The Madoff Effect

Now that disgraced fund manager Bernard Madoff has been sentenced to 150-years in federal prison, and must return 171-billion dollars for running the largest ponzi scheme in history by bilking thousands of investors worldwide of their retirement accounts, its high time to shine the spotlight on the hundreds if not thousands of fellow rats within the walls of Wall street. This would be the perfect time to bailout the taxpayers in our country by disclosing the means and funds in which an elite group of mainly hedge fund managers worldwide manipulated the stock market, destroying our banking system and sending the U.S. economy into a tailspin. The CREDIT DEFAULT SWAP market and other mechanisms have enabled these fund managers access to TRILLIONS of dollars at our country's expense. By establishing a National Economic Security Council, and labeling all trades made within the last fourteen months as subversive activity, in which it can be PROVED that institutions or corporate entities were brought down by these individuals. Transparency and an audit of these stock trades would put several trillion dollars back into a depleted economy and revitalize a scenario desperate for solutions. All offenders could still keep their jobs and assets made outside the fourteen month time frame. The National Economic Security Council would of course RE-REGULATE the process that caused the damage to these entities, as to prevent any future occurrences.

Prime Time

As we move towards one hundred percent burn through in the sub-prime mortgage market, another wave is mounting as it approaches the shores of banks balance sheets in the form of prime loans, these loans were eerily similar to those loans made to individuals with bad credit in there qualification and adjustment structure, but these clients had good credit scores. The mortgage industry labeled them as JUMBO loans, or PAY OPTION loans referring to the typically sizable loan amounts usually exceeding the six hundred thousand plus range. Who wouldn't be attracted to the NO MONEY DOWN, NO INCOME VERIFICATION pitch on a million dollar mansion in the unprecedented appreciation wave of just two years ago. The fact is that just as many people fell victim to the predatory practices of these unscrupulous individuals within the mortgage industry, all the while the enabler, the U.S. GOVERNMENT turned a blind eye in the form of mortgage deregulation instituted in the late 1990s. The majority of these loans adjust upward in the next twenty four months A trend of defaults occur due to income parameters and unemployment figures leading to foreclosure, the loans land as toxic elements on bank balance sheets. This drives down the price of financial stocks instigating a sell off and market volatility. The government throws massive capitol into the banking system in an attempt to absorb these bad loans, and the cycle repeats itself. why not just implement the strategy of the 1980s savings and loan fiasco where a bad bank is established to harbour or de-leverage this bad debt, it worked well in the past and could work again in the future.

A Future Of Bubble Creation

As we speak the Government is quite possibly working on implementing new and aggressive strategies that will create new artificial bubbles within the stock, credit, and real estate markets, in a desperate attempt to drive us out of this relentless recession. The problem is that we have been there done that, and will undoubtedly return at some point to the negative feedback loop and systemic economic problems we are experiencing presently. It is now clear that the stimulus programs have made little positive impact in their intention of freeing up capitol for loans within the banking industry, in addition job creation, and loan modifications have all but failed and the stock market continues its highly volatile path. This administration will have to artificially re-inflate real estate values, deleverage massive debt loads, and somehow inflate the credit scores of those with bad credit in order to right this economy. Even stable consumers are now hording capitol and savings are the highest in decades. The net result of all this activity will cause one of two effects deflation or hyperinflation neither of which is a desirable scenario. It is now time for the fed to look at common sense indicators such as GDP, EARNINGS, UNEMPLOYMENT, and other core economic data before it throws more liquidity in the form of TARP money at the all consuming toxic mortgage market. Recent stock prices in steel, aluminum, durable goods, and diesel supplies show continued contraction not expansion, even an individual without any formal education as myself can figure that out.

State Of Emergency

The actions of California's highest elected official Arnold Schwarzenegger are not only irresponsible, they lack common sense and display several other unenviable traits all at the expense of California's weakest and most vulnerable citizens. To think that children's services, the disabled, homeless, and education will feel the brunt of this economic tsunami that Arnold is leveling against them is inconceivable. Those that elected this individual will also suffer from the lack of essential services such as fire protection and law enforcement. The Sacramento sheriffs department alone plans to cut patrol officers by over fifty percent, and is now endorsing the concept of concealed weapons permits so that citizens can protect themselves. The Governor also believes that the legalization of marijuana is a viable solution in solving the states deficit problems. This guy makes Grey Davis look like a genius and a saint to boot. But the fact that a bad motion picture actor from Hollywood has HOODWINKED Californians into believing that he was capable of performing the tasks of his office is no reason to except his incompetence.

Shame Of The Nation

Arnold Schwarzenegger Will undoubtedly go down as the most disliked governor in California state history after implementing his plan of budget cuts that were announced recently. California residents should feel some sort of responsibility for placing such an insensitive individual in public office, for it is the weakest and most needy individuals that will become collateral damage in this financial debacle. President Obama just announced NO BAILOUTS FOR CALIFORNIA, so help from the feds should not be expected. The cuts go as follows, elimination of welfare to work programs effecting approximately 500,000 family's, terminating health care for 1-million children statewide known as healthy family's, and Medi-Cal for residents 65 and older, no emergency health care for undocumented immigrants, phase out the Cal-Grant college aid program for students with enough audacity of hope to believe a college education is still important, cutting general fund support for state parks in half, releasing criminals a year early, borrowing 2-billion from local municipal budgets, lay off 5,000 state workers, cut K-12 school funding, this does not even include projected cuts to the disabled, and elderly, fire protection, law enforcement, those cuts will come later down the line.

Bulls To The Slaughter

With the recent run up of some bank stocks exceeding the 30% mark, you would tend to believe that all is well on wall street and a reemergence of the bull market is occurring. For those that study the markets history and take into account such fundamentals as real earnings, unemployment figures, GDP, exports, and other factors, you could make the case for what some have called a SUCKERS RALLY happening recently. The reality is that an estimated 1-Trillion dollars in toxic assets are yet to be realized in the next 8 years do to resets on interest only loans in the commercial and residential real estate market. Why these factors remain ignored is pure conjecture. One could assume that this administration now needs to project a constant stream of positive sentiment so that the market moves upward. The net result is that the formula on these assets goes as follows, the resets occur causing defaults and foreclosures, toxic loans fall on banks balance sheets causing downward pressure on bank stocks instigating a sell off. A more sensible solution is to create a BAD BANK to harbor these toxic assets, so that financial institutions are freed up to loan money on transactions that are responsibly structured, thus increasing their rate of success. This strategy has worked well in the past and there is no reason that it couldn't work in the future.

Twist Of Fate

Today Benjamin Netanyahu and Barack Obama met at the White House to discuss the Iranian dilemma. It is widely believed that Iran is only fourteen months from having enough enriched uranium to assemble a nuclear weapon, and has already achieved the missile technology as a carrier system that is easily within range of the tiny state of Israel. Due to the genocidal comments made by Iranian President Mahmoud Ahmadinejad aimed towards the people of Israel, it is good to see that both countries have an open dialogue and are in agreement that something must be done immediately. Ironically the Palestinians could become Israel's greatest allies, as they must realize that they themselves would become nuclear collateral damage if Iran's anti-Semitic goals were to come to fruition. Due mainly to the close proximity of several Arab countries surrounding the Gaza strip, a strange twist of fate could develop between mortal enemies. Peace cannot happen without the Arab world admitting that Israel has the right to exist. Although Ahmadinejad does not have the capability to act on his controversial beliefs as he is not Iran's supreme leader, that privilege is the Seyyed Ali Khameini's. This threat must be dealt with soon, as this could propel the world into a state of war of epic proportions.

Reality Check

Its starting to become apparent that Barack Obamas so called GREEN SHOOTS in the economy have been sprayed with economic weedkiller, in the form of REAL numbers. The lack of common sense strategies is beginning to rear its ugly head. We all know that its impossible to spend your way out of debt, and throwing TRILLIONS of dollars at toxic assets does not make sense. CONSUMER SPENDING fell 0.5% in April, when economists expected it to be flat, this indicates a much deeper recession than previously projected. Imported PETROLEUM is up 15.4% in April, while EXPORT prices are down 6.8% from last April. BOND prices rose, while a startling 342,000 notices of default were sent out to homeowners nationwide. MORTGAGE APPLICATIONS slipped to the lowest level since March even when interest rates are the lowest in decades. Banks hoarded a record 1.1 Trillion dollars of cash even after the Treasury and Central Bank made emergency injections of capitol, and set up special lending programs to ensure lenders extend credit to households and businesses alike. The only problem was the government forgot to install regulation to ensure that loans would be made to those of intention. The net result is the government gets its power grab, while the taxpayer picks up the tab.

Scary Template

With the market up over 30% in just over a month the temptation is to believe that capitulation has been achieved and we are in the midst of a bull market run. We must remember that the reason for a turnaround in the banking sector might well be due to the artificial liquidity infusion designed by the U.S. TREASURY, and that huge exposure to toxic assets still exist, and will remain on balance sheets for some time to come. Most experts agree we are in the midst of a contraction in available credit to consumers and this will hamper a return to consumer spending. Those who have studied the great depression see a similar template occurring, in the market crash of 1929 stocks plunged 48% in just two months, followed by a surge of almost 50% and then declined 86% from the high of the rally. You all know the old saying HISTORY REPEATS ITSELF, the odds of this happening again are probably slim, due to the fact that government intervention did not take place back then. But the fact that fundamentals such as true earnings, positive employment figures and GDP growth, property appreciation just don't bear this turnaround out. A return of these elements are the only path to real economic progress.

Bad News For The Wealthy

Mr Obamas health care overhaul blueprint was unveiled on Saturday, and apparently their was a substantial error in the estimate of the original proposal, what does this mean? The government is going to need more money than they thought, lots more. So they decided to appropriate the funds by tightening Estate tax rules, giving wealthy taxpayers less flexibility to minimize their liability on inherited goods. Businesses will also be targeted to close the gap on the shortfall, they estimate a needed one Trillion dollars to reach their goal of socialized medicine. If their health care plan plays out like the recent bailouts in the banking sector, one Trillion dollars is grossly underestimated. The middle class is no longer the preferred target to acquire additional funding for the plethora of projects on this administrations drawing board. Support for these agendas increase daily as the media continues its unrelenting coverage 24-7, and the power of their adversaries diminish. Who would of thought that the Republicans spokesman Rush Limbaugh would fall so far and so fast. He is now viewed by the left as an Right wing whack-job, not to be taken as a serious threat, now that two thirds of Americans consider themselves Democrats.

Regulatory Control Ahead

Representatives of the trade groups such as large securities firms, hedge funds, and banking institutions met today as Treasury Secretary Timothy Geithner laid out his plans to formulate a position where one individual is in charge of mitigating SYSTEMIC RISK within the marketplace. If risk is found he or she will impose regulation to stem any damage that the regulator perceives. This revelation by the Treasury Secretary will undoubtedly cause a view of extreme divergence, and slow the process. Barack Obama has already let it be known that he wishes to have this legislation in place and the position filled by the end of the year. I believe that a council would better serve this purpose, for the mere fact that an excessive concentration of control in the hands of CEO'S and HEDGE MANAGERS is most likely what got us into this economic dilemma, and to much control by ONE regulator could have a similar effect. The net result from these firms perspective is reduced latitude in trades and sectors, thus reducing their ability to reap great profits for their clients. Hopefully the right decisions are made as the taxpayer is undoubtedly on the hook for deals cut on either end.

California's War On Education

Leaders of California's public universities voted yesterday to raise undergraduate fees 10% next year. Another bright idea in a plethora of mistakes made by academia and state government officials. As if the burden of a dream of a higher education by the states youth isn't distant enough, lets heap more debt onto the shoulders of these students. This all means the cost of a college education in California will have risen 70% since 2001-even when adjusted for inflation. These idiots seem to forget that this country was made great by education followed by innovation, and college is the direct path to an innovative society, without it we cannot compete on an increasingly globalized platform. These decision makers were quoted as saying the plan will take from the rich and give to the poor, in the form of additional available capitol for student loans. In order for that comment to be correct you would have to assume that a disproportionate amount of students are from the silver spoon club with affluent parents, i bet if you run the numbers its the polar opposite with more students obtaining loans with interest rates to be paid back after completing their education. These individuals should do the right thing and keep their mouths shut.

Powder Keg

Barack Obama met with Hamid Karzai, and Asif ali Zardari today at the White House in an attempt to shore up a commitment by Afghanistan, and Pakistan to fight the war on terror together, as the Taliban is just a mere 60-miles from Islamabad the capitol of Pakistan. Thousands were forced to flee the region in what promises to be a deadly showdown. The meeting occurred as Secretary Of State: Hillary Clinton apologized for the deaths of dozens of local Afghan citizens that were killed by a stray U.S. missile strike on Monday. This incident continues to fuel anti-American sentiment in the region. The stress increases daily as multiple problematic scenarios escalate including increased violence in Iraq, just as Obama is shifting his focus to Afghanistan with a commitment of 20-thousand fresh troops. All this at a time when the issues of Iran and Israel are of utmost importance. There is no doubt that President Obama has undertaken the weight of the world upon his shoulders. No sitting president has dealt with this volume of critical issues here and abroad all at once, and his decisions made this year should all be ones for the history books.

Up In Smoke

Governor Arnold Schwarzenegger has apparently come up with a plan for increasing state revenue by working towards legalizing Marijuana and taxing those that use it for RECREATIONAL purposes. Maria and the kids must be proud to have such a good role model at home, imagine his children at school when another kid yells across the quad: HEY TELL YOUR DAD THANKS, as they light up a joint. Its individuals like Arnold that give California a bad reputation. His bright idea of putting an Indian gaming casino on every corner seems to have had little positive impact on the states deficit problems, and this idea probably would follow suit if passed. What kind of message does this send to our children, and those hard working individuals in law enforcement fighting the war on drugs, and the crime that it promotes? Has it gotten to the point where electing politicians with ethics and comprehensive solutions to budget problems is impossible? Its easy to see why Schwarzenegger has recently achieved the distinguished award of the second lowest approval rating in California history, only to his predecessor Gray Davis which was ejected from office.

Dont Unpack Your Bags Just Yet:

Last month Rush Limbaugh declared defiantly that he would be abandoning his penthouse in New York City, for some new digs in Florida due to an unjust tax burden placed on himself and other wealthy individuals by the state. It appears that he just might have to leave the country in order to live the opulent lifestyle he has become so accustomed to here in the U.S. without being subject to Barack Obamas new WEALTH REDISTRIBUTION program that the Treasury Secretary Tim Geithner announced today. No more tax LOOPHOLES declared the feds. Apparently they plan to abolish the massive benefits big corporations and wealthy individuals receive by off-shore banking, and doing business in foreign countries. This administrations vision of the future is becoming clearer daily and it does not look bright for the rich. A storm is brewing and its wrath is in the form of CLASS WARFARE, by the end of Obamas first term the playing field should be level, and the wealthy will be reduced to groundskeepers. Forget the kids attending MIT with a degree in mathematics, and becoming a successful DERIVATIVES trader or HEDGE FUND MANAGER on Wall Street. Instead they will be prepared for jobs in such stimulus programs as road construction, or GREEN ECONOMY projects. Rush will be broadcasting his show from the Camen Islands, but the upside is Havana is only a short flight for those great cigars he likes to smoke.

Munger Favor's 100% Ban On (CDS) Market.

My original interest was to find the root cause of the negative feedback loop we are now experiencing in today's economy, and understand how this great Nation could flip-flop from the CAPITALISTIC FREE market system of a year ago, to one of escalating BIG GOVERNMENT and a socialist mindset. In less than 48-hours of writing my blog on the Credit Default Swap dilemma, my suspicions have been confirmed by an interview done on Bloomberg yesterday on May 1st-2009 with Charles Munger second in command at Berkshire Hathaway and Warren Buffets right hand man. Mr Munger says that if he were the Governor of the world he would ban the CDS market entirely for good, basically because of the systemic damage caused to the market by the greed of a few short-sided Individuals. He goes on to state that this can only be accomplished by intervention by the Federal Government installing regulation to prevent the excesses that caused the current fiscal crises. I myself had no idea that the CDS market was so vast, until I ran across the raw numbers in the Time magazine article i blogged about on Thursday , the CDS market at 45-trillion dollars was according to the International Derivatives Association over twice the size of the entire 2007 value of the U.S. STOCK MARKET, and over four times as big as the entire 2007 U.S. mortgage market. We all now know the motive (GREED) and now the process (CREDIT DEFAULT SWAPS) that these influential Individuals have been using to wreak economic havoc on this country.

The Black Hole Of Wallstreet

It has now become apparent to me after running across an article from Time magazine, written in March of 2008 entitled Credit Default Swaps: The Next Crisis? that hopes for an economic recovery anytime soon are unlikely. The numbers they quote are accurate and staggering. First I must explain exactly what a CDS is. It is a credit derivative contract between two counter parties. The buyer makes periodic payments to the seller, and in return receives a payoff if an underlying financial instrument defaults. Its designed to work like homeowners insurance to protect against losses like fire and theft, giving the buyer peace of mind. But the big difference is the insurance market is regulated and the CDS market is not. Hedge funds and others on wall street are reaping great profits by betting against Americas corporate and financial interests sucking money out of our Economy and taxpayers pockets, as we try desperately to prop-up these damaged entities, in the form of bailout money. Just how big is this perverse market? according to the International Derivatives Association it exploded to $45 trillion in 2007, twice the size of the U.S. stock market valued at $22 trillion, and huge compared to the $7.1 trillion mortgage market. In addition the 25 top commercial banks hold more than $13 trillion in credit default swap exposure. Banks such as JP Morgan Chase, Citibank, Bank of America and Wachovia. As these bad bets as the Obama administration has coined them, continue to be made a cycle of losses land on their victims balance sheets, and in turn the taxpayer is left riding the Credit Default Swap roller coaster. The proof is in the pudding as Chrysler files bankruptcy today, and this administration points its finger of blame at hedge funds, but fails to correct the problem when it has the power to do so.

Jumping Ship

Arlen Specter the five term Republican Senator from Pennsylvania, switched parties Tuesday blindsiding his constituents, and giving a probable 60-vote filibuster Senate majority to the Democrats. It is likely that Mr. Specter has been courted by the Obama administration for months, seeing the opportunity to solidify remaining agendas like Health Care, Immigration, and Gun Control. You have to give Obama credit for the most aggressive power grab in the history of American politics as we know it. They seem to have all the bases covered and most of their pawns in place for a CHECKMATE call. The 29-year Senator even admitted that due to his recent polling figures that indicated it unlikely that he could win a sixth term in Pennsylvania, was the determining factor in his sudden change of parties. As he put it, I just could not let that happen. The Obama administration had made it perfectly clear that he would have their full support in a re-election bid if he decided to make the change. He stressed that he will not be an automatic 60th vote, possibly to deflect any impression that he is a yes-man politician, only time will tell.

Swine Of The Times

WOW you could not make this much news up. It seems that just about every day that you turn on the tv set or open a newspaper, there is a barrage of heightened alerts if its not Economic downturns, the Taliban overrunning Pakistan and getting hold of its NUKES, now a possible swine flu pandemic here and abroad. It certainly makes a case for those weak minded individuals that choose not to watch reality unfold daily. I say its better to deal with the truth, even if as old Jack puts it YOU CANT HANDLE THE TRUTH. Is it really that bad out your front doorstep? or is the (MASS MEDIA) running this show? You almost need to run out and grab up a prescription of Prozac if you plan on watching tomorrows edition of the situation room with Wolf Blitzer. The escalation of such events are of mind boggling proportions. I guess what I'm getting at, is the Media making very serious situations WORSE by reporting them with such consistency and intensity? or is it their duty as news sources to keep us informed?

Mortal Danger

One of the most serious threats to the security of the United states of America is unfolding as we speak, and Barack Obama is meeting with various heads of credit card companies today trying to iron out new consumer protection legislation, while his Secretary of State Hillary Clinton deals with the hard stuff, Clinton called the recent Taliban run towards Islamabad the capitol of Pakistan, a MORTAL DANGER. President Obama continues a pattern of miscues and the lack of judgement seen earlier in the election, and now in his Presidency. Beginning with the Reverend Wright, and William Aires controversy, and most recently bowing to a Saudi King, and laughing it up with Hugo Chavez, and trying to make good with Cuba. He has dealt with foreign policy in a mannerism not seen by previous presidents. It only makes sense to deal with leaders that have made it clear that nothing short of our complete destruction would be acceptable, by acting from a position of strength, with a touch of diplomacy, as opposed to flat out submissive posturing, and continuous apology's for perceived past transgressions made by the United States. Hillary and Bill clearly see the urgency in this scenario while Obama focuses on photo ops like the one today. Imagine an AQ-Khan scenario where the Taliban sells the fifty to one hundred estimated Weapons of Mass Destruction presently in Pakistan, to our enemies throughout the world on a nuclear black market. Instead the base of sale is Pakistan as opposed to Dubai, where Khan did business in the 1990s, and how convenient to have Osama bin Laden just down the road. This is the making of a truly apocalyptic nightmare. Another consideration and most probable scenario, is the little state of Israel taking action to curtail a rightly justifiable perceived threat to its existence.

The Next Credit Crunch

In a recent interview between renowned financial guru Meredith Whitney formerly chief financial analyst for Oppenheimer, and Americas richest man Warren Buffet, Meredith laid down the gauntlet with her latest prediction in Whitney's sector of expertise, the credit market, and the picture is not a good one. She claims that lines of credit will be cut by two trillion this year and will top out at two and a half trillion by the end of 2010. Since lines of credit are the LIFE BLOOD of the majority of Americans, this would retard the ability for a timely economic recovery as the one promised by this administration. The major players in this sector are JP. Morgan Chase (JPM), Bank of America (BAC), Citigroup (C), Capital One (COF), America Express (AXP). Another subject she did not discuss rate jacking. In the small print on credit card companies contracts they retain the right to elevate your interest rate to as much as thirty percent if you are just one day late. Whats worse is that the other card companies retain the right even if its another companies card you are late on, and they all report to one another. This could be the proverbial straw that broke the camels back if shes right.

The Numbers Dont Lie

Well folks the numbers just came in again, and show this recession is deepening at almost every level. Housing starts are down, unemployment has reached the six million mark nationwide at 8.5% the highest level since 1983, and a staggering 663,000 jobs lost for the month of March alone. Foreclosures are up 24% year to date at a total of 803,489 homes lost, and the second largest retail mall corporation has filed bankruptcy. This all means that those glimmers of hope Barack Obama talks of could just be SMOKE and MIRRORS. For example, why does a program designed to help as many as 9 million individuals keep their homes exist? when about 7.6 million don't even qualify for the program. And his plan for refinancing is even worse. The American people deserve better when it comes to developing comprehensive plans to solve these dilemma's. It would be a shame to get nothing in return for the trillions spent on bailouts, acquisitions, and payoffs.

Laughing at Trump

Famous TV star and billionaire real estate mogul Donald Trump, claims in a recent CNBC interview on Wednesday that when he sought out loans for Commercial real estate acquisitions, he was laughed at. This is not good news for average Americans looking for financing and loans, to float their lifestyles. If the Donald CAN'T get a loan, how can we? And he seemed to be right in the assessment that he thought that they were hoarding the capitol. That is exactly why there doing it, to cover holes in their balance sheets in the form of TOXIC Mortgages, whats worse is these assets continue devaluation, and they don't know when they will bottom. In addition to this problem, the banks aren't required to loan a dime of the capitol given to them by this administration. One of the most respected financial analyst, former Oppenheimer consultant Meredith Whitney said we are looking at an additional thirty percent decline in home values in some areas of the country, as well as being on the verge of a catastrophic credit crunch with lines being cut as much as fifty percent. If she is remotely correct we are not even at the fifty yard line in this recession.

Economics 101

There are two lines of defense the Federal Reserve employs in stabilizing the economy in recessionary times, one is monetary policy which deals with injecting money directly into the banking system so that loans can be made, and interest rate manipulation to elevate peoples interest in acquiring those loans. The government has taken monetary policy to a level unseen in previous recessions by injecting over a trillion dollars recently, and rates are the lowest in decades. It only makes sense to believe fiscal policy, which involves government spending, and taxation will be implemented with the same fervor. This administration has set the table for spending on the health care, immigration, and the green economy agendas. Huge tax increases across the board are the net result for repayment of these debts with a touch of hyperinflation and dollar devaluation to boot. Tea parties are happening across the nation tomorrow, to show peoples rejection of such irresponsible fiscal policy. Sacramento California expects over ten thousand people to show up, at the steps of the state capital. With businesses closeing daily, and state revenue drying up tomorrows tea party should be quite interesting to say the least.

The Quickening

If the Obama administration is successful in achieving their carefully laid out agenda, our future should look something like this near the end of his first term. Presently they are working diligently on stabilizing the banks, by infusing large amounts of cash into these institutions, as to free up lending, and solve liquidity problems. they are also working on forcing the American auto industry to retool and put in place, key people that fit the governments vision of what type of vehicles should be built for the future, and the personnel that runs these companies. We also know that health care will become socialized medicine, and the cost will be massive. In addition Barack, and other key Democrats such as Diane Feinstien have let it be known that gun control is in the near future. Much higher taxes are inevitable to repay all this Tarp money. Big government is an understatement when describing the future of America, Socialism is not. And the national debt could reach twenty trillion dollars, when they raise the peverbial mission accomplished banner.

Maritime Nightmare

Recently an escalation of hijackings have occurred off the coast of Somalia in the Aidan sea, this area is a busy shipping lane in which thousands of vessels carry cargo, and tourists on a regular basis. currently there are over two hundred people being held for ransom, most of which work for companies in the maritime cargo industry. These ships are boarded, and hostages are taken, and usually released when the companies insurance carrier pays the ransom. Last week the U.S. flagged Maersk Alabama was boarded and the captain Richard Phillips was taken hostage, in exchange for the Maersk and her crew. The ordeal ended with Phillips unscathed after a highly elite team of Navy Seal snipers shot and killed the pirates from the deck of their ship. This incident has brought great debate on how these hijackings should be dealt with, without causing an A-symmetrical war or other conflicts such as Black Hawk down in which many military personnel were killed. Talks are under way, with arming vessels with weaponry and security personnel at the forefront of solutions. In the meantime Barack Obama has logged his first armed conflict decision successfully, by leaving the call to shoot to kill to the commander of the naval vessel.

Smoke and Mirrors

The same tactics used to destroy our investment banking system in recent months are now being used by the Obama administration in the form of deceptive sediment released to media outlets as to change the average Americans viewpoint of the current state of the economy from negative to positive. The government realizes that consumer confidence trumps liquidity infusion, and it is Americans spending their hard earned money on goods and services on a consistent basis that makes a healthy economy. Recent evidence of this deceptive news strategy is Citibank and Wells Fargo reporting that they have miraculously become profitable, and attributed this new success to loans made within their mortgage departments. It does not take a rocket scientist to figure out that when Citi got forty billion, and Wells got fifteen billion in Tarp funds that their balance sheets would show a positive reflection in the form of available capitol for loans to be made. And the most recent news, is an huge increase in housing sales, of coarse sales have surged, because of investors jumping into the market realizing that home prices and interest rates are the lowest in decades. Now the results everyone has been waiting for in the form of stress tests in the banking system, to determine solvency, are suddenly going to be suppressed. The longer the truth is withheld in these matters, the deeper the recession.

Wealth Evaporation

This year the Obama administration is planning some of the most dramatic changes ever implemented in the way that wall street does business. In a recent interview on meet the press Tim Geithner, the Treasury Secretary, divulged that plans are under way to regulate the way Hedge funds can operate within the stock market. Their goal is to move away from the boom and bust era we are seeing in today's economy. How will this be accomplished? by reinstalling the uptick rule and other mechanisms that regulate trades made by highly influential individuals that manage these funds globally. I also believe that they will limit the trades this administration has coined as bad bets, where a fund will actually bet huge amounts of cash on the decline or rise of stocks, institutions, commodities and other investment vehicles. Since the definition of a hedge fund is a highly speculative, loosely regulated, investment tool, this type of change will greatly diminish the ability to secure the large amounts of liquidity made in recent years. Some of these financial geniuses have made as much as two billion dollars a year themselves, with George Soros making over one billion in 2008 in a nightmare market scenario. The flip side is that everyone from the average worker investing their hard earned retirement money, to the marginally wealthy American with less than one hundred million dollars will be making a fraction of the potential yields that they saw in the markets past. This will stagnate Americas ability to achieve accelerated wealth models that put us in a class by our self. We will not only suffer the wealth evaporation to date in the form of stock losses, but the wealth evaporation in limited future, stock gains.

Economic Endgame

The stock market continues it’s highly volatile swings of upturns followed by larger Dow downturns, in its quest for capitulation of the market, so that a reemergence of a bull market run can be had, and the previous highs of fourteen and some change during 2007 can be realized. The only problem with these aspirations is that one would have to believe that the market driver mechanism positive sediment would outpace negative sediment on a sustained basis in order for this to occur. One would also have to believe that we have achieved bottom in such areas as accelerated unemployment figures, toxic mortgage activity, a frozen lending market, GDP growth, and a breaking of the self prophesying negative feedback loop we are now experiencing at present. In addition we would have to throw common sense aside and believe that the unprecedented trillions of dollars this administration is spending in the form of bailouts, acquisitions, and payoffs is somehow going to right this economic titanic. Lets be serious, the only transparency in this colossal fiasco is that at some point, this debt is going to be paid back by dramatic increases in the form of tax code modification, not loan modification. Again the middle class will be the fall guy in this perverse economic opera, and a small group of highly elite government, and private sector individuals will implement this massive change. Change is coming alright, in the form of a new world socialist agenda, and the suppression and dissection of the wonderful free and capitalistic nation we have all grown to love. In light of the recent G-20 Summit meetings, it has become apparent to even Barack Obama that the burden and blame of this situation should be squarely placed on the shoulders of present and future generations of American citizens. This is the type of change that this nation can ill afford.