We need healthcare reform in order to prevent the continuing spread of the vicious infection of personal and corporate bankruptcies linked to radically escalating healthcare costs, which are coinciding with a worsening deterioration in quality of coverage and quality of care. We need reform to make healthcare coverage affordable, reasonable, and undeniable. We need reform to save tens of thousands of lives per year and establish a sustainable long-term economic path, to help protect the market system and make protecting and sustaining life more cost-effective, liberating people to live the lives they dream they can.
We are watching a massive, nationwide movement of propaganda and mobilization spread one after another wild fabrication and spur sometimes violent anger about the most promising healthcare reform proposals our nation has seen. It is intolerable to stand by and watch this campaign of malicious fear-mongering sow hate and anger and derail reform in order to serve the morally bankrupt political strategy of those who want to "kill reform" for their own electoral gain.
We need to organize not just at the local level, but we need to organize nationally, set a date for a massive demonstration of support in Washington, DC, and march on Washington. The demonstration should be set for early October and we need to spend big to get the message out and treat this cause like a second inauguration. We stood in the freezing cold to support Pres. Obama and his message of transformative change, and now we have to do the same, in the midst of this firestorm of distortions and tempers, to show the true grassroots movement demanding a response is pro-reform.
Let's get moving on setting the date for a march. We can launch a group on this website and use it to plan and to mobilize support.
I've been underwhelmed by President Obama's description of "Exchanges".
He likens an exchange to what members of Congress have, a menu of different plans. This is alien to many people, and carries some implication that it is paid for by taxpayers (after all we pay for Congress' salaries and benefits).
Open Enrollment is something millions of Americans know through their workplace. It makes sense to describe an Exchange as Open Enrollment for all Americans. Instead of being something new and maybe frightening it is something you do every October, choose your insurance from the few expensive policies offered by your company - except now there will be more options and you don't have to work for a big company.
So I finally have my website up and running...its been a long road, but I am finally done with the hard part. I am most proud of the Women in politics page. This page is dedicated to the women in politics...past and present. Right now there are some posts about both. Starting next week, there will be one interview per week that highlights a different woman that is involved in politics right now, and highlights there achievements, and struggles. If you would like to see a particular woman highlighted, feel free to go to the site and email me, or respond to me here.
There is also information about current political events, video blogs, and the 2010 races...as they are right now...more content will be coming as the days go on. Looking to make this a fun and interactive website...so stop by and tell me what you think...and make sure to check back often for the new content
When I read the latest revelation, and we will hear more and more as the days go by,
I ask myself what kind of people these must be.
Taking a great nation such as this to a long ride, making us look like fools.
Are we going to allow them to get away with this ?
Finally President Obama, we ASK you to take action against these perpetrators of crima against humanity in no uncertain terms.
READ: WE NEED JUSTICE, WE CRY FOR JUSTICE in the name of those who were maltreated, raped, tortured, killed, and sodomized by animals who call themselves humans.
MORE here - at last the truth will come out.
I just wanted to post this, cuz I'm always looking for way to still have hope for real healthcare reform that will work for my children and myself...
http://finance.yahoo.com/news/Private-sector-signs-on-for-cnnm-15194800.html
I'm never sure what is going on in DC, but I can hope that we are making progress.
Thanks Dan for all the HARD work you have been doing! We will see you over the next few Monday's downtown!
-Matt
Help support education in Arizona by holding signs outside the Governor’s Education Building every Monday afternoon from 4:00-5:30 on the NW corner of Congress and Granada in downtown Tucson. United we stand, divided we fall. Stand together for those who have received a pink slip or RIF. Show support to improve the entire education environment. There are signs there, but you are welcome to bring one you made. If you need a chair, please bring your own, as well as water to drink. Thanks for helping change education for the better!! There is free parking in the garage on the west of Granada on the north side of Congress.
http://speakupnowaz.org/
http://vodpod.com/watch/1349208-lost-generation
(HPP). HPP CALLED FOR THE ANNULMENT OF THE ELECTIONS.
HAITIAN PRIORITIES PROJECT (HPP) takes this opportunity to thank all of its partners and contributors who helped achieved a careful and precise pre-election poll conducted in record time. Success was achieved despite the difficulties encountered in Haiti to produce reports in a time-sensitive manner. With the information provided to us by the people and our workers, and their respect for democratic principles in relaying and analyzing the facts as the people reported, our survey is by far the closest to the reality of the so-called elections on 19 April 2009.
In its Editorials, Jermey Scahill acuses the President of having paid Blackwater 70 Mio $.
Quote: "
Regulatory solutions for CDS:* A company cannot be covered more than 80% by CDS (as opposed to 500%)* Full disclosure for all publicly traded companies to investors (and the CEO)* If a CDS is not used as legitimate insurance to hedge against failure (i.e. a naked CDS), it cannot be bought using leveraged assets by a FDIC insured entity. It's the government's money you're risking.* If any ratings AAA for a company which is gambling on naked CDS, have the SEC prosecute
Now why 80%? It's worth noting this dilemma existed before the stock market. A boxer might be paid $100 to win a fight, but $500 by bookies to throw a fight. So actually, the boxer is better off losing and collecting the bets!
80% is about the limit to make sure it is at least better not to fail. We do have to balance between stopping ridiculous 500% coverages (i.e 5 fire insurances on one house, where it's better to burn down the house), with the legitimate uses of a CDS as insurance (how novel!). In any case, this kills the vast majority of the problem because there is a huge gap between the risks of 80% and 500%.
Background info on CDSWith a credit default swap you can own insurance on someone else's property. More significantly, you can take out multiple insurances on the same property. So you can have five parties all hoping for your house to burn down, because they will be paid on that gamble!
Traditional insurance is legitimate - health insurance for example pays out plenty when you get real sick, and everybody pays into the premium to cover the one person who is unlucky enough to need hospitalization. CDS on the other hand are pure gambles on someone else's fortunes. Several people are betting on (and hoping for) one individual to get sick.
Someone else had an excellent explanation using a Fantasy Football analogy:It's like a fantasy football league or fantasy finance. For every MBS, there was a CDS that bet on that security. Instead of there only being one Peyton Manning allowed, there could be as many as you could sell.That's why the US RMBS market is 10 trillion, but the CDS market tied to it is 28 trillion. There are 18 trillion fantasy CDS out there that aren't tied to the performance of a real mortgage. It's just paper. That's why the banks, pension funds, states, insurance companies and everyone else are failing. And the Federal government doesn't have enough money to plug the hole and they have yet to even admit the problem.
So you see, everybody could be betting on Peyton Manning, even though there is only one in real life. And for that reason, a market can be filled with trillions of dollars of bets by companies who don't have that much money to begin with. These are "naked bets" as some would say.
The only legitimate use of a CDS is to insure yourself. Or, perhaps to gamble with your own money.
Lax regulations allowed companies to hide these liabilities from even their own CEOs and investors.
Excerpts:"Top General Motors Corp. executives are more open to a speedy bankruptcy reorganization financed by the government""a reversal from GM's position late last year, when it sought a federal bailout.""the disclosure Thursday that GM's auditor has raised substantial doubt about the car maker's ability to keep going" (and recommended chaper 11 just like myself)"A bankruptcy of any sort could be far more effective than the type of out-of-court restructuring GM is undergoing" (no duh, politicians are incompetent at these decisions)"[bankruptcy] could circumvent state franchise laws that have long protected its dealers from GM's restructuring knife"Other points paraphrased* GM's executives conceded their primary objections to bankruptcy as unfounded, after "months of research"* Bankruptcy is one effective way to reduce GM's debt by effectively forgiving some of it in bankruptcy court (all using existing laws)* GM is still hoping for prepackaged bankruptcy (dictated mainly by GM), than chapter 11 (dictated by a judge). The reason is GM is still not willing to make certain tough decisions.Let's review three of the options GM has. First, GM can go through out-of-court restructuring, which is what they're still holding out hope for. While this could easily work for a healthier distressed company like Toyota or Ford, or a company willing to make deeper consessions, it will fail for GM. The basic reason why it will fail for GM is that it is cutting costs far slower than it is losing income, and this gap is widening at a staggering rate every month. They admitted today that they are about to go bankrupt again without another bailout. Of course, it doesn't help that they were already teetering before the credit crisis, and did nothing about it for years unlike Ford.Even GM's auditor's agree with me that GM should file chapter 11 bankruptcy. Why is that? First, the cost of bailing out GM at the current rate is at least $60 Billion a year, even assuming they make all the cuts they legally can. This is a generous estimate assuming GM's own financial statements haven't been cooked. Now all of the cuts GM is making come at a cost to GM's revenue, its employees, and business partners. Its investors may choose to write down some debt, but only voluntarily in a mutual agreement of compromise.By comparison, bankruptcy opens up the possiblility of seriously writing down debt and charging the costs to investors. Unlike all the other proposals that have been made by politicians, this is already the law. It's established and legitimate, and isn't theft (imagine that!). We don't invent some new law for one company or change the rules. The rules have always been that if you invest in a company that fails, you take a loss. If that company goes into bankruptcy, you will lose some or all of it. That's the risk and reward of investment and most importantly investors knew about bankruptcy when they invested so it doesn't shake market confidence. A judge decides this through due process with the utmost attention to legality and fairness.Now a compromise form of bankruptcy is prepackaged bankruptcy. GM has allowed that they may have to take that route, because they've finally conceded that out-of-court will probably fail. What a surprise. Now prepackaged bankruptcy might work for GM, but I'm highly skeptical because the one requirement is that GM and all parties agree to deep and realistic concessions. So far GM has lied, mismanaged, and outright cooked their financial forecasts to show they need far less concessions than they really need. It's not even close, and the proof is they're asking for another bailout and a new plan months after their first. Some of the other parties are even less realistic in what they think they need to concede.For those reason alone, prepackaged bankruptcy might do some good, but will lead to a second bankruptcy. When you think of it that way, maybe that's a great idea. Then GM and their parties can blame everybody else for their second failure, except themselves. Nobody leaves feeling guilty and we can all have a good laugh together five years later. Unfortunately, the main cost in that scenario is all the money GM will burn in the interim, and the fact that the second bankruptcy will shrink GM to the smallest size possible under all scenarios and end up cost more tax dollars than every other plan.Why are politicians afraid of chapter 11? The short answer is we have an election every 2 years, so short term solutions of delaying the problem are highly valued. Compared to prepackaged bankruptcy, chapter 11 will in the very short term cost more in the form of loans and court costs. The main reason for that is because prepackaged bankruptcy defers and hides true losses until later, which are always going to exceed chapter 11 by definition of containing fewer real concessions. And since prepackaged bankruptcy is a wishful thinking form of compromise, it won't solve half the deep problems possible with chapter 11. This is because Chapter 11 is the only action which keeps GM alive at the same time that it forces GM to be profitable, and it forces debt holders to write down as much as necessary! Prepackaged bankruptcy actually won't - concessions are voluntary and it will simply delay until a second failure.By analogy, it's worth noting that chapter 11 may cost more jobs in the very short term, and save a lot more jobs in the long term. The Unions won't like that, because their duty is not to save jobs in the long term. Their duty is to look busy like they're saving jobs, which always means saving jobs in the short term. I get it.The auditors also had their say, and they agree chapter 11 is the best and possibly only eventual route. It's worth noting the auditors are the only third party which is objective, has access to all of GM's inner data, and is professional trained to make this very assessment.Bottom line, chapter 11 is short term pain for longterm gain. Prepackaged bankruptcy is a first bankruptcy, followed by another. And even GM concedes out-of-court restructuring isn't working, and they have a conflict of interest in what route we take. Listen to the auditors and the experts, bankruptcy is necessary and the longer you wait the harder the cuts will be.
Now in the case that we're going to throw billions at them again, at least make them agree in writing that this is the last time and it's up to them or they've failed. Then next time, Obama can pretend to be real sorry and say to GM, Chrysler, and everyone else (AIG cough): "Aw shucks, I know you guys have it bad and I'd love to help but like we agreed last time we've bailed you out twice and it has to be up to you to turn yourself around." With it in writing, this won't even have to be a "tough decision".
If saving the industry was our priority, the best course is Chapter 11 bankruptcy. GM and Chrysler would stay in business and actually be more likely to survive from that point on compared to now. The longer they wait for bankruptcy, the harder it will be to turn them around through any means.
It's worth noting that GM and Chrysler's decline is accelerating.
Right now, the two are bleeding money and idling, unable to make necessary changes that would be trivially easy under Chapter 11. For example GM is bleeding money because of too many dealerships (i.e. salesmen) but can't scale them back for a number of reasons including state franchising laws. Chrysler is in worse shape than GM, and it's either bankruptcy or disappearing off the face of this earth. I prefer the former.
Of course, politicians and people who aren't familiar with bankruptcy hate the B word, especially because it means GM and Chrysler can more easily close unprofitable businesses (i.e. some job losses) and cut through red tape in state laws (i.e. some loss of state income). There's plenty of other objections hardcore Democrats will have too. Of course, the biggest factor stopping chapter 11 is we have to admit GM and Chrysler have failed - the same dilemma with Iraq!
But that's okay since it will happen anyways. The only thing politicians might influence is whether GM and Chrysler go bankrupt now, or later when it may be too late. So far they've been influencing for the latter.
Now about the stimulus, even Obama knows 3 million is not accurate accounting. This is a marketing slogan that tries to count almost everyone who gets paid anything as a job saved. Every President does this, and I understand where he's coming from.
For that same reason, 1 million jobs are not being saved by the auto bailout. In fact, jobs are being permanently lost because we're letting GM and Chrysler bleed money and ambition rather than save them through bankruptcy. We're only holding out for the false hope that they won't need bankruptcy at all. That's the only scenario where even a single job would be saved by periodic bailouts.
Now chapter 11 does cost billions of dollars in backing, but it's ironically cheaper than bailouts every three to six months. I predicted at the end of last year that GM and Chrysler would be back every three to six months for more money, and so far that's been true. Over the years if we keep handing them money, the bill will come out to at least $100 Billion because of their massive debt and money burn.
Now the fact that we may have to go chapter 11 is certainly awful. But a lot better than the notion of handing out money until it runs out and these two companies are beyond hope.
This is a "tough decision", but what would you choose? Without bankruptcy these two companies are not going to survive the Obama administration anyways.
This is a graph of the current bear market vs. the First Great Depression, 73 oil crash, Dot-Com crash:
http://dshort.com/charts/bears/four-bears-large.gif
As we currently stand, we are at the same level as the First Great Depression was 16 1/2 months into its crash - a drop of 55%. Notice how at exactly this time during the FGD, the stock market rallied by 10% (5% relative to peak). Then it continued to crash for the the next 17 months, making it a 34 month stock market crash. These peaks are known as false rallies and don't change the final result.
People have plenty of money to invest. They are choosing to uninvest and there is nothing anyone can do about it because this is a bubble pop. What the government could do, is burn money trying. Good luck!
Speaking of burning money, I noted just before the election last year that AIG, GM, and Chrysler will be back for billions more. To update that, I repeat that prediction for 3-6 months from now if the government follows through with their demands. They'll be asking for money a third time. That is why I urge Obama not to follow through, because with two handouts he'll end up looking worse than Bush and have no excuse next time. I'm hopeful but doubtful.
Another easy prediction is that Citi and Bank of America will be exposed as insolvent within the next few months. They'll either get new infusions turning them into zombie banks (insolvent banks with de facto government backing), be seized by the FDIC, or be bought up by another bank in a government brokered transaction. BAC's biggest mistake was buying Countrywide, which was worth at least negative $30 Billion. Notice that Bank of America's market cap is $18 Billion and dropping about $3 Billion a day.
All I ask is that Obama give Warren Buffet a call and get his opinion on the future. He'll simply tell Obama exactly what he already wrote in his recent address, because the longterm solutions are pretty clear. You cannot spend your way out of this mess, and the worst thing you can do is get failed banks addicted to bailouts.
The original graphs are not meant to predict the S&P future. Rather, they refute the significance of a 2% rally like today, or even a 10% or 20% rally next month. The comparison to the FGD is only to emphasize the severity of declines for those who aren't aware.
You may not be aware, but last week billions in Citi preferred share were converted into common shares at a steep discount. That makes it a bailout. When you give someone a multi-billion dollar loan and then forgive most of it months later, that's free money. This is now a realized loss, not a paper loss or a loan we might recoup. I know this is a recent development, so I understand many people may not be aware of this.
AIG is insolvent, and their chance of further default exceeds the yield we've charged them. That's also a bailout, though at a smaller margin. Recent developments show they will default about every three to six months without a new infusion of cash.
Telling banks they will be nationalized if they don't turn around isn't a threat. That's like saying if you don't pay your rent we'll replace your landlord.
TARP is a reward for failure as Buffet's letter spelled out. More significantly, if used longterm (as opposed to short term), it undermines the economy by making all other businesses less profitable or unprofitable. You may disagree with Buffet's conventional wisdom, but this is plainly obvious to fiscal conservatives. What matters is if this is a one time short term solution, or long term policy. Bush was lucky he didn't have to stick around for that test.
For a laymen example, right before Wamu failed they were offering CDs at 5% when everyone else offered 4% and under. They knew FDIC would bail them out if they spent their way to death, so they weren't even risking their own money anymore. As a result, they could outcompete all other banks for a brief period of time. That was just a 1% spread over a few months on one narrow market. Imagine a 2% or higher spread over years by several mega banks against the rest of the economy. They're borrowing at about .5% right now, can you compete with that?
Bottom line, the solution is simple. To save face, Obama can pretend to be real sorry and say to AIG, GM, Chrysler "Aw shucks, I know you guys have it bad and I'd love to help but like we agreed last time we've bailed you out twice and it has to be up to you to turn yourself around." If we're going to throw billions at them again, at least make them agree in writing that this is the last time and it's up to them or they've failed. But Obama has shown he's not yet ready to make "tough decisions", maybe later. I can't blame him.
Obama has done so much right in so little time. The economy however is a giant elephant we're still working on, until the day we make "tough decisions". I'm sure over time Obama will recognize what isn't working, and that's why we voted for him instead of "stay the course" McCain.
Full letter from Buffet here: http://www.berkshirehathaway.com/letters/2008ltr.pdf Quoted from page 10:Why the housing bubble happenedBuffet: At that time, much of the [mortgage] industry employed sales practices that were atrocious. Writing about the period somewhat later, I described it as involving “borrowers who shouldn’t have borrowed being financed by lenders who shouldn’t have lent.” To begin with, the need for meaningful down payments was frequently ignored. Sometimes fakery was involved. (“That certainly looks like a $2,000 cat to me” says the salesman who will receive a $3,000 commission if the loan goes through.) Moreover, impossible-to-meet monthly payments were being agreed to by borrowers who signed up because they had nothing to lose. The resulting mortgages were usually packaged (“securitized”) and sold by Wall Street firms to unsuspecting investors. This chain of folly had to end badly, and it did.
The government is rewarding bad banks and punishing honest businessHere Buffettalks about Clayton, a subsidiary of Berkshire: Buffet: [Berkshire]..though not damaged by the performance of its borrowers, is nevertheless threatened by an element of the credit crisis. Funders that have access to any sort of government guarantee – banks with FDIC-insured deposits, large entities with commercial paper now backed by the Federal Reserve, and others who are using imaginative methods (or lobbying skills) to come under the government’s umbrella – have money costs that are minimal. Conversely, highly-rated companies, such as Berkshire, are experiencing borrowing costs that, in relation to Treasury rates, are at record levels. Moreover, funds are abundant for the government-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.
This unprecedented “spread” in the cost of money makes it unprofitable for any lender who doesn’tenjoy government-guaranteed funds to go up against those with a favored status. Government is determining the “haves” and “have-nots.” That is why companies are rushing to convert to bank holding companies, not a course feasible for Berkshire.
Though Berkshire’s credit is pristine – we are one of only seven AAA corporations in the country – our cost of borrowing is now far higher than competitors with shaky balance sheets but government backing. At the moment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one.
ConclusionBottom line, legacy Bush and Fed policies are putting honest businesses out of business and replacing them with hand picked government backed banks - the very ones who caused this mess. I know this is a big ship to turn, but this is the wrong course to continue.
Finally, Buffet also emphasizes the need to eventually wean the economy from dependence on subsidies, and that the problem comes down to bad decisions by banks and borrowers who put 0% down or lied on their loans. The solution is to help everybody else, not throw tax money at deadbeats and their banks. The problem with handouts is they're going to demand more money every 3 months and that's where we're at.
Buffet and a number of economists are calling for reason and a sensible way forward. We've done the bailouts, and from this point on we need to be scaling that back to alternative ways forward.
I read with interest following article on the gulf news. No doubt that Republicans have found their meagre voices again. Slamming, distorting President Obama's economic agenda.
Best of all, Sen. McCain, still recovering from his hangover. As an old shark in politics, he will continue to oppose President Obama s agendas, no matter what, with the vague hope of winning the next election.
Wondering if McCain is familiar with web 2.0 ?
Quote from Gulf Times: (Part 1)
"Republican legislators slammed President Barack Obama’s economic agenda on Friday for mimicking the ideals of socialist European governments, one day after the president revealed his $3.6tn budget for 2010. At a conservative policy gathering in Washington, lawmakers repeatedly attacked Obama for planning a massive uptick in spending on energy, education, healthcare and other programmes. “Pushing back these efforts to basically Europeanise America will not be easy,” Mitch McConnell, the top Republican in the Senate, told the Conservative Political Action Conference. Obama on Thursday released the outline of his 2010 budget and priorities over the next 10 years. It includes a more than $600bn downpayment on healthcare reform and $15bn per year for renewable energy investments. Obama’s budget would increase the federal deficit in 2009 to $1.75tn in 2009 - 12.6% of gross domestic product - and $1.2tn in 2010. The administration believes it can trim the deficit back to $533bn by 2013, once the US economy pulls itself out of a deep recession. The 2010 budget faces a bruising battle over the coming months in Congress. “Americans have gotten a glimpse of the big government plans of Obama and the Democrats and millions are ready to stand up, speak out, and yes, even take to the streets to stop America’s slide into socialism,” South Carolina Senator Jim DeMint told the gathering of conservative activists from around the country. Socialism has long held negative connotations in the US as a representation of leftist ideals that go against the US free- market tradition. That US tradition, by contrast, has come under heavy fire in Europe in recent months amid a massive financial crisis, which has spread around the globe and is largely blamed on the kind of free- wheeling, underregulated capitalism practiced on Wall Street. The financial crisis has sparked concerns about another idea that strikes fear in the hearts of many politicians and voters in the US: nationalisation. Wall Street stocks tanked last week when one Democratic senator, Christopher Dodd, suggested nationalising banks may be the only option to stave off a devastating wave of bankruptcies. Ever since, the Obama administration has repeatedly insisted it has no such plans. The Republican criticisms this week harked back to a common theme through much of the 2008 presidential campaign. Republican contender John McCain jumped on Obama’s comments in October that he planned to “spread the wealth” by raising taxes on the wealthiest workers, which was itself a feature of Obama’s budget outline on Thursday. “At least in Europe, the socialist leaders who so admire my opponent are upfront about their objectives,” McCain said in one radio address in October. Republicans also focused their criticism this week on a plan to help reduce global warming-causing emissions by forcing companies to pay for their pollutants. Obama included revenues from the contentious plan, which already exists in Europe, in his budget projections. The administration hopes it will help cut (MORINGA-AFRICASAIEURO) greenhouse-gas emissions 80% by 2050. The climate legislation was strongly opposed by former president George W Bush and rejected by Congress last year. A revived effort against the measure is being fought by Republican legislators worried about its potential to harm the economy and cost jobs."
Heinz Rainer
President Barack Obama you were perfect in the delivery and content of your speech on the 24th of Feb, 09. You are doing the best job anyone could ask for. You and your team have developed a very good plan to get us out of the financial mess we are in. And you have explained your plan and intentions to the fullest. No other President has been so open in the explanation of the plans for our country. I believe you will be successful in achieving the goals you have made for the improvements we need in this country. Mostly because it's a good plan but also because when you put your mind, heart and soul into something your level of success rates go up. And I can see that you believe what you are telling us and together we will fix the nation. Thank You for being who you are. Thank You for the HOPE you have given us all. Thank You for the wise decisions you have made for the betterment of our nation. Just Thank You, President Barack Obama I will pray for you, your family and your cabinet to be safe, make future good choices and to be successful.
