Dear Readers -
Please follow the link below, it will take you to the Treasury's Troubled Asset Relief Program ("TARP") Application. This application is 2 pages in length, and took me less than 5 minutes to fill out myself. This is how your money is being handed out, apparently!
US Treasury - TARP Application
Nuts? Ya. I never saw anything more ridiculous in my life.
Even a Nigerian scam requires more information than is requested on this application! I just applied for a mortgage, that took me hours to complete which represents an amount equal to 0.00000000005% of the total.
Unbelievable!
Wednesday, February 11, 2009
Monday, January 19, 2009
A Cautionary Note about the New President
We're all too happy to see a change over in Washington, particularly in the White House. One must realize that sometimes our jubilation is short lived and we realize that our choice has become a mistake.
If history is any guide, it serves to show that there has never been a President, at least in the past 50 years, who really changed the Political map in America. The formula which allows them to become elected is followed by both major parties - this formula pigeonholes their ability to make policy decisions that brings about real change. Particularly in first term Presidents, the idea is to tiptoe through various issues of the day and postpone them until after the second term in order to safeguard their stay in power.
And then there are those Presidents who have laid out their platform and followed a course that's entirely different. Do not forget that in 2000, George Bush's foreign policy was one of humility and peace:
All these promises were for naught, and his principles went out of the window come September 11th. As if it was all perfectly choreographed, plans to invade the world were suddenly brought to the forefront and ramrodded through a Congress and a people who were obedient and acquiescent under the circumstances.
The same may very well apply with Obama. He may not want to leave Iraq as soon as he promised. He may entangle us in Afghanistan indefinitely as he suggested. He's certainly going to spend our tax dollars freehandedly. Therefore, to me, I may end up with the worst case scenario - a quagmired foreign policy that does not result in world peace and an out of control government which is trying to spend its way out of an economic problem. He's already disappointed many with his selections - people from the past who will likely commit to the same old ways things are done. Nevertheless, perhaps indeed we will see something different from him. Perhaps he will balance our Foreign Policy. Perhaps he will see the dangers of the skyrocketing National debt.
Come Tuesday, it's nice to see that things are changing. But I certainly hope it is for the better.
If history is any guide, it serves to show that there has never been a President, at least in the past 50 years, who really changed the Political map in America. The formula which allows them to become elected is followed by both major parties - this formula pigeonholes their ability to make policy decisions that brings about real change. Particularly in first term Presidents, the idea is to tiptoe through various issues of the day and postpone them until after the second term in order to safeguard their stay in power.
And then there are those Presidents who have laid out their platform and followed a course that's entirely different. Do not forget that in 2000, George Bush's foreign policy was one of humility and peace:
All these promises were for naught, and his principles went out of the window come September 11th. As if it was all perfectly choreographed, plans to invade the world were suddenly brought to the forefront and ramrodded through a Congress and a people who were obedient and acquiescent under the circumstances.
The same may very well apply with Obama. He may not want to leave Iraq as soon as he promised. He may entangle us in Afghanistan indefinitely as he suggested. He's certainly going to spend our tax dollars freehandedly. Therefore, to me, I may end up with the worst case scenario - a quagmired foreign policy that does not result in world peace and an out of control government which is trying to spend its way out of an economic problem. He's already disappointed many with his selections - people from the past who will likely commit to the same old ways things are done. Nevertheless, perhaps indeed we will see something different from him. Perhaps he will balance our Foreign Policy. Perhaps he will see the dangers of the skyrocketing National debt.
Come Tuesday, it's nice to see that things are changing. But I certainly hope it is for the better.
Monday, January 12, 2009
International Affairs & Extle.com
At Extle.com, we have primarily focused on economic issues as it relates to libertarian principles. However, recent events have underscored the importance of also discussing foreign affairs and the stand Libertarians take as it relates to such events.
As Libertarians, which represent the core essence of the founding principles of the country, we approach such issues with trepidation. In any event, the loss of human life concerns us the most, regardless of political persuasion, race or religion. We are blind to "who is right" and "who is wrong" in any given situation. What matters to us is human suffering. As such, the role of the United States is to remain neutral and suggest that cooler heads prevail in areas of conflict. It is to encourage the cessation of hostilities and not takes sides and assign blame in the public sphere.
The United State's foreign policy has entangled itself in numerous foreign conflicts and has drawn and generated increased hatred against our country. Such policies have contributed to a more insecure homeland.
With particular reference to the situation of Gaza. The United States, via the Presidency, has taken a side in the conflict and has tacitly encouraged the continued bombardment of a captive population. Such encouragement has led to the deaths of over 800 civilians. The munitions being used in the territory is also troubling. The folks at Extle.com are opposed to the use of White Phosphorus munitions, particularly in its current application in close proximity to civilian installations. The burns produced by such munitions can be widespread, extremely horrific and painful.
The United States should heed the call of our founding fathers and avoid "entangling alliances" which compromises our own security. The United States should affirm itself as a balanced superpower that can function as a mediator to the benefit of all within the region. The new administration has the ability of setting a new example in foreign affairs, and fundamentally change the course and our moral standing.
As Libertarians, which represent the core essence of the founding principles of the country, we approach such issues with trepidation. In any event, the loss of human life concerns us the most, regardless of political persuasion, race or religion. We are blind to "who is right" and "who is wrong" in any given situation. What matters to us is human suffering. As such, the role of the United States is to remain neutral and suggest that cooler heads prevail in areas of conflict. It is to encourage the cessation of hostilities and not takes sides and assign blame in the public sphere.
The United State's foreign policy has entangled itself in numerous foreign conflicts and has drawn and generated increased hatred against our country. Such policies have contributed to a more insecure homeland.
With particular reference to the situation of Gaza. The United States, via the Presidency, has taken a side in the conflict and has tacitly encouraged the continued bombardment of a captive population. Such encouragement has led to the deaths of over 800 civilians. The munitions being used in the territory is also troubling. The folks at Extle.com are opposed to the use of White Phosphorus munitions, particularly in its current application in close proximity to civilian installations. The burns produced by such munitions can be widespread, extremely horrific and painful.
The United States should heed the call of our founding fathers and avoid "entangling alliances" which compromises our own security. The United States should affirm itself as a balanced superpower that can function as a mediator to the benefit of all within the region. The new administration has the ability of setting a new example in foreign affairs, and fundamentally change the course and our moral standing.
Tuesday, December 16, 2008
A Quantitative Headache
I've never been so shocked by the actions of the Federal Reserve. On one hand, the Fed is trying to get people to spend more money in order to stimulate the economy. On the other hand, the Government is taking actions to cause prices to rapidly increase. Essentially, this economy is a sinking boat - in an attempt to save the ship, more holes are being drilled into the hull.
The problem with declining prices ("deflation") is a dilemma that causes great harm to the financial institutions, however, on the other hand is beneficial to consumers. If commodity prices decline, loans which were based upon higher prices lose their collateral and will cause borrowers to default on their obligations. Such is the case in the housing market - a decline in housing prices has affected loans that were previously issued at higher underlying prices.
The Government does not want to see further deflation as it threatens the banking establishment. They're making wild decisions in an effort to stop it - including buying up these mortgages with newly printed money. When you make more money, prices of everything in theory should increase. By buying bad mortgage portfolios off of the very institutions that issued these bad loans, it frees them up to reissue more. Unfortunately, these banks have learned a hard lesson and have ceased loaning.
Nevertheless, when you flood the economy with dollars, their will come a time when inflation will get out of control and our currency will lose its worth. The idea of quantitative easing is being floated - translation: printing money and circulating it around in an effort to induce inflation and cause economic activity which would set new pricing equilibriums.
Rather than allowing the market to correct itself - resulting in lower prices in the short term for us poor consumers like you and I, the government wants to jack prices back up. The current course will set us up for high Oil prices, high food prices and high real estate prices once again.
The whole precipitator of our current economic situation was the excessive credit issued to the markets which resulted in unnatural demand in the real estate market. When people could no longer afford these mortgages because they lose their job - they lost their job because no one could afford to buy the product or services they offer because they too are paying large sums of money to maintain their excessive house.
The bottom line is, we need prices to decline to whatever the market would sustain and remain at this level in order to encourage buying and establish equilibrium. The government shouldn't devalue your dollars by printing money freely. The people most effected by this are those which live within their means and do not borrow unnecessarily - Me.
I said it before and I said it again, the best thing the Government could do is nothing. But nothing is something I don't expect the Government to do.
The problem with declining prices ("deflation") is a dilemma that causes great harm to the financial institutions, however, on the other hand is beneficial to consumers. If commodity prices decline, loans which were based upon higher prices lose their collateral and will cause borrowers to default on their obligations. Such is the case in the housing market - a decline in housing prices has affected loans that were previously issued at higher underlying prices.
The Government does not want to see further deflation as it threatens the banking establishment. They're making wild decisions in an effort to stop it - including buying up these mortgages with newly printed money. When you make more money, prices of everything in theory should increase. By buying bad mortgage portfolios off of the very institutions that issued these bad loans, it frees them up to reissue more. Unfortunately, these banks have learned a hard lesson and have ceased loaning.
Nevertheless, when you flood the economy with dollars, their will come a time when inflation will get out of control and our currency will lose its worth. The idea of quantitative easing is being floated - translation: printing money and circulating it around in an effort to induce inflation and cause economic activity which would set new pricing equilibriums.
Rather than allowing the market to correct itself - resulting in lower prices in the short term for us poor consumers like you and I, the government wants to jack prices back up. The current course will set us up for high Oil prices, high food prices and high real estate prices once again.
The whole precipitator of our current economic situation was the excessive credit issued to the markets which resulted in unnatural demand in the real estate market. When people could no longer afford these mortgages because they lose their job - they lost their job because no one could afford to buy the product or services they offer because they too are paying large sums of money to maintain their excessive house.
The bottom line is, we need prices to decline to whatever the market would sustain and remain at this level in order to encourage buying and establish equilibrium. The government shouldn't devalue your dollars by printing money freely. The people most effected by this are those which live within their means and do not borrow unnecessarily - Me.
I said it before and I said it again, the best thing the Government could do is nothing. But nothing is something I don't expect the Government to do.
Thursday, November 20, 2008
All Market Theories are now toast
Everything theory you every learned about how markets operate - ex. Portfolio theory - just throw it out in the garbage and set the can on fire.
Nothing right now is operating based on these 'tested' market theories. The last 10 years worth of gains in the markets have been eviscerated in the past 4 months.
They always say "Past performance does not guarantee future results." We have all become the proverbial Turkey on a Turkey Farm. For a thousand days in a Turkey's life, the Turkey is kept well fed by the farmer and is looked after by him. If you asked that Turkey what the next day will bring, the turkey will tell you that tomorrow will be like any other day. He's not going to expect the farmer who fed him well and took care of him for his entire life to off his head.
Markets are supposed to act rationally. Bullshit. Markets are behavioral, and people aren't rational. We had irrational exuberance at one time and now we have irrational pessimism. Markets are a collection of financial transactions of a common unit of trade that are transacted by people like you and me. When one person sells, someone else needs to buy. If one individual gets jittery and dumps a lot of shares, everyone else starts questioning it. The price may tick slightly downwards - "what information does that person have that we don't?" Others may become paranoid and follow suit. Some others may say, "these guys are nuts" and buy. Others will think to themselves, "ok the stock went up a little, time for me to bail now." The stock drops, some people may decide that "oh my gosh, I better cut my losses now" or "this drop is temporary, better pick up some bargains now." And so the stock swings wildly. In this market, there's a lot of this activity going on - trading based on a collection of individual whims - and it results in unprecedented volatility. Right now paranoia is winning - a lot of people couldn't handle the uncertainty and decided to bail on a whole slew of equities.
One golden rule I follow is that stocks can generally lose value faster than it can make it up. So trading on a day to day basis is generally not advised - you have to wait quite a while before you get a shot at making money. Not only that, you expose yourself to a time period of extreme volatility which the stock can lose value faster than it can make it up.
Another golden rule of mine - equities which do not pay a dividend are worthless (about 90% of firms). At some point, that company's business will cycle and it will lose enterprise value. It would have never provided you with any sort of return - in fact, all you got in exchange for your hard earned dollars is a piece of paper saying that you own a part of XYZ company that provides you with no value until you sell it to some other unfortunate individual.
I'm quite sure that the market is going to make up its losses in the next couple of years, but these kinds of events will occur and they will wipe out larges sums in portfolio values at some point in your life - whether it's 10, 20, 30 + years - we're going to face another one of these "unprecedented" events. All it takes is one catastrophic collapse in the market and your toast. And given your time frame, there's plenty of opportunities for this to occur.
After stock values recover (if they do*) and I get to the point where everything is break even or slightly higher, I'm bailing on everything equity based and no longer investing in this phantom market. Basing your retirement on a market based upon people's whims is not a strategy and it is not option.
*There have been cases in history which entire markets have collapsed and never recovered.
Nothing right now is operating based on these 'tested' market theories. The last 10 years worth of gains in the markets have been eviscerated in the past 4 months.
They always say "Past performance does not guarantee future results." We have all become the proverbial Turkey on a Turkey Farm. For a thousand days in a Turkey's life, the Turkey is kept well fed by the farmer and is looked after by him. If you asked that Turkey what the next day will bring, the turkey will tell you that tomorrow will be like any other day. He's not going to expect the farmer who fed him well and took care of him for his entire life to off his head.
Markets are supposed to act rationally. Bullshit. Markets are behavioral, and people aren't rational. We had irrational exuberance at one time and now we have irrational pessimism. Markets are a collection of financial transactions of a common unit of trade that are transacted by people like you and me. When one person sells, someone else needs to buy. If one individual gets jittery and dumps a lot of shares, everyone else starts questioning it. The price may tick slightly downwards - "what information does that person have that we don't?" Others may become paranoid and follow suit. Some others may say, "these guys are nuts" and buy. Others will think to themselves, "ok the stock went up a little, time for me to bail now." The stock drops, some people may decide that "oh my gosh, I better cut my losses now" or "this drop is temporary, better pick up some bargains now." And so the stock swings wildly. In this market, there's a lot of this activity going on - trading based on a collection of individual whims - and it results in unprecedented volatility. Right now paranoia is winning - a lot of people couldn't handle the uncertainty and decided to bail on a whole slew of equities.
One golden rule I follow is that stocks can generally lose value faster than it can make it up. So trading on a day to day basis is generally not advised - you have to wait quite a while before you get a shot at making money. Not only that, you expose yourself to a time period of extreme volatility which the stock can lose value faster than it can make it up.
Another golden rule of mine - equities which do not pay a dividend are worthless (about 90% of firms). At some point, that company's business will cycle and it will lose enterprise value. It would have never provided you with any sort of return - in fact, all you got in exchange for your hard earned dollars is a piece of paper saying that you own a part of XYZ company that provides you with no value until you sell it to some other unfortunate individual.
I'm quite sure that the market is going to make up its losses in the next couple of years, but these kinds of events will occur and they will wipe out larges sums in portfolio values at some point in your life - whether it's 10, 20, 30 + years - we're going to face another one of these "unprecedented" events. All it takes is one catastrophic collapse in the market and your toast. And given your time frame, there's plenty of opportunities for this to occur.
After stock values recover (if they do*) and I get to the point where everything is break even or slightly higher, I'm bailing on everything equity based and no longer investing in this phantom market. Basing your retirement on a market based upon people's whims is not a strategy and it is not option.
*There have been cases in history which entire markets have collapsed and never recovered.
Saturday, November 8, 2008
Change has not come...
Earlier this week, I decided at the last minute to vote for Barack Obama. Up until then I was going to vote for a third party candidate as McCain was surely out of the question - a maniac who was on a warpath with Russia is not someone who I'm keen on putting in the White House. His ding-dong choice for a running mate also sealed the deal.
The world seemed to think that Obama was going to lead to change, and so I voted for him.
I erred.
So far, I have learned that he is back tracking on many of his campaign pledges and taken several moves that have shocked and pissed me off completely.
1. He appoints as his Chief of Staff a man who served in a Foreign Military, the Israeli Military. This set me over the edge, the Iraq war was pushed for by the Israeli lobby in the US, Israel provided some of the bogus intelligence that led to the war. Rahm Emmanuel, furthermore, voted for the Iraq War resolution that Barack Obama voted against - the very one he made a cornerstone of his campaign.
2. He's going back on his pledge to withdraw troops from Iraq. What's the point of a campaign pledge if you don't make it happen?
3. He indicates that he wants to push yet another "Economic Stimulus" package. As if it isn't evident enough how the first economic stimulus ended up being a dismal failure, he now wants to spend more money in the futile belief that were going to someone jumpstart the economy. The economy is on its way back, you just have to leave it alone - prices are correcting, the cost of living has gone down - pretty soon things will reach bottom and we'll be headed back up. No government intervention is necessary.
4. The same faces of the past are coming back. His expected appointees are all former administration officials. Where's the change if the same people are going to be in charge?
5. He's already taken a hard-line stance on Iran, parrotting a popular line from the Bush Administration. Where's the diplomacy he talked about? Lord knows this was one of the few reasons I voted for him.
This was the reason why I supported Ron Paul - dimes to donuts you'd expect that man to implement what he believed in. Everyone else was pandering.
The world seemed to think that Obama was going to lead to change, and so I voted for him.
I erred.
So far, I have learned that he is back tracking on many of his campaign pledges and taken several moves that have shocked and pissed me off completely.
1. He appoints as his Chief of Staff a man who served in a Foreign Military, the Israeli Military. This set me over the edge, the Iraq war was pushed for by the Israeli lobby in the US, Israel provided some of the bogus intelligence that led to the war. Rahm Emmanuel, furthermore, voted for the Iraq War resolution that Barack Obama voted against - the very one he made a cornerstone of his campaign.
2. He's going back on his pledge to withdraw troops from Iraq. What's the point of a campaign pledge if you don't make it happen?
3. He indicates that he wants to push yet another "Economic Stimulus" package. As if it isn't evident enough how the first economic stimulus ended up being a dismal failure, he now wants to spend more money in the futile belief that were going to someone jumpstart the economy. The economy is on its way back, you just have to leave it alone - prices are correcting, the cost of living has gone down - pretty soon things will reach bottom and we'll be headed back up. No government intervention is necessary.
4. The same faces of the past are coming back. His expected appointees are all former administration officials. Where's the change if the same people are going to be in charge?
5. He's already taken a hard-line stance on Iran, parrotting a popular line from the Bush Administration. Where's the diplomacy he talked about? Lord knows this was one of the few reasons I voted for him.
This was the reason why I supported Ron Paul - dimes to donuts you'd expect that man to implement what he believed in. Everyone else was pandering.
Thursday, October 9, 2008
Economic Idiots
Probably the dumbest, most stupidest thing ever committed by a sitting president occured a couple weeks ago by, who other than George W. Bush.
Essentially, Bush sounded the alarm and scared the shit out of Americans and businesses regarding the economy. It wasn't that bad! Recessions are behavioral in nature - the reason why we have a credit crisis is because no one is willing to lend due to the uncertainty - add to that greater uncertainty when the President acknowledges that there's some sort of crisis. Stupid! It just added to it.
No less stupid is the fact that Paulson and Bernanke scared the hell out of Americans with their dire warnings about the fate of the economy. They shoved down everyone's throat this $700 Billion package and gave themselves superhuman powers: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. Are you fucking kidding me? Talk about absolute power - why don't we just put the crown on their heads?
The supposed cure that they set forth actually did much more damage than doing nothing. They should've kept their mouths shut and let the economy slowly roll into recession as it would have done regardless! Nay - we need to do something! The government essentially sent the a signal to the market that things were unneasy and that the markets should trust the Government to fix everything back up to the way it used to be. I don't think so!
Recessions are good. The correct for the market's excesses. We are effected by these market excesses every day - just look at Oil. Why do you think its slipped so far in such a short time? It was a market that was heavily manipulated by financial players - they used leverage (which conincidentally is no longer easily available) to jack the hell out of the price to an ungodly figure. Just to give you an idea - Oil prices peaked at the sky high price of $140/bbl. Wholesale gasoline prices rose to a peak level of $3.40/gal (no taxes included) which translates into the high prices we saw not too long ago of $4.30/gal at the pump. Do you know that the wholesale price of gasoline today is now $1.95/gal? Pretty soon we'll see gas fall under $3 at the pump! How fantastic is that?
Home prices are ridiculous. Give me a break - in order to afford a home on Long Island, half your monthly paycheck will have to go to pay your mortgage. This leaves little discretionary income for other types of economic activity - including shopping and leisure. That is ridiculous. That's not a balanced economy.
When the prices of fuel fall back down to a reasonable, appropriate level and housing costs correct itself - when people start anew, we'll have a better more vibrant economy. For god sake, all our supposed growth that we experienced in the past years was a result of housing - essentially, all our monies were being siphoned to financial institutions and real estate companies.
The bailout package is an attempt to keep housing prices high. Keep all those mortgage portfolios valued at the high prices they're at. Not going to work folks. We just wasted $700 Billion for nothing - giving financial institutions even more money. They're not compelled to loan out money now anyway. So we're still in the suppossed "Credit Crisis."
So we're facing the same consequences, with or without the Bailout package. I say bring on the recession and lets get it over with. We'll be all the better!
Essentially, Bush sounded the alarm and scared the shit out of Americans and businesses regarding the economy. It wasn't that bad! Recessions are behavioral in nature - the reason why we have a credit crisis is because no one is willing to lend due to the uncertainty - add to that greater uncertainty when the President acknowledges that there's some sort of crisis. Stupid! It just added to it.
No less stupid is the fact that Paulson and Bernanke scared the hell out of Americans with their dire warnings about the fate of the economy. They shoved down everyone's throat this $700 Billion package and gave themselves superhuman powers: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. Are you fucking kidding me? Talk about absolute power - why don't we just put the crown on their heads?
The supposed cure that they set forth actually did much more damage than doing nothing. They should've kept their mouths shut and let the economy slowly roll into recession as it would have done regardless! Nay - we need to do something! The government essentially sent the a signal to the market that things were unneasy and that the markets should trust the Government to fix everything back up to the way it used to be. I don't think so!
Recessions are good. The correct for the market's excesses. We are effected by these market excesses every day - just look at Oil. Why do you think its slipped so far in such a short time? It was a market that was heavily manipulated by financial players - they used leverage (which conincidentally is no longer easily available) to jack the hell out of the price to an ungodly figure. Just to give you an idea - Oil prices peaked at the sky high price of $140/bbl. Wholesale gasoline prices rose to a peak level of $3.40/gal (no taxes included) which translates into the high prices we saw not too long ago of $4.30/gal at the pump. Do you know that the wholesale price of gasoline today is now $1.95/gal? Pretty soon we'll see gas fall under $3 at the pump! How fantastic is that?
Home prices are ridiculous. Give me a break - in order to afford a home on Long Island, half your monthly paycheck will have to go to pay your mortgage. This leaves little discretionary income for other types of economic activity - including shopping and leisure. That is ridiculous. That's not a balanced economy.
When the prices of fuel fall back down to a reasonable, appropriate level and housing costs correct itself - when people start anew, we'll have a better more vibrant economy. For god sake, all our supposed growth that we experienced in the past years was a result of housing - essentially, all our monies were being siphoned to financial institutions and real estate companies.
The bailout package is an attempt to keep housing prices high. Keep all those mortgage portfolios valued at the high prices they're at. Not going to work folks. We just wasted $700 Billion for nothing - giving financial institutions even more money. They're not compelled to loan out money now anyway. So we're still in the suppossed "Credit Crisis."
So we're facing the same consequences, with or without the Bailout package. I say bring on the recession and lets get it over with. We'll be all the better!
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