Ronald Reagan: "Well I've said it before and I'll say it again — America's best days are yet to come. Our proudest moments are yet to be. Our most glorious achievements are just ahead."
Timothy Geithner: "US can no longer drive global growth. The world cannot depend as much on the US as it did in the past."
UPDATE: Joe Biden: "[T]here's no possibility to restore 8 million jobs lost..."
Showing posts with label Timothy Geithner. Show all posts
Showing posts with label Timothy Geithner. Show all posts
Friday, June 25, 2010
Friday, June 5, 2009
More Bad News in Obama's Economy - Misery
The unemployment rate today jumped to 9.4%, up half a percentage point from just last month. This means nearly three quarter million jobs were lost just last month under the Obama/Geithner/Bernake recession. Timmah!!
As a result of this news (which the White House and the MSM is spinning as "good"), interest rates have jumped up 1/4 point ahead of the market open, and oil prices increased by $7 per barrel.
This is what happens when governments overspend in a recession -- the recession continues unabated, and the government's printing money adds inflation to the mix.
Jimmy Carter is back at the helm of the nation's economy. Jimmy Carter's favorite index, the Misery Index, is back in play, although the MSM is religiously avoiding the topic.
The Misery Index is the sum of the unemployment rate plus the interest rate. The Misery Index now stands at 13.4 - higher now than at any point since 1982.
Along with the economic misery associated with the Misery Index, comes crime. There is a definite correlation between increases in the Misery Index and crime rates. Anecdotally, I have seen an increase in bank robberies and theft in my region of the country. I am certain this is a national trend, and will continue.
If the Obama "economic" team continues to follow Carter's imprudent path, the next step will be a soak-the-rich tax plan that will destroy wealth in the United States. Of course, Jimmy Carter never tried to add a Mandate, Cap, and Tax scheme on top of the economy, or a "Health Reform" plan that needs to increase taxes to fund cuts in spending (I'm still trying to get my head around that line of "reasoning".)
Objectively looking at the imprudent economic policies being implemented by the Obama/Geithner/Bernake economic team, my prediction is a full-blown depression. Citizens would do well to husband their economic resources and, to the extent I could invest, I intend to invest in commodities that closely track increases in inflation. Certainly lock down any loans into a fixed interest rate. When interest rates are back at double digits, single digit fixed rate loans will look brilliant.
Friday, May 15, 2009
Insurance Companies to Avoid
The Treasury Department has agreed to extend billions in TARP funds to at least six life insurance companies. Unlike the banks, these companies were not forced to take the TARP money, and therefore, are corrupted by management too stupid to be trusted with your money.
The six companies are: Hartford Financial Services Group, Lincoln National Corporation (the Lincoln Financial Group), Allstate (you are no longer in good hands), the Principal Financial Group, Prudential, and Ameriprise Financial.
These companies have clearly learned nothing from the trials and tribulations of the banks.
To paraphrase H. L. Menken - Requesting government aid is the belief that financial companies know what they want, and they deserve to get it -- good and hard.
UPDATE: Someone reads this blog -- Ameriprise said "No Thanks" to the TARP offer today. Word is Prudential will decline the "help" as well. We'll see what Timmah! and B.O. have to say about this.
The six companies are: Hartford Financial Services Group, Lincoln National Corporation (the Lincoln Financial Group), Allstate (you are no longer in good hands), the Principal Financial Group, Prudential, and Ameriprise Financial.
These companies have clearly learned nothing from the trials and tribulations of the banks.
To paraphrase H. L. Menken - Requesting government aid is the belief that financial companies know what they want, and they deserve to get it -- good and hard.
UPDATE: Someone reads this blog -- Ameriprise said "No Thanks" to the TARP offer today. Word is Prudential will decline the "help" as well. We'll see what Timmah! and B.O. have to say about this.
Saturday, May 2, 2009
Government Moving to Socialize Banks Now
The U. S. Federal government is now in it's final efforts to nationalize up to ten of the nation's largest banks, including Citigroup and Bank of America. This comes as a result of unprecedented “regulatory oversight” of the bank results arising from the Obama Administration’s highly theoretical stress testing.
This theoretical stress testing involved no testing at all, but in fact is a “what if” scenario applied against a heretofore unrecognized equity ratio never before used to take over an ongoing financial institution.
The stress test scenario is as follows: if the bank ceased operations today, what would the shareholders have left in a company if the company were liquidated. The new Federal standard for what the Feds are terming “tangible common equity” is a value of 4% of the institution’s assets, and such assets are arbitrarily assigned a lower value associated with the Fed’s expectation of risk of the asset.
Without saying so, the Feds want to take ownership interests in the banks by saying the preferred shares issued by the banks to the government as a result of TARP funds are held as liabilities, which weigh down the value of a bank’s assets. If the bank would merely convert these preferred shares into voting common shares, it will convert the TARP loans from a debt liability into shareholder equity, raising the asset value of the bank on the books, but not actually improving the bank’s operating position by even $1, since no actual new money is flowing into the bank either via loan or investment.
It is said that certain of the 20-odd banks suffering this unprecedented Federal scrutiny will not be permitted to increase the value of their assets in the normal ways, such as selling shares to private investors or issuing bonds or other debentures, but MUST convert the government preferred shares into common stock.
The Federal government, over this weekend, during the slow news cycle, is trying to socialize these banks by negotiation with weak willed bank officers. These idiots are finding out what happens to the unwary that lie down in the bed of vipers that is the Federal government.
The socialization of the capitalist system is well underway. The government is using as an excuse a what if, worse case scenario that is purely theoretical -- it is not responding to an actual bank failure.
Let’s see if the American public has been zombiefied enough to take it.
This theoretical stress testing involved no testing at all, but in fact is a “what if” scenario applied against a heretofore unrecognized equity ratio never before used to take over an ongoing financial institution.
The stress test scenario is as follows: if the bank ceased operations today, what would the shareholders have left in a company if the company were liquidated. The new Federal standard for what the Feds are terming “tangible common equity” is a value of 4% of the institution’s assets, and such assets are arbitrarily assigned a lower value associated with the Fed’s expectation of risk of the asset.
Without saying so, the Feds want to take ownership interests in the banks by saying the preferred shares issued by the banks to the government as a result of TARP funds are held as liabilities, which weigh down the value of a bank’s assets. If the bank would merely convert these preferred shares into voting common shares, it will convert the TARP loans from a debt liability into shareholder equity, raising the asset value of the bank on the books, but not actually improving the bank’s operating position by even $1, since no actual new money is flowing into the bank either via loan or investment.
It is said that certain of the 20-odd banks suffering this unprecedented Federal scrutiny will not be permitted to increase the value of their assets in the normal ways, such as selling shares to private investors or issuing bonds or other debentures, but MUST convert the government preferred shares into common stock.
The Federal government, over this weekend, during the slow news cycle, is trying to socialize these banks by negotiation with weak willed bank officers. These idiots are finding out what happens to the unwary that lie down in the bed of vipers that is the Federal government.
The socialization of the capitalist system is well underway. The government is using as an excuse a what if, worse case scenario that is purely theoretical -- it is not responding to an actual bank failure.
Let’s see if the American public has been zombiefied enough to take it.
Tuesday, April 28, 2009
Capitalism's Destruction Imminent
Redwarning was established to warn the American public of the coming wave of Socialist/Statist policies which were sure to come from the presidential election of 2008. I am not surprised with the speed and scope that Barak Hussein Obama has moved to place a stunning amount of the United States economy effectively under government control. I am surprised at how deluded the American public remains about Obama’s actual plans.
Barak Hussein Obama is a sociopathic narcissist who believes he was put in the White House to transform the nation. Transformation is not a modification; Obama is not content to be a good keeper of the nation. To transform the nation into his image, he must start with destroying the existing national order. The existing national order was republican form of government and a capitalist economy. Obama is methodically setting out to destroy the capitalist economy first. Can the over attacks on the republican form of government be far behind?
This past week, the Barak Hussein Obama has made it most dramatic grab for the control and destruction of capitalism. Barak Hussein Obama wishes to convert the preferred stock the Bush administration forced banks to issue in exchange for TARP funding for voting, controlling common shares. To kill capitalism, Obama must control the capital. To do this, he must control the banks. To control the banks, he must control the voting shares of the banks. To obtain the voting shares, he must trump up a reason to do so.
There is a reason by which the federal government may take control of a bank, namely, during a bank failure when the bank is insured by the FDIC or a similar program, and the government cannot find another health bank to buy or assume the failing bank. This is only in the case of an actual bank failure. Of course, in such an event where no merger partner can be found, the federal government undertakes to pay off the depositors and wind up the bank. At the end of the process, the federal government does not control and run a commercial bank.
What Obama is suggesting is different. The large, meaningful banks that have received TARP money are not failing. Many seek to repay TARP now to redeem the preferred shares and get the government out of the boardroom and back to a regulatory scheme.
Obama and Treasury Secretary Timmah! Geithner are afraid to lose control over the banks. Obama and Geithner have now invented a series of heretofore unknown and unpublished “stress tests” to determine, based on their own unpublished standards, whether banks are “sustainable” without a continued infusion of TARP money. The stress tests are a fiction designed to make the banks fail.
When the large commercial banks “fail” these stress tests, Obama and Geithner will declare that they need more capital, and will force the banks to take more TARP money in exchange for turning over control and ownership of the bank to the US Government through the conversion of the preferred stock to common voting stock.
I predict Bank of America and Citigroup will both be told that they are undercapitalized as a result of these “stress tests.”
Not even notorious Enron advisor and left wing economist Paul Krugman can see a benefit to the taxpayers of changing the preferred stock to common stock. In his April 20th blog post, Krugman writes “[C]onverting preferred into common does nothing: it’s just a swap among the junior stuff, with no impact further up the line. It’s certainly not a fresh infusion of capital in any meaningful sense. So who is supposed to be fooled by this?”
At least Krugman has the intellectual honestly to admit that there is no benefit the taxpayers or the banks to the conversion of the preferred stock. What the leftist Krugman takes pains in his blog to NOT point out, is that common stock is voting stock that permits the government to own and control – Socialize -- the banks.
Obama is on a long march to Socialist centralized control of the US economy. The banks and auto manufacturers are first. The medical industry is next, and no one is safe from the march of the reds in Washington. The Tea Party patriots better man up for a fight.
Barak Hussein Obama is a sociopathic narcissist who believes he was put in the White House to transform the nation. Transformation is not a modification; Obama is not content to be a good keeper of the nation. To transform the nation into his image, he must start with destroying the existing national order. The existing national order was republican form of government and a capitalist economy. Obama is methodically setting out to destroy the capitalist economy first. Can the over attacks on the republican form of government be far behind?
This past week, the Barak Hussein Obama has made it most dramatic grab for the control and destruction of capitalism. Barak Hussein Obama wishes to convert the preferred stock the Bush administration forced banks to issue in exchange for TARP funding for voting, controlling common shares. To kill capitalism, Obama must control the capital. To do this, he must control the banks. To control the banks, he must control the voting shares of the banks. To obtain the voting shares, he must trump up a reason to do so.
There is a reason by which the federal government may take control of a bank, namely, during a bank failure when the bank is insured by the FDIC or a similar program, and the government cannot find another health bank to buy or assume the failing bank. This is only in the case of an actual bank failure. Of course, in such an event where no merger partner can be found, the federal government undertakes to pay off the depositors and wind up the bank. At the end of the process, the federal government does not control and run a commercial bank.
What Obama is suggesting is different. The large, meaningful banks that have received TARP money are not failing. Many seek to repay TARP now to redeem the preferred shares and get the government out of the boardroom and back to a regulatory scheme.
Obama and Treasury Secretary Timmah! Geithner are afraid to lose control over the banks. Obama and Geithner have now invented a series of heretofore unknown and unpublished “stress tests” to determine, based on their own unpublished standards, whether banks are “sustainable” without a continued infusion of TARP money. The stress tests are a fiction designed to make the banks fail.
When the large commercial banks “fail” these stress tests, Obama and Geithner will declare that they need more capital, and will force the banks to take more TARP money in exchange for turning over control and ownership of the bank to the US Government through the conversion of the preferred stock to common voting stock.
I predict Bank of America and Citigroup will both be told that they are undercapitalized as a result of these “stress tests.”
Not even notorious Enron advisor and left wing economist Paul Krugman can see a benefit to the taxpayers of changing the preferred stock to common stock. In his April 20th blog post, Krugman writes “[C]onverting preferred into common does nothing: it’s just a swap among the junior stuff, with no impact further up the line. It’s certainly not a fresh infusion of capital in any meaningful sense. So who is supposed to be fooled by this?”
At least Krugman has the intellectual honestly to admit that there is no benefit the taxpayers or the banks to the conversion of the preferred stock. What the leftist Krugman takes pains in his blog to NOT point out, is that common stock is voting stock that permits the government to own and control – Socialize -- the banks.
Obama is on a long march to Socialist centralized control of the US economy. The banks and auto manufacturers are first. The medical industry is next, and no one is safe from the march of the reds in Washington. The Tea Party patriots better man up for a fight.
Thursday, March 26, 2009
Obama's Liberty Crushing Idea of the Day
Fascistic Socialists are back on the March Today.
Timothy Geithner, who could not manage to properly oversee his own taxes, is today briefing Congress on the Obama Administration’s plan for a huge expansion of centralized government oversight and regulation of any company that -- handles money. This proposed plan will prevent risk taking, reduce returns for investors, limit incomes for financial managers, and stymie innovation.
The Obama/Geithner plan is a rejection of capitalism and personal responsibility. It will be hedged in terms like “policing risk” and “restoring faith in the financial system” and “limited only to those very large institutions”, but what it will produce is a massive flight of investment capital offshore, along with a brain drain of financial talent chasing that offshore capital. Make no mistake; the Statists in the Obama administration intend to regulate ALL financial institutions, down to the smallest self-directed investor.
The result will be lackluster returns on all financial instruments, meaning the private investments people make for retirement will no longer be able to satisfy their long term financial needs. The next step would then be a Statist uniform national retirement plan.
In short, this is a plan for the Socialization of US financial markets and personal retirement accounts. No risk, no reward, and vilification of anyone who seeks to take risks and have rewards.
Statism is Fascistic Socialism. Marx, Stalin, and Pol Pot would be proud of Timmah! today.
Timothy Geithner, who could not manage to properly oversee his own taxes, is today briefing Congress on the Obama Administration’s plan for a huge expansion of centralized government oversight and regulation of any company that -- handles money. This proposed plan will prevent risk taking, reduce returns for investors, limit incomes for financial managers, and stymie innovation.
The Obama/Geithner plan is a rejection of capitalism and personal responsibility. It will be hedged in terms like “policing risk” and “restoring faith in the financial system” and “limited only to those very large institutions”, but what it will produce is a massive flight of investment capital offshore, along with a brain drain of financial talent chasing that offshore capital. Make no mistake; the Statists in the Obama administration intend to regulate ALL financial institutions, down to the smallest self-directed investor.
The result will be lackluster returns on all financial instruments, meaning the private investments people make for retirement will no longer be able to satisfy their long term financial needs. The next step would then be a Statist uniform national retirement plan.
In short, this is a plan for the Socialization of US financial markets and personal retirement accounts. No risk, no reward, and vilification of anyone who seeks to take risks and have rewards.
Statism is Fascistic Socialism. Marx, Stalin, and Pol Pot would be proud of Timmah! today.
Wednesday, March 25, 2009
Timmah! Geithner opens mouth, kills markets
Timothy Geithner, at the Council on Foreign Relations today, said the U.S. is "open" to a proposal from the governor of the China's central bank to create a new global currency to replace the dollar. Looks like Timmah! sees no need for the United States to maintain sovereignty over its own currency. While Timmah! Hedged by comparing what China proposed as an evolution to the IMF’s special drawing rights, the Communist Chinese proposal was clearly one designed to replace all national currencies with a global currency.
"We’re actually quite open to that suggestion – you should see it as rather evolutionary” said Geithner.
As a results, the dollar took a nosedive in currency trading, and the US stock market indices moved into negative territory after enjoying a modestly good morning.
"We’re actually quite open to that suggestion – you should see it as rather evolutionary” said Geithner.
As a results, the dollar took a nosedive in currency trading, and the US stock market indices moved into negative territory after enjoying a modestly good morning.
Monday, March 23, 2009
Geithner and Obama Fail Economics 101
Today, Treasury Secretary Timothy Geithner is proposing a new program that will allow banks and finance houses to sell upside-down mortgage-backed investments to a "private-public partnership" entity. In this deal, Geithner says that the private sector must take "risks." Of course, the public part of the "private-public partnership" is taxpayers.
Geithner must have failed Economics, or Geithner and Obama intend to blackmail the "private sector" and rip off taxpayers.
Banks can make loans only to the extent they have assets to back the loans. For years, banks made loans based on the present value of a bundle of mortgages. When the housing prices fell, the mortgages became less secure, and thus less valuable. As a result, the banks were losing asset value, and with their asset base value diminished, their ability to loan money was likewise diminished.
Geithner and Obama's proposed plan today has the stated goal of removing "toxic" assets off the books of the banks, so that they can start making loans again.
Here is the problem with that: the "toxic" assets are not valueless. Merely taking these assets off the books of the banks is not going to free up one nickel in available loan capital; in fact, it lowers it. The only way loanable capital is increased for these banks is if the “toxic” assets are purchased by this “private-public partnership” at greater than the present market value.
Do Obama and Geithner expect savvy private investors like hedge fund operators will pay greater than market value for “toxic” assets? Market value already factors in the “risk” Geithner wants the private investors to take, so who in their right mind would do so?
This might occur in two ways:
First, as a sweetener, the public part of the partnership - the taxpayers - could give interest-free loans to these private investors who would then purchase “toxic” assets. This means playing with house money and betting on the come. The assets may improve their value over time to cover or exceed the loan value, and if they don’t, you just bankrupt the entity receiving the loan and walk away. Either way, Geithner’s promotion to Treasury Secretary pays handsome dividends to his Wall Street buddies at the expense of the taxpayers.
Second, Obama could use the various regulatory arms of government to threaten/blackmail healthy financial institutions to purchase some of these toxic assets at greater than market value, and these institutions might do so chalking up the government shakedown as a cost of doing business.
While some of the first two options will undoubtedly occur, the biggest part of the “toxic” asset removal will be the third route: the public part of the “partnership” - the taxpayers - will buy the lion’s share of these bank assets. Thus Geithner and Obama (on your behalf, of course, since you don’t know how to spend your own money wisely) will own and control a solid hunk of the real estate market. And why would Obama seek to maximize that investment for the taxpayers when ACORN would like to use those houses for “underprivileged” families who just need a little hand up?
Under this plan, you would not just be paying other peoples’ mortgages; you would be buying their entire house for them.
Welcome to Obama’s Socialist Utopia.
Geithner must have failed Economics, or Geithner and Obama intend to blackmail the "private sector" and rip off taxpayers.
Banks can make loans only to the extent they have assets to back the loans. For years, banks made loans based on the present value of a bundle of mortgages. When the housing prices fell, the mortgages became less secure, and thus less valuable. As a result, the banks were losing asset value, and with their asset base value diminished, their ability to loan money was likewise diminished.
Geithner and Obama's proposed plan today has the stated goal of removing "toxic" assets off the books of the banks, so that they can start making loans again.
Here is the problem with that: the "toxic" assets are not valueless. Merely taking these assets off the books of the banks is not going to free up one nickel in available loan capital; in fact, it lowers it. The only way loanable capital is increased for these banks is if the “toxic” assets are purchased by this “private-public partnership” at greater than the present market value.
Do Obama and Geithner expect savvy private investors like hedge fund operators will pay greater than market value for “toxic” assets? Market value already factors in the “risk” Geithner wants the private investors to take, so who in their right mind would do so?
This might occur in two ways:
First, as a sweetener, the public part of the partnership - the taxpayers - could give interest-free loans to these private investors who would then purchase “toxic” assets. This means playing with house money and betting on the come. The assets may improve their value over time to cover or exceed the loan value, and if they don’t, you just bankrupt the entity receiving the loan and walk away. Either way, Geithner’s promotion to Treasury Secretary pays handsome dividends to his Wall Street buddies at the expense of the taxpayers.
Second, Obama could use the various regulatory arms of government to threaten/blackmail healthy financial institutions to purchase some of these toxic assets at greater than market value, and these institutions might do so chalking up the government shakedown as a cost of doing business.
While some of the first two options will undoubtedly occur, the biggest part of the “toxic” asset removal will be the third route: the public part of the “partnership” - the taxpayers - will buy the lion’s share of these bank assets. Thus Geithner and Obama (on your behalf, of course, since you don’t know how to spend your own money wisely) will own and control a solid hunk of the real estate market. And why would Obama seek to maximize that investment for the taxpayers when ACORN would like to use those houses for “underprivileged” families who just need a little hand up?
Under this plan, you would not just be paying other peoples’ mortgages; you would be buying their entire house for them.
Welcome to Obama’s Socialist Utopia.
Sunday, March 22, 2009
Obama's First Hundred Days
So we are about eight weeks into the B. Hussein Obama presidency. In his first hundred days:
- Obama has crashed the stock market (losing more value than the 9/11 attacks caused)
- Nominated a bevy of tax evaders to cabinet positions
- Proposed a budged that will create budget deficits four times greater than the combined deficits of all prior Presidents
- Asked for $900 million to be given to Arab terrorist organizations, while
- Proposing that our injured war veterans pay for their medical treatment out of pocket.
- In the middle of the worst recession since Jimmy Carter, Obama has proposed the economy-killing cap and trade scheme and sent the bumbling Timothy Geithner to Congress to argue for it
- Announced a scheme by which hard working taxpayers pay the mortgage payments of people who should never have been given a mortgage in the first place
- Announced another scheme by which hard working taxpayers absorb all the bad debt held by banks
- Supported a new marginal tax rate of 92%
- Has openly spoken of regulating the salaries of bankers like some Stalinist dictator.
For the benefit of this nation, Barak Hussein Obama’s term as president cannot end soon enough. God save the United States from this radical Communist.
- Obama has crashed the stock market (losing more value than the 9/11 attacks caused)
- Nominated a bevy of tax evaders to cabinet positions
- Proposed a budged that will create budget deficits four times greater than the combined deficits of all prior Presidents
- Asked for $900 million to be given to Arab terrorist organizations, while
- Proposing that our injured war veterans pay for their medical treatment out of pocket.
- In the middle of the worst recession since Jimmy Carter, Obama has proposed the economy-killing cap and trade scheme and sent the bumbling Timothy Geithner to Congress to argue for it
- Announced a scheme by which hard working taxpayers pay the mortgage payments of people who should never have been given a mortgage in the first place
- Announced another scheme by which hard working taxpayers absorb all the bad debt held by banks
- Supported a new marginal tax rate of 92%
- Has openly spoken of regulating the salaries of bankers like some Stalinist dictator.
For the benefit of this nation, Barak Hussein Obama’s term as president cannot end soon enough. God save the United States from this radical Communist.
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