the real economy further into the tank. He will have both halls of congress so that pictures reflect the proper gravitas needed to convince people, to trick people into thinking that thing's are really that bad. It's just like 1933! It will be an FDR moment, to help pass a budget to be introduced in a couple of days. I'm thinking.... a really big budget.

I hope I'm wrong, but just in case turn off the porch light on Halloween Tuesday, because here he comes. Booo!

Obama will not deliver on Wall Street

Obama talks tough on Wall Street today. Whether or not he deliver's on Wall Street is another question. After a month he has already discovered that talk is much cheaper than action. It was Wall Street's influence in his White House that changed up, or ambiguitized, Treasury Sec Tim Geithner's original plans for dealing with banks. Plans finally so vague that they caused a 500 point Dow day when they were announced a day late last week.

Here's Obama's new plan: treat income from trading OPM, "Other People's Money", like regular income, and tax it at regular income tax rates. Today George Soros, Warren Buffett and their ilk trade OPM and generate fee's based on the gains from that trading. Soros is theoretically retired, but still involved with his Quantum Fund. They then treat that income, the 20% fees, as if it were capital gains. So they pay taxes at a much reduced tax rate to what they would pay if that income were treated as if from doing a job that happened to involve trading. There are several points to be made.

Kudos to Obama, for the first time, for even mentioning it. However "IT" will never happen.

Every time we have had to listen to Soros or Buffett, billionaires both, say that the government should raise taxes, they meant that the government should raise your taxes and my taxes, not their taxes. Because they trade OPM they are on a different rate table than we are, and they have never spoken up when this issue has been raised in the past, nor will they now. "IT" was raised while Bush was president, and it got so little air play, and got so over-complexified, that today few know what "IT" is. Watch democrats flee this issue, like rats from a ship, when the phrase "taxing the rich" actually refers to billionaire hedge fund traders.

"IT" is one of the more bazaar and nonsensical aspects of US Tax Code so let's be clear. The line from OPM traders is that the money they make is payed to them directly from trading profits, and so their pay is literally capital gains, not income.

Here is capital gains the way you experience it. If you buy a stock, and later sell that stock, you will pay cap gains taxes on that stock. The taxes you pay are figured on the schedule D. If you held the stock long enough for it to qualify as long term capital gains, then you have a maximum tax rate, the "Capital Gains Tax" rate, that you pay. This rate changes a lot since it has been shown to be directly tied to economic activity. Both Bush W. and Clinton lowered Cap Gains Tax rates while president, and both times economic booms followed almost immediately. If you are wealthy enough to invest in a hedge fund, and the minimum is set by the SEC and was changed a couple of years ago but might be net worth of over $1000000, then your hedge fund profits would be treated the same way. See, you are risking capital in the markets. Your capital feeds progress, because companies go to these markets to raise money for their own new investments in people, equipment, marketing, or sometimes in other companies. Not unlike your savings accounts being used to loan money for new business creation by your bank. Your money is being used literally to fund progress, and in lieu of a flat tax system, the tax code rewards your behavior with lower tax rates on gains and dividends.

Hedge fund traders are not putting any money at risk. Not one dime. Their customers are, and pay Cap Gains rates as well they should. But to extend that tax treatment to the traders has never made any sense. They typically charge an administration fee, say around 2%, and they charge a piece of the profits, usually 20%, sliced right off the top. It is that 20% that turns traders like Soros and Buffett into billionaires. Because that cash is taken directly from proceeds of trading profits, they argue that their share of that cash gets identical treatment to the share that goes to the investor. For decades, this has been the case.

Their share should NEVER have been treated the same. They are not risking their own capital. Their investors are. Traders are paid from profits of trading. For one thing, if traders get the same treatment as the investor, then everyone who gets paid from those profits should get that treatment. To be consistent, if someone mows the lawn of the investor, that $30 should get treated as long term capital gains. There is NO difference. The Hedge Fund trader is being paid 20% for making good trading decisions, that is their job. Sales people for companies that build capital equipment get paid a % of what they sale, let's call that pay "commissions". Yet commissions are taxed at normal income rates, not at the rates paid by the corporation for their own gains from the sale of that equipment. Traders are taxed differently because their day to day activity resembles that of an investor or trader making profits from their own capital investments, but it is just a resemblance. They are not the actual investors, and should never have been treated as if they were the investors. They are just pretending to be the investors, by making trading decisions for those investors.

Would either Soros or Buffett be billionaires if they had been paying the same tax rates the rest of us had for the last 40 years? Good question. I'm thinking the answer is NO. When I see either of those men, I see two people who have the money they do because they have been allowed legally to cheat the tax code for their entire lives.

The business news media, and I guess we all know who I am talking about, will immediately obfuscate the debate in banalities that have nothing to do with the real issues. "Do Hedge Fund traders make too much money??" Remember that ridiculous discussion? It was just a couple of years ago. You can bet they will do it again. The real issue is as stated in this blog. Is the money paid from Capital Gains it's self Capital Gains. If it is, someone tell the guy doing the lawn!

Obama looses control part 3

Did the Attorney General of the United States call America a "nation of cowards?"

In the White House press briefing from earlier today, linked to in my previous post, just after the 26 minute mark, a reporter asked a question where he quoted our Attorney General.... let's say "Obama's Attorney General", as saying "on things racial, we are essentially a nation of cowards". Evidently this unbelievable comment was made several days ago.

Where is the outrage? Where is the story?? Why hasn't such an absurd comment been given air by the media. Unless of course, their job is to filter the news, and cover up loose cannons for the administration.

This guy is not a spokesperson for the president of Cuba, or Iran, or Venezuela. If he made such a hateful public statement about the country he is supposed to be Attorney General of, if his opinion of the people who pay his salary is so low that we are so despicable to him as to be cowards, then he should resign immediately.

Here is the exact quote: "Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and I believe continue to be, in too many ways, essentially a nation of cowards."

Where has this person been the last 45 years?? This is hate speech straight out of Jeremiah Wright's book of sermons. Probably what he really means is that he wants a different outcome in the race debate that American's have had, and that we continue to have. There are signs of bigotry in his statements, and someone who calls Americans cowards is probably very close to leveling that charge at one group of people above (or below) all others. Maybe there is one group that perhaps he feels haven't participated in the race debate to the extent that he thinks they should have. Because he's been waiting for some sort of apology. Some sort of "truth and reconcilliation".

I wonder if that commentary is frank enough for the AG.

Obama needs to tighten up this administration. The loose cannon quotient is off the scale just 1 month into his term. But the AG calling out his own country as a "country of cowards" is inexcusable. It doesn't matter what spin you come up with Mr. Obama, but Eric Holder must go. He is no longer qualified to hold any cabinet position for any American President.

Once again, Obama's top people and allies are completely out of control. Day by day, we see an underlying hatred for the rank and file people of the Untied States, and for the free market capitalist system, from Obama's top allies and cabinet members. Chris Dodd, Rahm Emanuel, and now AG Eric Holder, show us that with leaders like these, who needs enemies.

Obama looses control UPDATE

It seems a couple of hours after my last post, give or take, the administration moved to calm market fears, and mine, of a nationalization of the banking system. Not Obama directly, but White House spokesman Robert Gibbs, taking a break from attacking CNBC's Rick Santelli, said "This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring they are regulated sufficiently by this government. "

http://www.c-span.org/Watch/watch.aspx?MediaId=HP-A-15681

This statement caused large rebounds in the market before the close. The dow gained 200 points before closing back down 100. Bank of America closed about 33% higher than it's low for the day.

Markets can't be read well on an expiration day, the third Friday of each month. The real test of any statements will be next week. Does the Dow move above November's lows or not? That's the test for the market. The real test will be for Obama. He still needs to make a statement personally regarding his commitment to solving the banking problems within the confines of a private banking system. More importantly, he needs to grab Chris "Joe Biden" Dodd by the ear and muzzle him. We shouldn't hear the word "nationalization" leave Chris Dodd's lips... ever again.

Obama looses control of his party.

The market can yet crash, and Chris Dodd is doing everything possible to make it happen. Friday afternoon he makes comments on Bloomberg pushing the idea that nationalization of our nations banks is a real possibility, and big bank stocks started pushing to new lows. Remember, bank nationalization is a complete reversal of a free market economy. Haven't they learned anything from the lessons of Fannie and Freddie? If large bank stocks suddenly drop to zero, which is one of many effects of nationalization, then the American tax payers,are suddenly on hook for all they owe. We may owe money to some bank investors as well, possibly bond holders and maybe even preferred stock holders. Our accounts go from being insured by the government, to being deposits with the government.

I was always worried that congress would try to take over and nationalize the oil companies. Any nationalization is bad. Bank of America is protesting that they are profitable and have plenty of assets, and are in no danger of default. Does any of that matter to Chris Dodd? The last time there was a nationalization of an industry, and it railroads. It was such an unqualified disaster that nine months later all politicians were of a single mind when they dumped the companies back on the public. In nine months trains had gone from never running on time to never running.

The likely scenario would be nationalizing some of the larger banks but either way, until the administration says there will be no nationalization of banks, the stock market is in big trouble. If one happens, we could be looking at a drop of thousands on the Dow. This market was, in my opinion, ready to bottom, and it still could, but it will be held hostage by this controversy, and can only go down until someone like Geithner or Obama step up.

If we loose thousands of points in one day, it will have a shot of being the worst percentage down day in market history.

In the mean time, rumors that Rahm Emanual pushed through punitive measures toward wall street behind Obama's back, measure's that Obama was not entirely supportive of. Between Chris Dodd running the economy and Rahm E. running the White House, the nation may be at a precipice. It's time for Obama to take control of things. There needs to be a message this weekend that is very clear. No confusion nor vague generalizations to provide cover for an administration with several chiefs. That disqualifies Geithner as the messenger, it needs to come from Obama himself. No bank nationalizations. It must be taken completely off the table.

If that doesn't happen this weekend... watch out monday.

Earmarks to the Rescue

Now that congress has passed Obama's 800 gazillion dollar Earmark Stimulus plan, will Obama stop talking down the economy? My guess is he and the rest of the democrats have only yet begun to spend, so the answer is probably not. That's too bad. Eight years ago the media openly ridiculed Bush for speaking out loud about how bad the economy was before he took office. That was the word in DC back then.... don't say anything bad about the economy because if you scare people it only becomes worse. People stop spending, CEO's stop hiring, and the house of cards falls down.

Today that is happening, but now the media is cheering the scare mongers onward. The Great Depression 2 scare is going full steam, and the Scare Monger in Chief is Barack Obama. Between Obama's scare tactics and the mindless spending coming out of congress, well things are probably about to get worse. Amazingly, Obama has said that tax cuts didn't work to stimulate the economy. Many others in the media are echoing this line. So now the democrats and the media are pretending 2003, 2004, 2005, 2006 and 2007 were all just a dream. Sadly this is a case where ignoring history will not lead to us repeating it. Too bad, because the economy was in great shape for most of this decade, thanks to tax cuts.

Before we have a depression, we need to have a really bad recession going, and that's where Obama has a problem. Right now this doesn't come close to 1982 or 1973-74. Much less the 1930's. During Hoover's term the economy dropped 35% from high to low, before it started recovering. Recovering while Hoover was still president I might add. So far, the Great Depression 2 has seen the economy drop by 1.1%. Yep... you might want to come in off that ledge. The Great Depression was 3000% worse than our current situation.

So how bad are things really. For a great comparison between now and the big bad recessions, neither of which came close to being a real depression, try this out for size: http://www.cnbc.com/id/29163654

In the mean time, sure this could be a bad recession. The last two were pretty mild, but they were fought off by real stimulus. This one is being met by the same wild out of control spending we saw when we saw our budget surplus of 1998 pop it's head out of it's mole hole, only to be whacked back to sleep by a money-drunken congress. But I digress.

When you hear a congressman say that wildly spending money will save us, that we are all Keynesian's now, well remember that Nixon was the last guy to say that and he gave us 1973-74. Also remember that Keynes insisted that the way to recovery was paying people to dig holes, and then paying people to fill the holes back in with dirt. When Nixon and Keynes are at bat, playing it play by play, maybe we'd better get back out on that ledge.

Geithner Followup

I ran across this this posting from Larry Kudlow with similar, though more diplomatic concerns about the new Treasury Chief.

I worry about posting links because they tend to disappear, so we'll see how long this lasts:

http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_lawrence_kudlow/is_tim_geithner_ready_for_prime_time


In addition to questioning whether Geithner is ready for Prime Time, we get the revelation of who Geithner was really taking advice from when he watered down details from his plan. It seems the dog didn't eat his plan after all, it was his friends fom wall street.

Spiro Agnew phones it in

You may remember the former VP leaving office in 1973. You see, he pleaded guilty to not declaring $29,500 in income, and didn't pay taxes on that income. That used to be against the law, and politicians used to leave Washington when they got caught.

Today in the Obama "This time it's different" Era, politicians don't mess around with such trivial amounts of money. Tom Daschle stole, I mean "failed to pay", $120,000 in back taxes. That's not the income he failed to declare, that is the amount of taxes he has owed the American people. So Obama's new Socialized Health Care Czar decided, maybe that was a tad much. After much thinking, he decided to decline the appointment, for Obama's sake. Next stop prison?? Don't be silly, it's the new Obama Era. Daschle Obama-Friend is back doing what he was doing before, making and taking huge amounts of money as a lobbyist.

Along comes Tim Geithner. Former NY Fed chief. Now Geithner, it turns out, only owed $35,000 in back taxes. Again.... Agnew agreed to leave office because of failure to declare less than that in income. Geithner failed to pay tax bills over several years of $35,000, owed from his time at the IMF. Guess what else... the IMF payed Geitner that money so he wouldn't have to pay social security taxes out of his own pocket, but that money wasn't forwarded to the IRS.

The IMF compensated Geithner for his Social Security taxes owed to the IRS, Geithner pocketed this extra money as if it were a bonus, didn't even declare it as income, shades of Hillary, and then probably lied under oath to Congress about not realizing that he did the same things in 2001, 20002, 2003, and 2004. You know what Obama said? Geithner was too big to fail. Only Geithner can save the country from the next great depression. Geithner.... he's just sooooo smart!

Arguably one of the most corrupt presidencies in history, Richard Nixon's set ethical standards far exceeding those of Barak Obama's presidency with regard to all the president's men. Spiro Agnew resigned. Geithner, is welcomed to the fold as a hero.

Ironically, if that word applies to such a sad state of affairs, the heroic James Tiberious Geithner went on TV to tell America his little genius of a plan for saving our economy. It was such a sophomoric, generalizing speech that anyone could have given that the stock market just about crashed. Minute by minute, traders waited for the meat. The details of what the hero genius Geithner had planned. Especially after the speech had been delayed a day.... maybe the same dog that ate his tax returns also ate his recovery plan. So Geithner droned on with banal generalities, and the market crashed. Over 500 points from top to bottom. For days we had heard he would be proposing a fix to the "mark to market" accounting rules that in a very real way led to our current economic mess. Nothing.... nothing even close to that specific. In other words, there is no plan. In other words he's just guessing. He didn't finish his homework in time for class. The hero Geithner owed America a plan, and as usual Geithner didn't pay up. He phoned it in.

Note to Obama, I'd have someone double check Geithner's tax returns the next four years, cause he's still the same old fraud.