Believe me, while I have rested my keyboard-weary fingers for a few months, my mind has been going full-speed-ahead.  I have watched my stock portfolio take a hit that is reminiscent of 2008 (I cringed when I got my statement today), Congress has proven yet again their unworthiness to govern and President Obama  has demonstrated to all sensible  Americans that he is  as American born and Christian (he professes) as the next  who only attends church on Easter and for funerals.  The economy is souring with unemployment still (20 months into this recession) the #1 problem.

But wait, there is more.  Iraq is no longer a combat zone for Americans (pity the Iraqi’s though), Afghanistan is ballooning into a Vietnam and a Korea all balled up into one awful nightmare, and the Mid-East situation is no better at all (despite the opening of Obama’s direct talks with Palestinians and Israelis) as the threat of Iranian nukes hovers ominously.

Hold on!  If you keep on reading you will get even more from CapitalistMarks in the coming days.  Health care reform is proving to be the opposite of the wonderful promises made  (Regence Blue Cross/Blue Shield of Utah has cancelled my policy and forced me to take another with significantly less coverage/benefits coupled with added costs that could easily be in the tens of thousands of $$ each year).  I am told there are a bunch more like me out there that won’t be helped at all until at least 2014 when the new Obamacare/Democratcare plan kicks in.  But will I (others) live that long with reduced coverage and costs that exceed average American family incomes?

Bailout spending?  Sure a few big banks have survived and some large Corps.  too . . . but only to the benefit of the CEOs and a few of their croonies . . . surely not you and I . . . the ‘head-shaking’ shareholders or the stunned taxpayers.

Stimulus?  Cost billions more than we were told originally and now Obama and his minions are talking about adding a few dozen more billions.  And, the Federal Reserve is out of arrows with interest rates at about zero (of course they have quantitative easing left . . . but by the Fed buying up government notes all they do is add to the already enormous deficit).

Fiscal Policy?  Don’t look for any help there in an election year.  Everyone in the country knows that the tax system needs to be reinvented.  But, don’t expect any politicians to offer  any credible solution.

Remember the old sage who said (roughly) ‘when 51% of the poor decide they want to live off the honest earnings of the other 49% then democracy will fail’ . . . and Obama’s democratic solutions of socialism at it’s worst are beginning to make that a possibility.  Wouldn’t it be something if he really is a Muslim or Communist ’sleeper’ who ends America’s greatness by destroying our economic/political system with old fashioned Marxist policies?  NOTE:  I am not saying that is true but Geeze Louise . . .

China?  Passed Germany as the #2 economy in the world and is only 30 or so more years of double digit GDP growth from passing the U.S.  Oh, yeah, don’t forget their military is growing faster and more aggressively than any other in the world, nor their efforts to grab natural resources from the rest of the world for their own good (sounds pretty capitalist to me).  Note that the ‘rare earth’ minerals used in so many high-tech products are produced primarily in China’s two mining centers, and that the costs of these crucial minerals have gone up over 1000% (yep, one thousand) in the last 10 years or so.

Iran?  I can’t even bear to talk about it.  Ahmadinejad is nuts!

Venezuela?  Run by a lunatic dictator.

Housing?  Millions of homes in foreclosure and the banks aren’t bending over to help anyone despite new federal laws requiring them to do so  (wait until those writeoffs hit the books!).

Unemployment?  Some estimated put actual #’s as high as 20+% when underemployed and work-force abandoners are included but regardless there are at least 25 million Americans who want full-time jobs.

Global warming?  Only the HOTTEST summer in history for our northern hemisphere.

I could go on but my moist, warm tears are clouding my eyes so much as I return.

All I can say is it behooves you to stay tuned to this channel.

I will tell it like it is–give my answers to tough questions–offer solutions where needed.  I will be right-on most of the time and never wavering in pursuit of truth and justice.

But,remember this always:  the single biggest problem America has today is professional politicians.  They call D.C. home and they love living there and partaking of their unAmerican perks.  The new byword is ‘if you don’t like thier perks, get rid of the jerks.’

Do NOT vote for incumbents . . . we need citizen leaders who leave their real lives to serve for 4-8 years and then go back to those same lives.  Guys like you and I who can listen to both sides consider the alternatives and decide what is really best for our country.   Our founding fathers depended on it.  We really have to now.  Oh, and eliminate the golden retirements and benefits for congress and government employees.  Make them live like the rest of us ./ . . they won’t want to stick around more than they are welcome if we can push that through.

I hope you will join me at the polls in November to oust these greedy, self-serving ‘pros’ and vote in our neighbors and friends (particularly those who promise to go home after one or two terms).

I will post when impressed to do so and not just in order to get another word in.  You can count on that.  Also, due to some lingering and worsening health issues, I may not post as regularly as I would like.  I promise though, every post will be important, current, relevant and helpful.

How can this be?

Too many times in the past unemployment has prolonged a recession and this time we are experiencing the worst unemployment since WWII.  That is the primary reason to be dubious.

However, since the administration, as well as the Federal Reserve’s own Ben Bernanke, is touting their imagined upswing in economic growth we are faced with a real dilemma (or conundrum).

These hard choices are ahead:

Should Obama proceed with the third stimulus that has been bounced through the media recently?

Should the FED raise interest rates?

Should we just keep plugging along and hope all will be well?

The answer to all three of these questions is a resounding NO!

We do not need a third stimulus that is intended primarily to influence voters by extending the time an unemployed person can draw Unemployment Compensation.

We absolutely should not raise interest rates (despite the ever-present specter of inflation) until the recession is over for most of the 10 to 15 million homes with unemployed adults.

And we sure as heck can’t go on the way things are now.

Presaging all of these difficult decisions is the incredible deficit spending that looms for years, if not decades, ahead.  Now we know that last year’s deficit (fiscal year ended September 30 2009) was $1.4 trillion . . . as compared to the previous year’s (2008) $544 billion.  Yikes!  Nearly three times the previous awful record high set in 2008 by Bush’s administration.

There seems no end to the bassackwards budget our wonderful (primarily incumbent) congress has planned for us.

We know they can’t continue this way and presumably they do too.

After all, who is going to buy our debt when interest payments become more than 10% of the ENTIRE government budget for the year.  Although only $191 billion last year it could easily exceed $1 trillion soon if interest rates increase significantly.China won’t.  Neither will any other fiscally responsible government.

Further, with the diminished economy and subsequent reduced economic output, unemployment and business contraction, tax receipts are way down as well.

Hence the conundrum.

To change the terrible deficit forecast two things must happen –  though not both at once necessarily.  Taxes will have to be increased.  The FED will have to raise interest rates.

Neither of these are a good thing for consumers or small business.  Hence neither of these are a good thing for the employment crisis.

Yet, the deficit looms.

So what happens now?

Though I have promised not to complain without offering a solution, I can only say that this problem is one I simply don’t know how to handle in an assured way.  But I think I understand enough to offer the best approach (better than ANY I have heard from the vicinity of Washington, D.C..

What comes first?

We have to deal with unemployment by diverting the balance of the second stimulus (about $400 billion is left to spend) to jobs creation — public projects, infrastructure, housing incentives and such.  Things that will create jobs quickly.  Not rocket science dudes.

What’s next?

Raise interest rates to a reasonable level — probably 5% or so for the FED benchmark that affects interbank borrowing and hence the prime rate.  But, ONLY when unemployment drops a point or two below the 8% level promised by Obama when he was pusing the 2nd stimulus upon us.

Finally?

Implement the inevitable tax increase but do it with a totally revamped tax system.  One like that which I have previously suggested (see here).  Fair and balanced and equitable to all!

This entire process will probably take 2-4 years but do not doubt that something has to be done and the above proposal should handle the problems correctly.

You must be asking yourself how do we ‘the people’ get this done?

Start by sending this message to your congressmen(women) immediately.  Then followup by letting them know that you have no intention of voting for incumbents unless they do the ‘will of the people.’

There is a secret here too, and please don’t send this to your congressmen(women). 

We the people don’t intend to vote for incumbents anyway!!  Not until congress passes a law that implements term limits on ALL elected officials so that they don’t keep creating ways to keep themselves in office — they are to serve us, not the other way around.

Thank you and have a wonderful day!

thanks to secretlondon123 for the photo at flickr

How about soon??

My bold prediction (see blog of feb 13) was intended to document my belief that our markets (stock) had about bottomed out.??I said that the next week would begin a real rise in prices (stock).? But, and here I ask for some lenience — or at least some sympathy, the one week predicition was not as significant as the prediction about where markets would be in a few months or at the end of the year.

Our talking heads in Washington are all we need to stiffle any progress.? All they have to do is open their mouths (the image here should be Pandora’s box) and we all know what comes out.? Nothing good, most of the time.? Our cheer leaders have become ‘boo birds’ and that doesn’t help anything.?

Today we hear that comsumer confidence is at an alltime low.? In the 20’s!? No wonder.? Obama and his minions have nothing good to say . . . ever!? And if we hear it from them (the collective we) then we believe it and boom– down go the markets, real-estate values, paychecks, confidence, emotions . . . .

BUT . . .?I stick with my longer term predictions and I’ll tell you why.? Confidence is at an all time low.? The markets (as measured by the dow and s&p) are at levels we haven’t seen since 1997.? Unemployment is at 7.6% and climbing.? Advertising rates are way off.? Retail sales are plummeting.? Oil is way low compared to a year ago, but gas prices are not so low.??I could go on.? There is NO reason to be positive.

Except.? this is AMERICA.? When things get bad, we get together.? When things are worse, we look around and do what we can to help.?

Take a conversation?I overheard the other day.??A nieghbor who has lost his job has been frustrated in his search for a new one.? During a conversation,?I heard first one other neighbor, and then yet another, offer some encouragement and even some suggestions as to where the unemployed guy could look.? Then, yet another guy joined in and said that his company had an opening and promised to arrange an interview (which by the way he did).? Now, this is no fairy tale with a beautiful princess or handsome prince at the end.? It is just real life in AMERICA.? Turns out the job was only temporary and at a much lower wage than expected . . . but (and here is the great AMERICA part) if the guy did a good job then he would probably get offered a?fulltime thing at a much higher wage.?

AMERICA — where people start humbly, prove themselves and move on to bigger and better things (and get a lot of help from freinds and neighbors along the way).

That is why my bold prediction stands.? Maybe not for last week in the market (‘cuz it was ugly I tell you) but still for the mid and long term.? go back and read it.??I may have been off on the short term by a week or two or so . . . but the rest stands.?

Don’t complain until the longer part has played out.?

I’m still confident.?

I’ve put my money where why words are.?

Come this summer, I’ll be right, just wait and see (if not I’ll be the one looking for help from my neighbors . . . and you know why I’m not worried sick?? I’ll get that help . . . that is what makes us great–that is why confidence will start to improve etc. etc. etc).

Bank on it!?

Just don’t bank with CITI, BofA, Wells Fargo or until the FED gives them some more of my (and your) money . . . that is a blog for another day.

Waiting for your?comments, just not earlier than June for any of the negative type!

Frankly his speech on the new bank and financial bailout?plan (you know the . . .?the rest of the $700?billion TARP)?was one of the worst ever by a Treasury official.? Geithner (until recently the head of the NY Fed) makes Paulson?seem like superman!

After more than a week of hype all we get was:? ‘we’re gonna do a little of this and a little of that and it will cost a couple of TRILLION $$$ more and it may or may not work and we don’t know exactly what we’re gonna do and it may change but we will try and it will involve government and private sector and you may not like what you hear but it is what it is and i’m coverin’ my bases ‘cuz if it fails i still want my big government pension and . . . . .”?

Oh my gosh!? Can’t he give us even a tiny bone to chew on?

You get the idea.

the Treasury Secretary has got to have his head messed up to give such drivel to the public, the markets, the congress, the press.? After all the work you’ve done Timothy you can’t come up with something concrete?? Why talk at all??

Don’t schedule a press conference days in advance and promote it with all kinds of ridiculous hype, if you don’t have some of the right questions let alone any of the right answers!? We deserve better.??I demand better.? Obama you made a mistake here and you had better start doing something to correct it.? This guy is worse than Daschle.

Think about this.? Geithner was, afterall, part of the wonderful solution worked out in the last months of the prior administration.? You know, the solution that did such a great job with AIG, Lehmans Brothers, fannie and freddie.? Teah, those were winners and sure helped improve the situation.??Now this?

Give me a break.??I only have a Bachelors degree in economics (albeit with a MBA kicker to help undo the damamge of too much econ theory) and though I’ve only taught macro-econ one semester in college–yet,?even?I see the stupidity of talking about nothing when the nation is in crisis.?

Give us SOMETHING!!? What did he do with his Phd. in Economics?? Maybe it was from one of those mail-in schools — you know –? the University of Whats’it.? .? 47 years old and?I don’t think he has really worked for anyone other than the government!!? Maybe we need term limits for bureaucrats as well as for elected officials.? YOU JUST CAN”T WORK FOR THE GOVERMENT YOUR WHOLE LIFE AND STILL HAVE A CLUE ABOUT LIFE IN THE REAL WORLD!!!!? Does he shop at Walmart like most of the rest of us have to now?

My dad told me not to criticize unless?I had a better idea.? well?I do!!? Stop bailing out the financial institutions and the immoral ceo’s.? Let a few of them fail (maybe even more than?a few).? Force?a whole bunch?more to get new management (guys with a clue and some basic honesty).? Let the stuff fall where it may and then start over.? Bear Stearns vs Lehman Brothers . . .? yeah the Fed and Treasury got that one right and that gives us confidence going forward.? Aahhuh.? and I’ve got?some land in Florida I’d like to sell you –? cheap (but cash only, please).?

What is the saying : a pig with lipstick is still a pig?? Did?I get it right.?

This one doesn’t even have the lipstick and it sure as heck can’t fly.?

Dang ugly to look at let alone listen too.?

Strike one timothy.? By the way?here comes the next pitch!? And this one better fly!

?

tahks to jere-me of flickr for the photo