The American government doesn't like Santelli saying how the world is nowadays:
Sunday, 8 November 2009
Restoring the deficit
Today’s video features Tim Geithner at meet ‘Meet the press’
In the beginning the interviewer asks ‘Where are we going to be a year from now?’ [ regarding the deficit]
What very much pleases me is that Geithner says the deficit is too high now; but he doesn’t seem to be very much willing to say this has be done by raising taxes.
But he’s first going to restore growth and create jobs. Creating jobs seems to be easy; restoring the GDP might be achieved in the same way.
According to the website www.shadowstats.com the GDP annual growth has been overestimated for years now:
In the beginning the interviewer asks ‘Where are we going to be a year from now?’ [ regarding the deficit]
What very much pleases me is that Geithner says the deficit is too high now; but he doesn’t seem to be very much willing to say this has be done by raising taxes.
But he’s first going to restore growth and create jobs. Creating jobs seems to be easy; restoring the GDP might be achieved in the same way.
According to the website www.shadowstats.com the GDP annual growth has been overestimated for years now:
This doesn't mean that I think they should start raising taxes right away and restoring the deficit; government intervention isn't bad in times the economy is collapsing and a further fall in consumption would be killing.
However, I hope the administration doesn't forget to look at the real figures instead of the figures they publish to keep everyone happy...
Saturday, 7 November 2009
"The banking establishments are more dangerous than a standing army"
Today’s video features a battle between Rick Santelli and Steve Liesman :
According to Steve everything is fine; his statements really make me think of what John Connolly, former mister of Finance in the USA, said in 1971 : “The dollar is our currency, but your problem.”
I do agree more with what Rick is talking/yelling about, he hits the point I’ve been talking about for weeks now: “Our leaders dilute dollars to pay for the sins of everyone.”
Also came across Dylan Ratigan’s Halloween costume:
It’s not only incredibly funny, he also makes some good points: The point where we are today is incredibly similar to what Thomas Jefferson was afraid of in the late 18th century when the first bank of America was created: “A bank takeover of the government that would leave taxpayers as slaves to bankrun gambling casino’s”
According to Steve everything is fine; his statements really make me think of what John Connolly, former mister of Finance in the USA, said in 1971 : “The dollar is our currency, but your problem.”
I do agree more with what Rick is talking/yelling about, he hits the point I’ve been talking about for weeks now: “Our leaders dilute dollars to pay for the sins of everyone.”
Also came across Dylan Ratigan’s Halloween costume:
It’s not only incredibly funny, he also makes some good points: The point where we are today is incredibly similar to what Thomas Jefferson was afraid of in the late 18th century when the first bank of America was created: “A bank takeover of the government that would leave taxpayers as slaves to bankrun gambling casino’s”
Friday, 6 November 2009
Yes we can!
President Barack Obama is capable of doing amazing things. The economic recovery program managed to save 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan.
Problem is, however, 508 people work there.
According to an article by the Associated Press about two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren’t saved at all… Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren’t saved.
You would say the government would do their best to correct these errors. Very surprisingly the spokesman for HHS said : “If I give you a raise, it is going to save a portion of your job.”
Excuse me?
I thought we were stimulating the economy to get it out the recession and to maintain social stability by making sure as many people as possible can maintain their current job.
But apparently according to the US government we saved jobs if 2 people got a raise of 60% and 1 got redundant. This manipulation of data must stop!
According to the same article there has been hundreds of programs using nearly 323 million USD to provide pay rise and other benefits to their existing employees.
For example: The Bergen County Community Action Program in Hackensack, N.J., noted the nearly 213,000 USD it received went to cover raises for existing staff only, but it also reported saving 85 jobs.
At our first example the director said she just followed the guidelines the Obama administration provided. She said she multiplied the existing employees by 1.84 – the percentage pay raise they received – and came up with 935 jobs saved. “I would say it’s confusing at best (…) But we followed the instructions we were given.” She said.
Problem is, however, 508 people work there.
According to an article by the Associated Press about two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren’t saved at all… Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren’t saved.
You would say the government would do their best to correct these errors. Very surprisingly the spokesman for HHS said : “If I give you a raise, it is going to save a portion of your job.”
Excuse me?
I thought we were stimulating the economy to get it out the recession and to maintain social stability by making sure as many people as possible can maintain their current job.
But apparently according to the US government we saved jobs if 2 people got a raise of 60% and 1 got redundant. This manipulation of data must stop!
According to the same article there has been hundreds of programs using nearly 323 million USD to provide pay rise and other benefits to their existing employees.
For example: The Bergen County Community Action Program in Hackensack, N.J., noted the nearly 213,000 USD it received went to cover raises for existing staff only, but it also reported saving 85 jobs.
At our first example the director said she just followed the guidelines the Obama administration provided. She said she multiplied the existing employees by 1.84 – the percentage pay raise they received – and came up with 935 jobs saved. “I would say it’s confusing at best (…) But we followed the instructions we were given.” She said.
Is Buffett losing his Triple A status again?
Triple A is short for an AAA rating, this is a rating that is made by agencies like Moody’s, Standard&Poors and Fitch.
According to Standard&Poor’s the acquisition of Burlington Northern Santa Fe is lowering Berkshire’s liquidity position and therefore the risks of investing in Berkshire would become higher.
However, this doesn’t have to mean this is a bad bet. As I stated in my last post I think it even is a great and genius bet. The reputation of the agencies are severely damaged by the credit crunch: some of the agencies (including the bigger ones mentioned above) used models to predict the US housing market in which the housing price could not decline.
When the housing prices suddenly started to decline they had to change their models and some products (primarily repacked CDO’s) were rated from the best possible rating AAA to the worst CCC in one day.
Berkshire’s Triple-A status was already taken by Moody’s and Fitch earlier this year based on losses in the derivates market. According to Buffett himself the loss of the top-rating would have no economic impact on Berkshire. He said he might just lose a bit of his pride…
According to Standard&Poor’s the acquisition of Burlington Northern Santa Fe is lowering Berkshire’s liquidity position and therefore the risks of investing in Berkshire would become higher.
However, this doesn’t have to mean this is a bad bet. As I stated in my last post I think it even is a great and genius bet. The reputation of the agencies are severely damaged by the credit crunch: some of the agencies (including the bigger ones mentioned above) used models to predict the US housing market in which the housing price could not decline.
When the housing prices suddenly started to decline they had to change their models and some products (primarily repacked CDO’s) were rated from the best possible rating AAA to the worst CCC in one day.
Berkshire’s Triple-A status was already taken by Moody’s and Fitch earlier this year based on losses in the derivates market. According to Buffett himself the loss of the top-rating would have no economic impact on Berkshire. He said he might just lose a bit of his pride…
Thursday, 5 November 2009
Buffett's secret
Warren Buffet, world’s most famous investor, acquired Burlington Northern Santa Fe this week. It has been the biggest investment of Buffet all time.
Since around halfway the recession Buffett started to talk about buying American shares again; he said he might be for 100% invested if the prices kept declining. However, prices kept declining and he kept tens of billions of cash.
So what’s happening? Isn’t Buffett certain about the future of the market? What is it Buffett can be afraid for?
In his column in the New York times he wrote: “ In nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenback emissions.” (…) For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.
To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 per cent of the gross domestic product. This fiscal year, though, the deficit will rise to about 13 per cent of the G.D.P., more than twice the non-wartime record. In dollars, that that equates to staggering 1.8 trillion. Fiscally, we are in uncharted territory.”
“During this fiscal year, it (the ‘net debt’ of the United States) will increase more than one percentage point per month climbing to about 56 percent from 41 per cent. Admittedly, other countries, like Japan and Italy have far higher rations and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this and we will find out.”
This is what he is afraid for, inflation!
Buffett said in 1977 that in times of inflation it is fantastic to own a toll bridge. The investments are done. The bridge is built with old dollars and doesn’t have to be replaced: money keeps flowing in.
Is Burlington Northern Buffett’s toll bridge? Isn’t this a way to secure his cash against the inflationary pressures?
This might be the perfect hedge: Buffett can easily just increase the price of using his rail and he is fine.
I think this is just another perfect move of Buffett; in the press he states that this is a bet on the American economy but I personally think he is betting on something completely else and closer to the opposite: He’s betting on inflation.
And for people who don’t have 44 billion to spend? I think gold, silver and platinum are good hedges.
Since around halfway the recession Buffett started to talk about buying American shares again; he said he might be for 100% invested if the prices kept declining. However, prices kept declining and he kept tens of billions of cash.
So what’s happening? Isn’t Buffett certain about the future of the market? What is it Buffett can be afraid for?
In his column in the New York times he wrote: “ In nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenback emissions.” (…) For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.
To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 per cent of the gross domestic product. This fiscal year, though, the deficit will rise to about 13 per cent of the G.D.P., more than twice the non-wartime record. In dollars, that that equates to staggering 1.8 trillion. Fiscally, we are in uncharted territory.”
“During this fiscal year, it (the ‘net debt’ of the United States) will increase more than one percentage point per month climbing to about 56 percent from 41 per cent. Admittedly, other countries, like Japan and Italy have far higher rations and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this and we will find out.”
This is what he is afraid for, inflation!
Buffett said in 1977 that in times of inflation it is fantastic to own a toll bridge. The investments are done. The bridge is built with old dollars and doesn’t have to be replaced: money keeps flowing in.
Is Burlington Northern Buffett’s toll bridge? Isn’t this a way to secure his cash against the inflationary pressures?
This might be the perfect hedge: Buffett can easily just increase the price of using his rail and he is fine.
I think this is just another perfect move of Buffett; in the press he states that this is a bet on the American economy but I personally think he is betting on something completely else and closer to the opposite: He’s betting on inflation.
And for people who don’t have 44 billion to spend? I think gold, silver and platinum are good hedges.
Wednesday, 4 November 2009
Ponzi scheme?
Came across another very interesting acticle on zerohedge.
The chart shows how manipulated the market currently is; it shows Goldman's YTD trading record: in 194 trading days this year the firm was able to make 100 million in 116 occasions.
One trading day resulted in a 100 million revenue for 116 days!! That's equalling at least 11,6 billion in those days only.
The firm just lost money on three days of the last two quarters and there are serious thought about this being a ponzi scheme. "Is this comaprable to the returns generated by a ponzi scheme? Absofuckinlutely."
I actually don't think this is a ponzi scheme(the returns might be equal, but this is - as far as I know - not because of a scheme but because the banks got to buy the assets with taxpayer money when the entire ecoomy was collapsing) but I am worried about the showed revenues; they are way too high to be normal and are very unsustainable.
The banking system is terribly ill. Do you remember the stresstests for banks last year to check whether banks are solvent or not? The official unemployment rates are far higher than the highest estimates in this stress-test and therefore it would be a very logical thought to opt for a new stress-test for banks. One that takes inflation, higher unemployment rates, creative accounting and negative economic growth into account.
Why didn't the government do so yet?
My assumption is that if we do a stress-test as described above new problems(the problems I've been warning about for a few weeks now) will be revealed for everyone since the stress-test results are probably being discusses on the news and the internet.
This might cause a breakdown in the system because people won't rely on the banks anymore and will see that they're everything except for solvent...
Tuesday, 3 November 2009
"TARP on steroids"
Came across some interesting videos.
The first video features Dylan Ratigan of MSNBC talking about the testimony before congress regarding new regulations aimed at alleged “too big to fail” banks.
He hits the point:
He is NOT happy with Geithner’s plan, it would “Let the banks steal all the money”. The banks are allowed to take infinite risk with taxpayer money, where the banks take the upside and we take the downside.
“WHY is it legal for the US banking system to take infinite risk to use money for the largest gambling machine in the world?”
His guest does come up with a way we could possibly partially solve the problem we’re facing : “The bankruptcy law nowadays is that you had to protect the people that lend the money to the banks for 100 cents on the dollar.(…) But you can change that, if a bank gets into trouble you suddenly transfer this debt to equity. This way we could take care of the capital problem.”
I actually don’t really agree, I think it is good that the people that lend the money to the banks are secured: the banks just need to be forced to use the money they get to get more solvent instead of gambling around with it!
Another interesting video I came across is a video featuring two members of the House Financial Services Committee, Congressman Brad Sherman and Congressman Scott Garrett.
Brad says: “TARP on steroids, unlimited, permanent bailout authority vested in the executive branch of government.”(…) “If you listen to the secretary, and you don’t read his 253 page proposal, you may come away with the wrong information.”
This makes me think of the scheme that was used to start the FED in 1913.
This is one of the problems nowadays: The treasury department bombs people with pages of information that are not really worth reading, “If I would be able to cross out three pages I’d be happy”.
The focus lies in a few pages, and that is where the clue is : “The fact is that section 1109 allows the executive branch to loan unlimited amounts of money to any solvent financial institution, while 1604 allows them to make unlimited investments in any insolvent financial institution."
That’s exactly what the Dylan is talking about in the first video in this post! We are giving the Treasury Department the power to take money from US taxpayers in unlimited amounts and hand it over to financial institutions, solvent or insolvent.
I am seriously concerned about Geithner’s plans, how is this going to save the economy?
The first video features Dylan Ratigan of MSNBC talking about the testimony before congress regarding new regulations aimed at alleged “too big to fail” banks.
Visit msnbc.com for Breaking News, World News, and News about the Economy
He hits the point:
He is NOT happy with Geithner’s plan, it would “Let the banks steal all the money”. The banks are allowed to take infinite risk with taxpayer money, where the banks take the upside and we take the downside.
“WHY is it legal for the US banking system to take infinite risk to use money for the largest gambling machine in the world?”
His guest does come up with a way we could possibly partially solve the problem we’re facing : “The bankruptcy law nowadays is that you had to protect the people that lend the money to the banks for 100 cents on the dollar.(…) But you can change that, if a bank gets into trouble you suddenly transfer this debt to equity. This way we could take care of the capital problem.”
I actually don’t really agree, I think it is good that the people that lend the money to the banks are secured: the banks just need to be forced to use the money they get to get more solvent instead of gambling around with it!
Another interesting video I came across is a video featuring two members of the House Financial Services Committee, Congressman Brad Sherman and Congressman Scott Garrett.
Brad says: “TARP on steroids, unlimited, permanent bailout authority vested in the executive branch of government.”(…) “If you listen to the secretary, and you don’t read his 253 page proposal, you may come away with the wrong information.”
This makes me think of the scheme that was used to start the FED in 1913.
This is one of the problems nowadays: The treasury department bombs people with pages of information that are not really worth reading, “If I would be able to cross out three pages I’d be happy”.
The focus lies in a few pages, and that is where the clue is : “The fact is that section 1109 allows the executive branch to loan unlimited amounts of money to any solvent financial institution, while 1604 allows them to make unlimited investments in any insolvent financial institution."
That’s exactly what the Dylan is talking about in the first video in this post! We are giving the Treasury Department the power to take money from US taxpayers in unlimited amounts and hand it over to financial institutions, solvent or insolvent.
I am seriously concerned about Geithner’s plans, how is this going to save the economy?
115...
CIT went bankrupt last Friday, it’s the fifth biggest company to ever go bankrupt.
The only bigger ones were Lehman Brothers (2008), Washington Mutual (2008), General Motors (2008) and WorldCom (2002). The company leaves the market with 64,9 billion of debt.
These debts are on the accounts of other big American banks en are also ‘repacked’ in CDO’s. Normally this would lead to declines in the value’s of the CDO’s but ever since the banks don’t have to value those at market price anymore but at the price they think the CDO’s are worth they can keep the value the same by ‘accounting creatively’.
Not only banks will lose money on those debts, also the American taxpayer has to pay for the bankruptcy. The US government invested 2,3 billion USD in the company, this money is lost now.
The worst is that CIT lend a lot of money to smaller businesses and actually had a 70% market-share in this segment. For it to be taken over by some other bank it might take some time, CIT might cause a domino-effect since the smaller businesses might be having serious trouble liquidity problems.
The total amount of banks falling in US is on 115 for this year.
Apparently Sheila Bair, head of the FDIC, thinks everything is still OK:
I hear: ‘Please, be confident in the banking system, please, PLEASE?!’ As you all know I am not confident in this financial system anymore... Banks have to face their own accounting tricks since the 'real value' of assets is highly overestimated, however: If the banks would value their assets at a market price, not 115 banks would have collapsed but possible even double...
The only bigger ones were Lehman Brothers (2008), Washington Mutual (2008), General Motors (2008) and WorldCom (2002). The company leaves the market with 64,9 billion of debt.
These debts are on the accounts of other big American banks en are also ‘repacked’ in CDO’s. Normally this would lead to declines in the value’s of the CDO’s but ever since the banks don’t have to value those at market price anymore but at the price they think the CDO’s are worth they can keep the value the same by ‘accounting creatively’.
Not only banks will lose money on those debts, also the American taxpayer has to pay for the bankruptcy. The US government invested 2,3 billion USD in the company, this money is lost now.
The worst is that CIT lend a lot of money to smaller businesses and actually had a 70% market-share in this segment. For it to be taken over by some other bank it might take some time, CIT might cause a domino-effect since the smaller businesses might be having serious trouble liquidity problems.
The total amount of banks falling in US is on 115 for this year.
Apparently Sheila Bair, head of the FDIC, thinks everything is still OK:
I hear: ‘Please, be confident in the banking system, please, PLEASE?!’ As you all know I am not confident in this financial system anymore... Banks have to face their own accounting tricks since the 'real value' of assets is highly overestimated, however: If the banks would value their assets at a market price, not 115 banks would have collapsed but possible even double...
Sunday, 1 November 2009
Amero??!
Came across this very interesting video about the strength of the dollar, this video also talks about one of the most known conspiracy theories about the dollar.
It’s about the ‘Amero’ which would take over the place of the dollar after the collapse of the dollar.
There are a lot of interesting video’s about the Amero on the internet, but I am pretty skeptical and think this might just be another conspiracy theory.
Read this for more info about the amero.
It’s about the ‘Amero’ which would take over the place of the dollar after the collapse of the dollar.
There are a lot of interesting video’s about the Amero on the internet, but I am pretty skeptical and think this might just be another conspiracy theory.
Read this for more info about the amero.
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