Tag Archives: obama

Where is the skepticism?

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It’s disheartening to see how many people all over the world are just accepting the OBL story with no proof at all, purely on the word of a group of known liars. For the last decade we have heard almost nothing about Bin Laden that hasn’t come from people with zero credibility and strong motives to mislead the public.

We know nothing for sure, but based on this week’s news, it is very likely that the man is dead, if only because this group would not make its claim if there were any risk of him popping up alive. The complete lack of evidence*, lame excuses for such**, changing story***, and the incentives of the storytellers lead me to believe this is pure fabrication. He may have died years ago from kidney failure or in some other assassination scenario to keep him silent. By 2011 he had long lost his usefulness as a bogeyman, so the PR points were harvested.

That’s my opinion. Other conclusions could certainly be drawn, but they are baseless if they rely solely on statements from the US government. After all, the government is nothing but a group of self-interested individuals with very low professional ethical standards for whom lying is second nature.

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* An image of a dead OBL would not constitute proof, but the only photos from the scene so far released were purchased by Reuters from a Pakistani guard who took them 1 hour after the incident. They show three dead men and no arms other than a neon water pistol. I’m inclined to believe that they haven’t released an OBL image because a) they don’t have a real one, b) there are too many people skilled at identifying fakes, and c) the public is so credulous that they don’t need to try.

** Islamic law does not require immediate burial, just that dogs and rats don’t chew up the corpse.
As for the photo being too gory, gore doesn’t even bring an R rating anymore, and the world is used to seeing Muslim bodies mangled by the US military.

*** First OBL was firing from behind his wife and they both were killed, then he was unarmed and not hiding behind her and she was shot in the leg, then she was also reported dead. Oh, and photos show that the “million dollar mansion” or “compound” is just a crumbling, unairconditioned house like any other in this dingy town (they all have walls around the property, as is typical in that part of the world).

2011 Dividend tax increase cuts real value of S&P500 by 30%.

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The S&P 500 is currently yielding about $25.50 per share annually, about 2.3% at today’s level. Sub-3% yields are a characteristic of the bubble years. Before the 1990s an index yield under 3% was very skimpy, hardly justifying the risk of capital loss. Reduced marginal taxation of 15% (with 0% and 5% rates for low-earners) on qualified dividends (meaning on shares held more than 1 year) helped somewhat to justify lower yields, though in the rapid-turnover casino environment after 1995 dividends have hardly mattered to a stock’s performance.

Presuming that the aftermath of the credit bubble has brought a secular value restoration phase (Jim Grant’s term) and growth is missing or anemic, dividends should take greater precedence in investors’ minds. The aging of the developed world should also play a role as retirees opt for safety and income. In this environment, the denominator in the yield equation, share prices, would be expected to adjust downward regardless of any change in tax policy.

To make matters worse, when dividends are subjected again in 2011 to 39.6% federal taxation, prices would have to fall by roughly 30% to offer the same yield, assuming constant dividends. The S&P’s $25.50 yield nets $21.67 this year for a real yield of 2.0%, but to get the same net yield next year either the payout would have to increase to a record $36 or the index would have to fall to 780 (the after-tax net on $25.50 is $15.40 at 39.6%). Although forgotten lately, the stock market’s fundamental value is derived from expected income, so taxation cuts right to the bottom of any valuation estimate.

Dividend payouts remain at the same depressed levels of late 2008 and early 2009, even as earnings have regained lost ground. If and when sales take another turn downward, perhaps aided by cuts in state and local government wages and further layoffs by small businesses, margins and dividends may again come under pressure. With the 10-year treasury bond yielding over 3.25%, where’s the margin of safety in stocks? The 5-year note even yields as about much as stocks, and unlike stock dividends, treasury yields aren’t subject to state-level taxation in the US.

As of today, there are actually some remarkably good yields available from blue-chip stocks such as utilities, consumer staples and tobacco companies. Here’s a list, updated frequently. I’d keep an eye on a few of these. If stocks fall to a level where the after-tax yield looks attractive, I’d be interested in picking up a basket of these for the long-haul. At that point in the cycle the ones with low debt will be among the safest financial instruments you could ever find, since there are productive assets backing that equity — even better if you spread out the political risk across the world.

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Editorial here: Why raise these taxes (or have them at all), when the revenue derived from them is a tiny portion of the federal ledger and their imposition in all liklihood costs the government (let alone the well-being of the nation) multiples more than they generate, due to lost investment. The government blows the money — it goes down the welfare/warfare rat hole, subsidizing the worst elements at home and abroad.

So why do it? Because the people who make such decisions are either ignorant and idealogically driven (a few, such as Ivy-indoctrinated DC functionaries and academics) or just don’t give a damn about the welfare of the country (the majority). They believe that punitive taxation helps them keep office (it just sounds good to tax the “rich”), and as the balance of the western workforce shifts more and more from production to leaching as government and society age, this is ever more the case.

John Stossel on Crony Capitalism

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I’ve always liked John Stossel, a reporter who started out doing exposés on businesses as a consumer reporter in New York (and was famously hit by a pro-wrestler during an interview in the ’80s), but gradually realized that the biggest scams of course use the force of government.

He worked for ABC for ages, but was recently hired by Fox to host his own show (that makes two genuine, anti-war libertarians on Fox now, including Judge Andrew Napolitano — Beck of course is a phoney).

Here’s a clip from his new show on crony capitalism, focusing on special relationship between a “green” window manufacturer and the Obama administration:

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This kind of reporting would make Murray Rothbard proud. He knew that you can’t truly examine government policy without looking at the personal and financial lives of the politicos and businesses involved.

Budget madness: Obama proposes 17% increase over fiscal 2010

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From Bloomberg:

Feb. 1 (Bloomberg) — President Barack Obama proposes a $3.8 trillion fiscal 2011 budget today that calls for $100 billion in additional stimulus spending and projects this year’s deficit will hit a record $1.6 trillion.

The spending blueprint being sent to Congress for the fiscal year that begins Oct. 1 reflects the administration’s struggle to boost the economy and job growth — both top concerns of voters — while tightening the government’s belt to reduce deficits in the years ahead.

“We’re trying to accomplish a soft landing in terms of our fiscal trajectory,”Peter Orszag, director of the White House Office of Management and Budget, said in a briefing.

What nonsense! How on earth is the nation to benefit from further inflating the ranks of sand-in-the-gears bureaucracies?

The $1.6 trillion deficit forecast for the current year represents 10.6 percent of the U.S. gross domestic product, making it the biggest by that measure since World War II, according to administration figures. The deficit in 2009 was $1.4 trillion.

The White House deficit projection exceeds other forecasts. The Congressional Budget Office has forecast this year’s shortfall at $1.35 trillion. The median of 39 analysts survey by Bloomberg News is for $1.37 trillion this year and $1.10 trillion next year.

I am sure that the actual deficit will come in even higher, because it always does.

Spending Freeze

To address the shortfall, the administration wants to impose a three-year freeze in “discretionary” spending outside of defense and security. The freeze won’t be across-the-board. Some programs, such as education and research and development initiative, would get as much as 6 percent budget increase. The budget is subject to approval by Congress.

What kind of a spending freeze results in a 17% increase in total spending?

Obama’s plan also calls for creating a special debt commission to recommend steps to cut the deficit and tougher budgeting rules in Congress.

The result would be a deficit that declines next year to $1.27 trillion and to $828 billion in 2012, according to a summary provided by the administration. In subsequent years, though 2020, the annual deficit would still total between $700 billion and $1 trillion. By 2020, the publicly held debt would approximately double to $18.5 trillion, according to estimates.

I wonder if those projections take into account the hoardes of boomers entering retirement and running up medical bills? What GDP assumptions are in that equation  (those will be announced later this morning)? What employment assumptions? It is guaranteed that they are absurdly optimistic.

Orszag said the administration intends to slowly phase in its deficit-reduction plans, saying cutting too much too soon might stifle the economic recovery.

‘Selective’ Approach

“The worst thing we could do is act too quickly and throw the economy back into recession,” Orszag said. “But we do need to be starting, and so that’s why you see this selective approach where we are beginning the process in certain components of the budget.”

If back “act too quickly,” this Harvard genius means to cut the budget, that would be the best thing he could possibly do. Productive, accountable, efficient enterprises need this money, not the Federal government.

The increase totals 17 percent once the stimulus package is included, according to CBO estimates. The administration’s plan also calls for 120 program terminations, reductions and other savings it estimates would save $20 billion.

Wow, $0.02 trillion in savings out of a $3.8 trillion bugdet!

It would provide $33 billion in “emergency” funding this year to help pay for the administration’s troop buildup in Afghanistan. Next year, war costs would amount to $159.3 billion. The basic defense budget would amount to $549 billion, which represents a 1.8 increase adjusted for inflation. The Department of Homeland Security would get a 2 percent increase.

The budget has more than doubled from $1.9 trillion in 2001, according the OMB’s historical data.

Do you feel like you are getting twice as much value from the federal government as you were in 2001?

The US is bankrupt. That is a fact. We can’t pay all of our debts, so we should just get it over with an make an honest default. Why burden the economy for years with taxes and capital-sapping debt rollovers when in the end we’ll have to default anyway? This is like continuing to pay an underwater mortgage when you’ve lost your job and you could rent the same thing for 1/3 the cost, except that we could have a far better government for 1/20th the cost.

Start eliminating whole departments like the fascist Germany-style Department of Education, or the Soviet Russia-style Department of Housing and Urban Development. End the wars, abandon the cruel empire and stop occupying the globe (the Japanese have finally had enough of us anyway).

What cannot be sustained, won’t. If only our “leaders” would acknowledge it and do the right thing, the US could be a free and productive nation again (or better yet, group of nations).

Michael Hudson interview

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Got this from Zero Hedge, an excellent new blog.

Takeaways:

The debt must be written down.

Ancient Babylon had better economic models than our Nobel laureates.

Our politicians’ constituents are not the voters, but the bankers, who are parasites.

Obama’s economic team is the same crew that raped Russia in the ’90s and they will support an oligarchy in the US as well.

Bailout not just for mortgage debt. Paulson wants to take any “troubled assets.”

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Better brush up on your Sun Tzu and Machiavelli if you want to survive in this investment climate, because now we know what rules they are playing by.

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Jeez. I wrote the following this morning, but I thought I was months ahead, not hours, and who knew they would use US tax dollars to bail out foreign banks? That is a surprise, but they don’t call it the international banking cartel for nothing.

I wrote: “The plan is to have the government take banks’ bad mortgage debt (will they add credit card, auto, student and corporate debt?)…”

Now I find this on Bloomberg this evening:

U.S. Treasury Widens Scope of Bad-Debt Plan Beyond Mortgages

By Dawn Kopecki

Sept. 21 (Bloomberg) — The Bush administration widened the scope of its $700 billion plan to avert a financial meltdown by including assets other than mortgage-related securities.

The U.S. Treasury submitted revised guidance to Congress on its plan, referring to its proposal to purchase so-called troubled assets, a change from its original plan for investments tied to home loans, according to a document obtained by Bloomberg News and confirmed by a congressional aide.

The change suggests the inclusion of instruments such as car and student loans, credit-card debt and any other troubled asset.

Firms that are headquartered outside the U.S. will now be eligible, in another change from the guidance sent to Congress yesterday, according to the document. The size of the plan remains unchanged.

“If you must break the law, do it to seize power: in all other cases observe it.”

– Julius Caesar

They have long since crossed the Rubicon, and are playing winner take all.  Who know our bankers were such good students of history?

I can already hear the pro-Obama suckers saying, “what can you expect from the Bush administration and the Republicans? They are such fascists, always ready with a handout for their wealthy buddies.”

Well, take a look at Obama’s top donors and see if it isn’t a bunch of bankers who happen to be favoring him over the straw man from Arizona (here, here, and here). Besides, who better to enact a New Deal and get us into a really big war (Wilson, FDR, Johnson) than the Democrat wing of the ruling party?