Front Row tickets

George Carlin said this in 2004.

"When you are born in this world, you are given a ticket to the Freak Show, and when you are born in America, you have a front row seat"

If you're an average educated & informed voter (or an aspiring immigrant like me) who's angered by these Tea Party shenanigans in this Debt Ceiling drama, don't get outraged. Consider this as a front row ticket to freak show in the name of American Political Bankruptcy.

Poor and middle class people who voted for these tea party hacks, where would you go crying once Ayn Rand's fan boy Ryan starts cutting your Social security, medicare and medicaid benefits? Enjoy the fruits of your labor. Oh btw, keep watching the fox news.

Middle class who voted otherwise, you aren't alone. You've the company of rich people. I know! The average 2 and 20 hedge fund guy, investment bankers, Wall St CEOs are all tired and vexed with these retards in the House.

For a change, I don't have any endless tirade about this. But I've two opinion pieces. One from the Free Markets savior WSJ and another from a successful financial advisor. Both are capitalists, not your average tax and spend liberals whom the wall st dreads most.

Here's WSJ opinion piece
The GOP's Reality Test
These below line sums up the Wall Street's frustration.
....The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor.

This is the kind of crack political thinking that turned Sharron Angle and Christine O'Donnell into GOP Senate nominees

And here's a financial Advisor Joshua M. Brown's outrage in his blog The Reformed Broker
Traitors.
And the only thing worse than an economic dilettante voting idiotically in Congress is when someone who's actually worked on The Street acts like they don't know any better. For shame to the hedge fund managers and finance guys who are providing intellectual cover for the bastards who dare push this nation closer to the cliff's edge!

To Stanley Druckenmiller and the rest of the Oldtimers' Game brain trust, let me say this: Your ideas about missing a Treasury coupon "just to see what would happen" are so dangerous that I fear someone's been tampering with your meds. How is it possible that otherwise intelligent people could reasonably believe that the world's reserve debt instrument should be used for a political gambit? Mr. Druckenmiller (and friends), we agree on the need to get our house cleaned up, just not on your plan of swinging a wrecking ball at it to get the maids' attention. Congrats on your retirement, please don't feel the need to ever offer public comment again.

Sit back, relax and enjoy the freak show (or apocalypse).

Sources:
WSJ
The Reformed Broker

Can we hold financial analysts responsible for their calls?

If you're a regular viewer of 60 Minutes, last December you might've seen Meredith Whitney predicting 50 to 100 significant municipal bond defaults in 2011. She made the headlines with just that call.

Please endure Chris Christie for 30 secs or you can scroll


For the starters, she's one of the very few analysts who predicted the '07 financial meltdown in one form or other. Back then her prediction was, Citigroup would lower its dividend and that it was time to sell bank stocks. It could be cause of her financial acumen or sheer luck. That's her ticket to fame, till date that's the only good substantial call she ever made. She resigned from Oppenheimer on February 19, 2009 and started her own adivsory group.

But this muni default call didn't go unnoticed and critics pounced on it, from day one.
“You could see 50 sizeable defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars’ worth of defaults.”
But as we're approaching mid of they year, she's getting very defensive on the call. Last Wednesday she's on CNBC squawk box.

Needless to say she's very tense and strangely she got pointed Questions from Becky and our new Free markets champion Joe Kernen. Here's few of her statements and my observations.

Muni defaults isn't part of large issue.
But her whole 60 minutes appearance was about her defaults call.

Tried to change definition of default as reduced services.
Her call specifically mentioned hundreds of billions Dollars of deficits.

Talks about state difficulties while the topic is muni-bonds.
State bonds are different from muni-bonds

She never mentioned 12 months
In 60 minutes video, she said 12 months

And here's response from Cumberland Advisors, her main detractors on this issue. Unlike Meredith, this firm isn't one trick pony and have gravitas.

I was thinking that she or her clients might be shorting municipal bonds. But she said on air that she doesn't have a position in bonds neither does her clients. Makes me think why would she make that kind of controversial call.

This looks like an exact opposite to Credit Ratings agencies role in sub-prime crisis, but equally harmful. Investors are already shorting the muni-bonds, and she added to it. I can't predict the result though. Looking at rise of income tax returns at state level, I assume/hope that states are in better shape then we all' re afraid of.

Financial industry and press aren't hiding their displeasure and I hope she wouldn't get a free pass. Not quite sure whether regulation covers this area or not.

Peace

P.S. Nice shout out from Meredith to Short Hills, my favorite mall in NJ.

06/14/11
This just in, WSJ itself is publishing contrary evidence to Meredith's predictions.

Manufacturing Jobs, a novice idea.

Today our unemployment rate is 9.5. But as per National Bureau of Economic Research, recession ended in June'09 itself. Nation isn't feeling that yet, at least I'm not feeling that confident.

During depression era, FDR tried to lift country out of depression with New deal, TVA, PWA et al. Those employed many young men and it took the country out of depression. World War 2 also helped. There're so many orders for planes, tankers etc. There're new factories and construction jobs every where and created a new middle class.

In this recession also, Obama tried the same trick with Recovery act (the infamous stimulus). It didn't help much, there're opposition from conservatives for any new spending. I saw only few signs on free ways, indicating that recovery act funded that construction.

It's a proven thing that manufacturing jobs are the jobs which will lift any country from recession. One thing which I find amusing and saddening is that everything around is made in China. Is there a way, we can bring back at least few of those jobs. Electronic devices manufacturing comes to mind as I spend most of my time with them or thinking about them

Let's look at Foxconn, which many of you might not heard of. It's a huge Contract Manunfacturer in Asia with global workforce of 920K+ (mostly in China, Taiwan) and revenue of 60B USD for the financial year of 2010.

If government can construct and operate a contract manufacturing complex like that here in USA, we can create thousands of new jobs. All the consumer devices giants can pitch in and make it a Universal Manufacturing complex. HP, Apple, Dell, Motorola, Seagate, Cisco, Juniper, BestBuy should all join. No need to worry about confidentiality of designs et al. Foxconn serves so many western giants with very good track record of secrecy.

Of course all the devices prices will jump in. Govt can jump in and create a no tax zone, give exemption from regulation. (Health Insurance exemption, if you will!) The USP of Foxconn is it's cheap manufacturing costs. That's because, it's just a sweat shop where there's practically no regulation about employee conditions. If manufactured in USA, a basic iPad can cost 700 to 900 USD, which costs 500 now. But if private enterprise and govt can bite the bullet for some time and sell that product for less price for some time, this venture can be made profitable. With rhetoric so high in country now, it shouldn't be that tough to convince consumers to buy a slightly expensive product with a sticker 'Proudly made in USA'. Phobia that China is going to cross USA as super power will also help.

Now if we've to bring back outsourced software jobs from India and other countries, we need more college educated people which wouldn't happen overnight. These assembly line manufacturing jobs wouldn't require rocket scientists or college grads. We still need people with knowledge in engineering, logistics, operations and govt policy and people who can act as liaison between government and private sector.

Make no mistake, Foxconn didn't become this huge overnight. It was started in 1974. But private enterprise have money and potential to sponsor this kind of complex. Look at Manhattan Project, US developed Atom Bomb in 6 years. All we need is will and help from government. This will also reduce our trade deficit, which is at alarming high.

I'm also afraid that these min. wage salaries will become baseline for the next generations. But it's good to have people employed rather than spending tax payer's money for unemployment wages. Govt. can also include a clause on how wages should rise along with profitability. If this project get's profitable govt can slowly roll of the Tax benefits. Treasury proved that ,even TARP bailouts are profitable.

If this hypothetical scenario is ever implemented, USA will face strong opposition from China on global arena. But USA should act tough and twist few arms. Diplomacy shouldn't cost a nation's economy. If 10% of workforce remains unemployed, it's a lie to say it's out of recession.

Peace.

(I understand that this post might've sounded very presumptive, but couldn't resist posting it)

Update: 12/21/10
This is from the latest issue of BusinessWeek
http://bit.ly/dNiun0
In 2010 US 937K (non-farm) jobs .
Foxconn itself added 300K+ jobs.

Right here we can see, how many jobs foxconn is creating which can be created here in US with some effort.

Art Laffer strikes back

Folks, the snake oil salesman is back. Art Laffer wrote this brilliant op-ed (not!) in WSJ on 06/06 how the economy is gonna collapse if Bush Tax cuts expire this year. Yes, it's bunch of misrepresented facts and twisted logic. Bloggers and other columnists blasted him aptly. I'm not surprised that WSJ published this op-ed. Lately that paper looks like propaganda page for right wingers and tea party. Links at the end of blog.

I've one question about this 'Tax cuts for the wealthy' theory. Conservatives argue that less tax on the corporate profits and rich stimulates economy and create more jobs. Actually it's a good theory. But only on paper. Post great depression and Milton Friedman era, this might've made sense as the jobs are created in Manufacturing sector. Corporate profits might've created more jobs.

Now, how many Manufacturing jobs exist in USA? Everything was moved to china and third world countries by 80s. Automotive jobs moved to Canada and Mexico. 80s and 90s experienced boom of tech jobs and call center jobs. But by the start of new millennium all the possible tech jobs're moved to India and other countries.

Where exactly are these new jobs are created, and it's pretty much a fact that Bush tax cuts only helped rich people. Bush inherited a 236Bil surplus budget from Clinton, implemented tax cuts and he blessed the country with 400Bil deficit. He also threw in a depression as a good measure. And two wars, oh I digressed!

Most of the income tax paid in USA is paid on Capital gains. It's not on income. So an average guy on street making 100G per annum will pay somewhere between 25 to 35% tax based on his location, martial status, kids and other factors. But if a millionaire makes that 100G in capital market, he'll only pay 15%(long term). You see the disparity. Now Obama wants to increase it to 20%, conservatives are crying foul.

Corporate profits, it's a different game altogether. Creative accounting will be in full throttle here and there're off shore tax havens. Exxon Mobil didn't pay a single penny as income tax as they paid taxes in different countries. See this Frontline Story to learn more about tax havens.

Before I finish my rant, I want to say few things about Laffer's greatest contribution to the world, 'Laffer curve'

Quoting wikipedia, 'the Laffer curve is a theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation'. So it shows that, if tax rate is 0, tax revenue will be zero and if tax rate is 100% the tax revenue will be zero. What it wouldn't tell you is what's that sweet spot what's the win-win tax rate for tax payer and government.

But I couldn't comprehend, what's that Laffer discovered which I didn't know already. Any tax payer with an Economics 101 class can guess that. Sometimes a liberal arts degree and right connections makes a mediocre person a great economist.

Peace

Media Matters fact check on Laffer's commentary

Barry Ritholtz, dissection of Laffer's op-ed

Asha Banglore's commentary

My previous blog about Art Laffer

Image from wikipedia commons

Warning went unheeded

The more we look back into our lack of oversight and regulation, it becomes more clear how many warnings we missed and how much our leaders, economists pushed us into this turmoil. After all, hindsight is 20 20.

I watched this Frontline Documentary, and it clearly showed us a whistleblower who wanted to regulate derivatives trading. Like many whistleblowers, she was crushed. She got pummeled in senate hearings. Since she couldn't pass the reform she resigned from her office. Exactly after 10 years, wall street crashed burning away the savings and retirement money of millions of Americans.



for those who couldn't watch the whole 55 mins, here's the overview.

Brooksley Born was the chairwoman of CFTC in Clinton administration. In 1998 she looked at the lack of regulation on OTC derivative trading and tried to put a leash on it. She was pushed back by the trio of Alan Greenspan, Robin Rubin and Larry Summers. After senate and congress committee hearings Free market proponents prevailed. Brooksley left her job.

Soon, a big Hedgefund LTCM went under and Fed orchestrated a bailout with the help of big banks. This is the exact scenario which Broosley warned the congress about. Policy makers missed this big warning. And we all know the rest of the story.

But if we had acted on this warning we could've avoided (wishful thinking) this implosion. But trio didn't want our free markets hindered by regulation just for the sake of regulation.

Actually, except the tail end of last decade, Laissez-faire worked flawlessly. Atleast seemingly. Greenspan's low interest rates, Housing bubble kept everybody happy. Larry kudlow said that there's no such thing called hosuing bubble. (He's an Epic failure, I wonder why he's still employed) And then the Bear Sterns bankruptcy, Lehman's brothers bankruptcy. Financial system fell into fear and Panic. I wonder, what's the Free Market's proponent's response for this.

Being a fan boy of Frontline, I can go on and on about their Journalistic virtues and how they're the torch bearers' of the Fair journalism. But I've to appreciate their story telling style one more time. I liked the way they end their story.

Robin Ruben went to lead Citibank and it got 100Billion Tax payer money as a bailout. Alan Greenspan is every where from Senate hearings and Think tank meetings defending his tenure as Fed chairman. Some how people are not buying it.

What bothers me is the same people who caused this meltdown are in Obama administration. Larry summers is chief advisor for Obama and Tim Geithner is the Treasury secretary. These two are the proteges of Robin Ruben and now these are the people who're gonna protect us from another meltdown. Hmm, I guess this isn't the Change we're expecting.

Alan Greenspan got too much credit for the last two decades. He's called as wizard, maestro, rockstar for the booming 90s and 2000s. Bush even presented him with Presidential Medal of honor. But now truth is slowly emerging and his legacy is at risk now. He agreed that he's partly to blame for this meltdown but also blamed greed of bankers for this. But hey, Regulation is used to control greed and prevent people from doing stupid things.

I have some beef with Ayn Rand philosophy which I'm dying to write for the last few months. I didn't read any of her books yet but I got the gist of her work. She's a libertarian and wouldn't want a bit of regulation on Market. For all those ardent worshipers of Ayn Rand, this is my question. Last two decades of US Market is what Ayn Rand asked for, and we ended up in this Abyss. How exactly are they gonna defend her objectivism.

Ayn Rand's work gained popularity and creed cause of the times she lived. Fear of communism made Libertarianism glamorous. But all good things will come to an end, same with the Ayn Rand's Libertarianism influence. No follower of'er is more powerful/influential than Alan Greenspan. And he couldn't prove that her principles actually work.

Anything is moderation is good, either free market or Regulation.

Now, how can we prevent another turmoil? Even today Wall st is minting billions with derivatives trading. And here's the kicker. This time they're using TARP funds for that. That's tax payers money. Some thing is seriously wrong.

Chris Dodd, since you decided not to run for another term of senate, please pay back to American public at least once. Try to pass a real financial regulation reform. Not a toothless one which is before Congress now.

And yes, please bring back Glass-Steagall act.

Peace.

P.S. As economists and historians are questioning Greenspan's Legacy now, could they also question Milton Friedman's theories. It wouldn't hurt.

Tea Parties : Grassroots or Astroturf?

With broken laptop(that's a second dell) and layoffs at work, I'm not getting much impulse/opportunities to blog. But these tea parties are forcing me to rant.

I didn't clearly understand what're these people angry about. Govt spending, Taxes, bailouts...? If the bailouts are what you're complaining, it's Bush who approved no questions asked $700 bill to Henry Paulson. And if you're complaining about Obama's bailouts, please let him know what's the better way to do it.

If your beef is Government spending, how else you'd pump money into crippling economy where credit is virtually frozen. And America suddenly got a strange disease by name Thriftiness. Now pls don't give me that less govt spending, less taxes and less govt are good for country. We're enjoying the fruits of Bush taxes now. In Bush's 8 years Rich became filthy rich and middle class slipped into poverty.

Conservatives are still singing the old song of tax cuts for corporations. How the F in this world would that benefit us. Don't we have tax cuts for all Big corporations, including oil corporations. And how exactly did that benefit us. Yeah I hear your thing, Trickle Down Economics!! That less taxes means corporations hire more people. Oh really? All these corporations took record profits, laid off people at slightest whims of market and outsourced major chunks of their businesses. Forget about employing more people. It's about retaining jobs now, and for the less fortunate it's about unemployment benefits.

Your conservative hero Reagan raised taxes, not once but twice. And no one talks about it. And please stop quoting his tired Government is not a solution to our problem, government is the problem line. With the deregulation spree, we're in this shithole now. And guess what, his so called legacy is being Questioned now

And Question to these so called angry protesters. How many of you make more than $250K per annum. If you're below that, you wouldn't see a single penny increase in tax. For those who make more than $250K, isn't that time that you pay taxes like rest of us.

It appears to me that these conservatives are just angry cause they're out of power. Didn't you enjoy power and ruin it for 8 years. And first 4 years, you didn't even win that.

Now the new poster boy of these retards, Gov. of Texas Rick Perry. He's threatening to cede from the union. Please do, and don't let the 21st century hit you on the way out. (Quoting Bill Maher's line)

Meh, we'll be fine without those good ol' Texas 'tards. And they'll be fine with oil. Oh wait, didn't the mighty US invade Iraq for oil......

And for the faux news contributors and few retards claiming this as grassroots campaign, this ain't grassroots. This is a astroturf campaign

Peace

Paul Krugman on Economy

Nobel Laurette Paul Krugman on Economy @ World Affairs Council : Oregon on 01/29/09
Bit longer, but worth watching. The Q&As in particular are very interesting.
(Paul Krugman's intro starts at 09.45 minute, and Paul speech around 12.15 minute)

enjoy..

Rick Santelli, new Swift boat Veteran

This tool Rick Santelli, is exposed by playboy.
Here's the article from Big Picture blog.

Actual playboy article (SFW)

I used to watch this guy on '06. I always thought there's something phony about this guy.

Here's video of Matt lauer grilling this tool, about White house threatening his family.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Wall St / Greed

Now the whole country is piling on this Bonus thing.

But few people are arguing how much is 18 billion when compared to 1800 billion losses. It might not count, but what counts is it's Tax payer's money. Government isn't rescuing home owners who're behind their home payments. If wall street is giving out Bonuses and going on leisure trips with tax payer's money, they better be prepared to face the shit.

I saw this douchebag John Thain on cnbc defending bonuses given to his staff in the month of Dec. His argument is that if we don't pay well to the smart people, they'll go to another company.

And this is the same douchebag who spent $1.2 million on his office renovation and $1400 for a trash can.

Two questions for this SoB.
1)Who're these smart people, are these the people who ruined Meryl Lynch and all other investment firms
2)Where do they go? Who's hiring?

Jonathan Alter is the first one in the media to ask a simple Question, who's hiring. Here's his Newsweek article.

Wall St probably hired a PR firm. News papers are publishing articles how bonuses are part of their compensation packages, and about their long working hours. Karma, isn't that a beautiful thing.

NY Times published this article today. But I'm not sold by their sorrow stories yet. Read the public outrage here

Here's a reader's comment which represents the nation's anger very well.

Let's see... Taxpayers, some of whom work 2 jobs for a tiny fraction of what these Wall Street "geniuses" make, bailout the banks for the tune of $700 billion.

These money worshipping "people" then give themselves $20 billion in bonuses for bankrupting the nation because they want to keep "good talent"?

Sen. Clair McCaskill is right, let's cap their pay and take back our stolen money. The last thing a single mother of 3 working at IHOP should have to do is supplement a scumbag investment banker's Rolex or Porsche.

— Andrew, NY, NY

BIG Numbers

Here're two news items, both involving very BIG numbers

Zimbabwe rolls out Z$100tr note

How to Understand a Trillion-Dollar Deficit

Both articles are about numbers which go beyond our intuition.

100000000000000 Zimbabwe Dollars bill and it only fetches 30 USD. 231m% hyperflation.

And then, our Deficit. USD 1200000000000!!

Talking about inflation, Fed gave out 350 Billion USD to banks and is about to give 350 more to banks. Obama is talking about 1 Trillion Dollars stimulus plan. I'm not sure, how we can avoid inflation in USA in the next few years.

Peace

Wall St, FUBAR ! 2

Now that the dust is settling (hopefully) and capitol hill is busy in finalizing the mother of all bailouts, I'll try to explore the causes for the crisis.

As I see it, these're the causes.

Insanely low interest rates from 2004 to 2006
Sub prime Lending
Predatory Lending
Derivatives
Lack of Regulation

and the Housing bubble burst.

Low Interest Rates
Post 9/11 Fed decreased the rate consistently. And from Jun '03 to Jun'04 the rate is 1%. Alan Greenspan advocated that rate cut would help the Housing. But too much cash flow to bankers made'em look out for more people to lend their easy money.

Sub prime Lending
Sub prime is jargon for people with bad or avg credit history. Usually this group wouldn't be eligible for housing loans. But as there is too much money to lend, realtors and mortgage bankers lend the money to this group.

A couple making 75G per year bought a 450G home without a down payment in SoCal. No income verification! How is this possible? Here comes the different types of Mortgage Products. ARM (Adjustable Rate Mortgage) is one of them. With this kinda mortgage, lenders can pick their payments for the first 3 years. Obviously people paid interest only for the first 3 years. And then the Bankers used all the Predatory Lending practices.

Predatory Lending
So Bankers convinced this public that they can refi or sell their house after 3 years if they can't afford the payment. But apparently they're not informed that they can't refi the home before 3 years. So after 3 years the teaser rates ended and the real payments kicked in. As many people didn't pay any Principal in the first 3 years, you can imagine how much the monthly payments would go up. Now this public couldn't get their homes refinanced coz of the credit crunch, new lending standards and the phenomenal loss of house values. Even though the borrowers are really foolish, Mortgage lenders had intentionally hidden these details in their paper work.

Derivatives
As there is risk in all the sub prime loans, these loans we're sliced and repackaged as Derivatives ans sold all over the world. this reduces the risk to lending firm. The problem here is that no one really knows, which toxic loan effects a derivative. When Fed was trying to convince Goldman Sachs and Morgan Stanley AIG, they couldn't figure out how many toxic derivatives are in AIG books and how they would be affected.
And they backed out. Warren Buffer once called'em Weapons of Mass Destruction. Here's a pic which shows how loans are packaged into Derivatives. (Courtesy wikipedia)

These Derivatives are the main reason for Bankruptcy of walls st firms. As the housing foreclosures are increasing, these derivatives are losing their value. Panic on the wall st brought down the share value. It's just another illustration of Domino effect.

Lack of Regulation
Every year Wall st contributes millions of dollars to the both parties. In return they get no regulation or regulation of no use. This is the Free Market capitalism at it's best. When the street is making profit, they lobbied for lower taxes on Capital gains and got the 15% tax rate and tax cuts. Now they got the bail outs. AIG is just an insurance company. But it got involved into Derivatives trading and insurance. Reason, no regulation.

Dick Fuld, CEO of Lehman Bros got 180 Mil in compensation last year. CEOs of Freddie Mac and Fannie Mae got the golden parachutes on their compensation package already. Thank God, Fed fired'em already and the chances that they'll get any severance package are very low. I saw Henry Paulson's and Bloomberg's take on CEO pay on Meet the Press this morning. watch it here

Like all good things, Housing Bubble came to an end in 2007. Home Prices're in Free fall mode. Bankruptcy of sub prime mortgage companies signaled the incoming financial storm. Apparently we saw that very late.

Some one on wikipedia, put all this mess into a good pic.


Peace.

Wall St, FUBAR !

What a week!

Where to start! Sunday night Lehman brothers filed chapter 11. Feds didn't bail out this time (?!). AIG bailed out by Feds. Meryl Lynch is part of BofA now. And then Dow Jones lost so many points and again rallied at the same pace. Everything which Americans thought risk-free is at risk now.

Banks, Money Market funds. (could you imagine that few money market share values went below $1.) I can't believe my bank Wachovia anymore.

Bail outs Season
Bail outs. USA is now the most socialist economy in the world.
Let's see the numbers
Bear Sterns $29B
Freddie Mac and Fannie Mae $200B
AIG $89B

and as I write this Bush and his team are pitching $700B bailout plan to the congress.
The total tab $1.018 Trillion. Yes, that's 12 zeroes fellas.

and 700B is a very rosy estimate. God knows how much more money Fed is gonna put in. And Detroit auto companies are in line for their Bail out.

My first Question. Where's all this money coming from? Our economy is in deficit of $407 Billion. And the National Debt $10.6 trillion. See this video Money as Debt. As we see, USA economy isn't fundamentally strong.

Henry Paulson, the treasury secretary is leading the effort and he is pulling all the stops to face this crisis. He's doing a good job. In a way I can't oppose these bail outs, coz otherwise the whole economy might tumble down.

But again rich corporations were not held accountable for this mess. Imagine you or me, abusing our credit cards on big screen TVs, shopping, bad mortgages and file for bankruptcy. Would the Feds come for your resuce? F NO!!. But corporations did that and yes Fed rescued'em.

Interesting point here. SEC banned shorting of Financial stocks for 3 weeks. For the beginners, shorting is a kinda trading in which you profit if the stock price goes down. But wall st made billions in the last decade in shorting with their hedge funds. Isn't it ironical that the same companies destroyed so many companies with their shorting techniques.

It's not 'Surge' which is working in Iraq. It's the money US govt is giving to Shiite militants to stop attacks. And Dems VP candidate Joe Biden is putting a bill in Congress asking for 1 Billion aid to Georgia. Are they outta their F'in mind. How in this world are we gonna send aid when our economy itself is in direness.

US Govt doesn't have money to upgrade infrastructure, schools, health care in USA. Could you believe that FAA is still using 50 year old Radar based navigation for civilian flights in USA. FAA can't afford 150 Billions budget to upgrade it to GPS system. And we had already spent $580 Billions in Iraq war.

Now imagine John McCain being elected in November. McCain has been big backer of Deregulation bills until last tuesday. Suddenly, he's asking for more regulation of Wall st now. So if McCain goes to White house, he's gonna ask Social Security privatization. And medicaid, your retirement everything is at risk. As I see it, we're not even at the end of crisis. This is just the beginning !

And I've to use a line from Bill Maher
"Please don't call this crisis as Market correction, it's a catastrofuck."

to be contd...

SOS

Got an e-mail from northwest airlines, asking me to visit this website stop oil speculation now. So now airlines also joined the bandwagon. Even they need some one to blame for their poor customer service, airline delays (lemme say it again, new york area airports sucks...aah I feel better)

But seriously this website is a coalition of all the airlines, freight operators etc. and they raise some important points "....As speculators continue to dominate the market, the volume of oil traded “on paper” has been as high as 22 times greater than the volume of oil consumed...". This isn't a good sign

And they've suggestions also. The point I want to make here is I'm not a airlines fans, but I've to take their side in this issue. An there're some rules in this commodity trading lobbied by Enron. Duh.

People who follow this blog(if there're any out there..) might be pretty bored with oil speculation topic. Few guys in Connecticut, New York and London are taking us for a ride. that particular thought is killing me.

Anyways if you're convinced, please write to your local senators.
Thanks
Peace.

Hold on people : another mortgage crisis

Folks, it ain't over till it's over.
Read this interesting piece from slate.com

So what if all these upper middle class and upper class people just walk away from their homes.. even though they can afford the payment.

I've mixed feelings for people who lost their homes cause of the sub-prime crisis. Many of them bought homes which they can't afford with ARM loans and few other lost coz of predatory lending. If just the sub-prime crisis caused this much damage imagine what's the pain with the next wave of crisis.

And I can't really blame all these SoCal residents (Few Southern California pricks loved this word, trust me) walk away from their overpriced 5 BR homes. Coz the money they're paying to lender is more than the worth of the home. Moral aspect aside, I might be tempted to do this.

Recently heard on a businessweek podcast that few lenders in cleaveland and the Rustbelt are actually abondaning foreclosed homes. It's a write off for them. But this causes a domino effect. Obviously this will become a hangout for drug peddlers, petty thieves and solicitations. Property values goes down in that community and again people become skeptic about Negative amortization.

Not sure when're we gonna come out of this recession. The problem here is, no one is willing to catch a falling knife.

Peace.