Risk Opportunity Lost Under Dependency

Most Americans are on the road to serfdom, and they don't even know it.

The young folks who think the system is screwing them are turning in large measure to Bernie Sanders, but his brand of socialism is sure to box them in, squelching the opportunity to risk, or bet on themselves, effectively ending their dreams, if they have them, of becoming independently wealthy and free.

The ramifications of the progressive march over the past decade, with orchestrated efforts to discredit churches, private companies, agencies and organizations while creating divisions between classes through race, gender and economic status, has resulted in the Millennials embracing of big government rather than free market capitalism.

Therefore, sadly, the position taken by the Millennials would certainly be considered reasonable. It is all they know. The economic systems are in large measure broken, full of manipulation and corruption, but the answer is not expansive government or a kingmaker.

The answer is free market capitalism, the best path to prosperity, liberty and freedom.


Why The Masses Remain Poor by EconMatters.com

Cash is King

Recently, trial balloons regarding the move to a cashless society have been appearing in various media outlets.  Among those who champion this effort are Bill Gates, an elite progressive who along with his colleagues conclude that the ruling class can make your decisions better than you can, given their elite intellect.

While a cashless society seems pretty cool and reasonable on many fronts, including efficiency, the effort to push the idea is not by accident, and should be considered yet another clandestine effort to seize additional control over the citizenry.

In the aftermath of the housing bubble crash of 2008-09, which decimated wealth and left the economy staggering, President Obama and his team, in concert with the FED, made incorrect decisions that are cascading negatively behind the scenes.

The stock market has almost tripled since '09, which is good news; unless you note the money supply is up over 5 fold during that time making your investment worth less. Legalized theft. So, all the big banks got bailed out, but who bailed you out?  Nobody.

The slate is indeed about to be wiped clean, and arenas to hide in are very limited, and the collective damage could knockout the US economy,  which would likely have a nasty ripple effect globally.  Would the IMF step up to bail the FED out, and what price would US sovereignty pay for such action?

Or will you bail the US out?

In 2013, the Cyprus government took, or stole, approximately 10 percent of cash deposits from its citizenry without consent as a described "bail-in" to help the crumbling economy gain solvency.  Should the United States suffer an unprecedented crash, don't think for a moment it could not happen here.  It would be much easier for the government to seize cash in a digital economy than to confiscate cash from the citizenry.

But that is not all.

Have you ever had a credit card cancelled, or had your available charge amount decreased?  In a cashless society, just so to limit risk on potential defaults, your purchases may be declined by the ruling class who deem you incapable of making correct low risk purchases.

With the government in charge of health care, items in your grocery cart may be declined for purchase because they do not fit the dietary regime you have been placed on by the food police.  No chocolate cookies for you!

2015 V8 Chevy Camaro

That new 6.2L 426-horsepower V8 Chevrolet Camaro you have been saving for simply does not meet the common guidelines for fuel mileage and is deemed a threat to the governmental efforts in combating global climate change; therefore, that purchase will not be granted through your bank. And cash is not legally accepted.

The list could go on, and on, and on.

While progressives make the push for a cashless society to become a reality, many are aware of the ominous threat to our freedom it really is.  Martin Armstrong, over at his Armstrong Economics blog, has an in-depth and outstanding piece where he discusses The New Age of Economic Totalitarianism.

Signature Bank Chairman Scott Shay was recently on CNBC discussing this topic, and wrote an essay noting the wide ranging threat to our freedom a cashless society is. As noted in the excellent piece attached, it would be most wise to keep your hand invisible to an oppressive and untrustworthy government.

"This would be the ultimate form of control. Because – without access to money – people couldn’t resist, couldn’t hide and couldn’t escape".

Forget going off the grid with any measurable success.

While a cashless society may ring logical to many, for those who embrace freedom, cash should always remain the base of financial operation in free markets eliminating potential manipulation.

After all, cash is king!

Decisions of Risk

Bo Pelini
Photo/ngngsports.com

Nebraska has lost yet another game which is deemed unacceptable.  There is a tradition of winning, competitiveness and sportsmanship around this program, which seems to be sifting from the grasp of the current coaching staff.

I had previously written that Bo Pelini would need to win out after the Minnesota road loss to save his job, and he did not.

The Husker fan base suffers a major divide on whether Pelini should be retained, and the media, most notably some of the Omaha World Herald staff, some Omaha radio personalities who are also playing favorites in this case and former Husker great Tommie Frazier.

Bleacher Report compiled a list of the pros and cons regarding his status.

I must admit I am very conflicted on this. I could do a punt counter punt all day long.

On the positive side of the ledger, the players love Bo and he does many things well. The program is clean, the academics are good and not withstanding the losses, there have been more wins.  In addition, the team is young and the future appears bright.

On the negative side, first of all firing him would be a huge financial blow to UNL in poor economic conditions. The injuries, particularly to Martinez, were significant in 2013. The most fundamental principle of the game, protecting the football, remains elusive under Bo.  As a defensive guru, there are mind boggling glaring issues with respect to formation, physicality and adjustments that are present.

Pelini stated he was comfortable with what his staff has accomplished, but I can assure you I am not only uncomfortable, but embarrassed, by getting whipped by the likes of Minnesota and Iowa, another home loss. 

At the end of the day, I would have him continue as coach at this time, but would need newly established goals to be met moving forward. There is quite a bit of young talent on the squad. An announcement one way or the other should come promptly, for the uncertainty is significantly damaging recruiting.

It did, as AD Shawn Eichorst released a statement which said Pelini would continue as coach.

There is a strong element of the fan base that is horrified at this decision.  Tom Shatel at The Omaha World Herald comments, and Mitch Sheman, at ESPN, formerly with the OWH and not a Pelini fan, did a piece at ESPN.com.

Ohters, think Eichorst was not clear, and that Pelini is still going to be terminated.

After the Eichorst statement, Pelini released a statement of thanks and apology.

The bowl game will present an opportunity for the future for Pelini and his relationship with this university, and 2014 will be a season where measurable gains, from conduct on the field to performance on it, will need to be obtained. 

We will all be watching.

Obama Transcript of Failure or Compliance

Short on time with September 11 approaching, time for a worthy piece of reflection on our National Day of Mourning did not exist.  Instead, with the addition of a few sentences, I reposted my post from a year ago.

To be clear, the significance of that day still burns hot in my mind, as does my trip in early December 2001 to ground zero.  For me, and I am sure you, it is personal.

On the blog Facebook page, time was found to forward and comment on an a Reuters piece detailing how President Obama did not have time to grant a requested meeting with Israeli Prime Minister Benjamin Netanyahu due to a lack of scheduling opportunities.  Obama does have a tight schedule, campaigning hard in states the media proclaims he is safe in, with an appearance on David Letterman and a pow wow with rap star Pimp the Limp, whoever that may be.

On September 11 of all days, we thought the President should note that freedom will be defended in all ways legally permissible, from all enemies foreign, and domestic.

Meanwhile, it has been tough sledding for Netanyahu in dealing with Obama, who clearly has a strong disdain for both him personally and Israel itself.  A recent trip did not go well by all accounts, and with Israel in great peril due to the pursuit of nuclear weapons by Iran, Obama's concern for Israel is limited, although he has expressed some strategic influence as you may suspect.

Neatanhayu in recent trip to the White House/Photo Christina Fitzgerald

The middle east is a powder keg, with those who wish us harm emboldened by Obama, who they see as weak and somewhat accommodating to their plight.  Although Obama loves playing war games directing drone attacks, and several who had it coming to them got it, Obama is warm to the Muslim Brotherhood and desires America to be taken down a few notches, inclusive of wealth redistribution, as so thoroughly covered by Dinesh D'Souza in the movie 2016: Obama's America.

On the anniversary of the worst terrorist attacks ever perpetrated on America, no accident to be sure, in what the administration felt were protests due to an anti-Islamic movie someone posted on YouTube, coordinated attacks on our embassy in Cairo, Egypt and our consulate in Benghazi, Libya took the life our ambassador and three others.  For those on the golf course, this is an act of war.

These attacks were preceded by an official statement from our government offering an apology for individuals who are not up to speed on the warm fuzzy feelings the administration has for Muslim extremists.  Apologies and appeasement are not only going to fail to achieve anything, they will make things much worse.

The Muslim Brotherhood is now fully in charge in Egypt, and the Muslim Brotherhood is anti-Israel and no friend of the United States.  While Obama found it intoxicating to assist in taking our a pair of dictators in these countries, no apparent thought to the vacuum left behind was engaged.  It was not difficult to forecast the events that have transpired, and our leading from behind President has no answers to escalating violence in the region.

It is very hard to imagine anyone making Jimmy Carter look like Dwight Eisenhower, but Obama is giving it the college try, and we have a copy of these transcripts.  These events have that 1979 feel to it, and come to think of it, so do the issues with petroleum.

Then again, since D'Souza is correct, these events of a weakening US and the rise of Islamic nations may likely be the objective of Obama.  Certainly, the policies of weakness and appeasement and partnership with Islamic radicals are void of common sense, enhances their efforts and exponentially increases our risk, not to mention the place Israel find it self in.

For those of us against Islamic terrorists, we must get a change in leadership at first opportunity.  This change is imperative in our effort to protect and defend our freedoms and preserve the United States as a superpower in the world. 

As Sarah Palin said, "Since President Obama likes to “speak softly” to our enemies. If he doesn’t have a “big stick” to carry, maybe it’s time for him to grow one".  Obama will not, so we the American people, will have to act. 

Our first, and seemingly only, opportunity, is on November 6.   Freedom is at stake.

Idiots At Large

President Obama tells us that there is a clear choice in our upcoming election.

Boy howdy, he is not kidding.

Since the mainstream media will not do their job, concerned citizens embark on the task themselves. Enter Peter Schiff, CEO and Chief Investment Officer of Euro Pacific Capital, who got to know some of the delegates and guest at the Democratic National Convention.

Grab a chair, and get a load of this:




If these folks were in charge, we would hit the wall economically in short order.  They are, and we have.

The level of stupidity by these folks on how commerce and free markets operate is simply stunning.

For example, corporations are indeed people.

In fact, just earlier this morning, I collected a portion of a rental obligation owed me for the month of September. Legally, since all the rent could not be paid, I could file for eviction on Monday morning, which is what a corporation, one without owners with compassion, would do.

However, I am the corporation, and I will give the tenant a few extra days to come up with the remainder of the obligation owed, assuming some risk for doing so.

Some the folks interviewed want there to be no profits. This, of course, would destroy any incentive to produce privately. Governments could force production of products, but that is communism where independent initiative and dreams are nullified.

We cannot allow these imbeciles to outnumber us at the voting booth in November.

Market Mayhem

Investors should be treading very carefully these days in the capital markets. This is not a time for Aunt Mary and Uncle Bob and unemployed day traders. Former FED Chair Alan Greenspan said today that the market may be juiced some 50% due to FED stimulus. While the effectiveness of the stimulus can be argued, the FED cannot operate quantitative easing forever, and at some point, the stimulus will need to be retracted.

Forecasting the extraction of FED injected stimulus is one task, but navigating a market without integrity and rule of law signals a retreat to the sideline. Regrettably, in my estimation, we sadly have reached this point. MF Global is fresh on our minds, and last I saw, Jon Corzine was two fisted with his favorite cocktail cranking around the Hamptons. Meanwhile, his investors remain fighting to retrieve small portions of the investments placed with his frim feared lost.

The events surrounding the MF debacle should have been a major warning sign. In the aftermath, Ann Barnhardt shut down her brokerage firm Barnhardt Capital Management due to lack of confidence in the governance of the cattle futures market. Barnhardt warned of future issues to come, and this week we were greeted with the bizarre goings on at PFG Best. Score one for Ann.

Rick Santelli of CNBC further explains:



It seems clear we have issues at the CFTC and/or NFA, and all capital markets, for that matter. The FED seems to be in bed with the Obama administration, rather than operating with impartial market driven guidance. We have news the LIBOR rate has been manipulated, with Barclays among the first of potentially many banks to be signaled out.  JP Morgan, with problems turning up everywhere these days, reportedly played a role. LIBORgate will become a major financial mess, potentially blowing up every HP12C on the planet as the lawsuits get going. As it turns out, approximately 1 million mortgages were based off this rate, and that could be a huge problem.

We ran a blog post a few months back discussing market mayhem, eloquently described First Principles Capital Managements Doug Dachille, which we will present again below.



These market manipulations are quite complex difficult to get your arms around. However, when you couple the imminent implosion of the European Union with market manipulation and The FED gaming the system it becomes exponentially difficult to properly measure risk. In addition, the rewards of potential gains versus the risk exposure within tainted and manipulated markets seem not worth the effort. Although seemingly safe in large big caps positions, investors should keep a very tight leash on any investments.

Do you know who is running the casino? Are their friends being rewarded at your expense? Corruption is everywhere! There is market mayhem, being controlled by those who are not ashamed to be helping you lose your money. Trust and rule of law are absent. It is most unfortunate it has come to this, but in my view it clearly has.

Caveat Emptor!

Romper Room Regulators

Provided you were not disciples of Cloward and Piven, in thinking about the juvenile economic actions that have taken place during the Obama administration, you would think a bunch of kindergartners were running things.

That reminded me of when Alex P. Keaton stumbled upon such activity:



While it is always good to get some good laughs, the economic status of our nation is quite serious. We have to conclude that Obama and his team are not village idiots, so therefore, the actions must in fact be well organized. These people think you are stupid, and feel they are far more equipped intellectually to run your life for you.

After all, Obama did say he would transform America. From the greatest, most prosperous country on the planet to what exactly? As the anti-Colonialist Obama is, that is to bring America down to equal economic levels with those countries he thinks we stole wealth from. A global transfer of wealth.

It has to be very clear to any who can engage in comprehension what is happening, and given the conclusions, Obama must be defeated. While apparent GOP nominee Mitt Romney has a boat load of issues, he is a very successful business man and is and never has been a communist.

Future Financial Mayhem

You may not recognize it, but you are being lied to.

For an example, which is a full assault on your wallet, look no further than the monetization of the debt, which Fed Chairman Ben Bernanke said would not happen. Well, Investors Business Daily reports that the FED is readying for more stimulus. Perplexing for sure, given the failed results of previous quantitative easing, QE1 and QE2. Printing money decreases asset value, which surely will not be of assistance the millions of homeowners underwater.

Media outlets report that the economy is growing and jobs are being created, as evidenced by the unemployment number presented by the federal government. If that is true, it would not be necessary for the FED to engage in QE3.

Speaking of the FED, something has gone terribly wrong over the last few years. The FED is the lender of last resort and is charged with conducting monetary policy. Historically, Presidents have had little power over the FED, with the FED operating outside of executive branch influence, the exception being appointments to the boards and appointing the Charmian, if necessary.

Although the FED is by far the most powerful governmental agency, there is little regulatory oversight over its activities. Somewhere recently, particularly under President Obama, The FED seems to be carrying water for the administration and assisting in the implementation of policy. This is very troubling, particularly when the leader of the executive branch is not a free market capitalist.

Recent actions by the FED, seeming to begin with TARP, have broken tendencies and are raising concerns on both sides of the aisle. The creation of the conditions that allowed MF Global to take place is a recent example of the now problematic status of the FED, and how you are being lied to.

For a brilliant explanation, please see First Principles Capital Management CEO Doug Dachille at the Yale School of Management last December:



The government, using the FED through regulatory influence and intervention, is now choosing winners and losers. Although Fannie and Freddie are still in operation, it is the FED behind the curtain who is crowding banks out of the mortgage origination market and setting unreasonable credit requirements. As Dachille points, out, life insurance companies are being squeezed, and Sallie Mae has been taken over and private lending has been crowded out.

With MF Global, customer accounts were not protected. They were stolen to pay major players. Again, as Dachille discusses, with the suffocating Dodd-Frank bill, you might think customer accounts might be protected. If the regulators are charged with one thing, it would be to protect the integrity of the system, the trust that customer accounts not participating in risk taking activity are not hypothecated and can be made whole in a timely fashion.

This did not happen at MF Global, and due to the lack of trust in the markets sure to emerge because of this, bad things are on the horizon. If this can happen at MF Global, it can happen at any firm housing investments. A customer obviously has no control over hypothecation by these firms and therefore cannot be guaranteed a return of the investment should the firm be severely compromised or fail.

Beginning with the shafting of the bondholders of the automakers, the rule of law and trust of the marketplace, integral for the survival of a free market capitalist system, has been violated. You are being lied when government officials and the media inform you that everything is fine.

Until the rule of law is reestablished, the government becomes a bystander and the FED resumes normal open market operations, the market place is compromised and for you to be participatory in it, Caveat Emptor.

What The Hell Are You Doing?

Obtaining absorption of the weekly news cycle is nothing short of head scratching these days, with all the absolute non sense taking place across the fruited plain. However, it is particularly distressing when it includes folks have been thought to be operating from a common sense perspective. This week, we had three big eye brow raisers, and in response, we quote America's Mayor, Rudy Giuliani; What The Hell Are You Doing?










Hey Newt Gingrich, what the hell are you doing?

Mitt Romney seems to be increasing his foothold on securing the GOP nomination after victories in Iowa and New Hampshire, so in seeming desperate acts, Newt Gingrich unleashed a barrage of attacks on Romney and the action of the firm he helped found, Bain & Company, a venture capitalist firm. While there are several legitimate avenues of attack on Mitt, Gingrich choose to hit Bain and the business practices of venture capitalist firms as evil, job killers and something Americans despise.

Rudy Giuliani, joining Steve Doocy, Alisyn Camerota and Eric Boling on Fox & Friends, is far from amused. Take a listen:



As sad as that is, particularly from "the smartest guy in the room", Texas Governor Rick Perry felt compelled to join in, calling Bain a "vulture" capitalist firm. Come again?

Hey Rick Perry, what the hell are you doing?

Venture capitalist firms like Bain are integral to our capitalist system and free market enterprise. For mid sized firms that are losing their way, venture capitalist firms, typically invited in by shareholders, provide guidance, operational expertise, asset management and capital, generally for a piece of the company in an effort to help the company survive and thrive.

It is a risky venture, with marginal success rates. However, when successful, payoffs can be huge. Not just for the venture capital firm, but for the company, the employees, shareholders and in most cases, the communities which house the business operations. For Bain, companies like Staples, Clear Channel and The Sports Authority are three Bain Capital success stories.

Within 20 miles of my office, these three companies alone employ an estimated 500 people, who need places to live, work and play, which is most beneficial to the economy here in Orlando.

Bain Capital and similar firms should be appreciated for playing a vital role in helping assist in the expansion of commerce, which is vital for a capitalist system to bear fruit. Gingrich and Perry should be well aware of this, and should be called out for taking the approach of the socialist Democrats in railing against capitalism and free markets. I just did.

Hey Mitt Romney, what the hell are you doing?

In the aftermath a big victory in New Hampshire, Mitt Romney gave an outstanding victory speech, hitting all the chords conservatives are longing to hear. If we could trust this is what we would get with a Romney presidency, I think everyone would be on board. We cannot, as the very next day, Romney offered the following:

In the general election I’ll be pointing out that the president took the reins at General Motors and Chrysler – closed factories, closed dealerships laid off thousands and thousands of workers – he did it to try to save the business.

Obama violated countless free market principles in "saving" General Motors and Chrysler, most notably in the shafting the bondholders and closing down of dealerships with ties to the Republican party. The interference in the marketplace by Obama, exhibiting crony capitalism by picking winners and using tax payer funds to benefit friends and campaign supporters, are actions to be strongly condemned, not celebrated. Rush Limbaugh appropriately hammered Romney on his remarks.

Hey Haley Barbour, what the hell are you doing?

I do not know where the "tradition" of pardoning folks after a term in office came from, but I do not find a compelling reason to continue it. Certainly, there would be cases where such an action is warranted, and that is fine. One of the most celebrated cases came with Bill Clinton pardoning Marc Rich, which I find an error.

Unfortunately, this practice is not confined to Democrats. Enter Mississippi Governor Haley Barbour. Barbour has done a very good job as Governor of Mississippi, and was considered a potential GOP presidential candidate. As he concluded his term, he pardons several individuals that need to remain behind bars.

Media outlets have outlined the cases of a handful of these folks, and a Judge has blocked the release of those still incarcerated.



Although Barbour is "very comfortable" in his decision, I am very comfortable in finding him in gross error and condemning his action. Based upon actions such as this, the practice of knee jerk pardoning bus loads of criminals should cease. If these folks cannot do the time, they should not have committed the crime.

Perhaps common sense will re-assert itself this week, but I doubt it.

Information Misrepresentation: Appraisals

Information presented to the Public by various outlets is being crafted to misrepresent reality in an effort to skew political thinking, gain economic advantage and nudge social justice further down the American psyche. This is the first in a series of blog posts detailing instances in this regard, as it is imperative the Public recognize the significant level of misrepresentation and how vast the manipulation is.

Information Misrepresentation: Appraisals

The National Association of Home Builders (NAHB) reported this week one out of every three of its builder members has lost a sale during the last six months because of home values reported by appraisers.

NAHB Chairman Bob Nielson said, "The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery."

The NAHB did not stop there, further hammering appraisers with the following:

* According the Association, appraisers are using "faulty" practices by utilizing distressed homes as potential comparable sales against new homes. Mr Nielson said in a statement that "This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market."

* Mr Nielson notes that in many cases, new home appraisals are coming in below the cost of construction, because of flawed appraisals for utilizing existing and potentially distressed homes.

* Per the NAHB, These appraisal practices are a major contributing factor to the current acquisition, development and construction (AD&C) lending crisis that has choked off credit for home builders and threatens to prolong the current housing downturn. Falling appraised values for land and subdivisions under development have led some financial institutions to stop lending to developers and builders, to demand additional equity and even to call performing loans.

* The NAHB has been having summits, with leaders throughout the housing industry in an effort to find solutions that will allow appraisers to develop realistic valuations based on sales that are truly comparable.

Mr Nielson and the NAHB concludes that, you guessed it, “Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility or harm aspiring home owners and move-up buyers.”

One thing I know from the real estate world: It is always the appraisers fault. NOT! What we do have from the NAHB is information misrepresentation.

This must have been some series of summits. A bunch of bureaucrats gathered together to central plan the housing recovery, culminating in the one thing we need less, not more, of; additional regulations.

If additional regulations were the answer, the sweeping regulatory action spearheaded by former HUD Secretary and Architect of Ruin Andrew Cuomo, The Home Valuation Code of Conduct (HVCC), would have done the trick. Instead, it has wrecked the appraisal industry, leaving unregulated Appraisal Management Companies to coordinate, and in many cases dictate, appraisal performance.

Since distressed properties make up approximately 65% of the market here in Florida, it would be highly inappropriate to fail to consider these as potential comparable sales, provided the gross living area, age, amenities, and, of course, condition, were reasonably similar.

By applying political pressure to "develop realistic valuations," made as instructed will become a reality and as a result, valuations will be lacking in adequate support and accurate value.

Appraisal practices, as governed by the Uniform Standards of Appraisal Practice (USPAP), provide a framework for appraisers nationwide to adhere to in an effort to provide consistent and accurate valuation through the three approaches to value. These voluminous guidelines are a contributing factor to providing the industry with appraisal reports arriving at well supported value indications , not further deteriorating the housing crisis as the NAHB says.

Conspicuously absent from the many factors cited by the NAHB for the continued downward pressure on the housing market are the actions of the Obama administration. It is well documented that the origins of the collapse centered around the governments efforts to provide housing to buyers the marketplace weeded out. These potential buyers were not weeded out due to race, as ACORN would have you believe, but due to the higher risk associated with their ability to repay the loan. Before political correctness ran amok, his used to be referred to as sound business practice.

Among those applying pressure to the banks in the form of threatening race related boycotts was a young attorney for ACORN, Barack Obama.

While George Bush made failed attempts at forcing Congress to rein in the Government Sponsored Entities known as Fannie Mae and Freddie Mac, under House Finance Chairman Barney Frank, the Congress looked the other way.

Meanwhile, instead of letting the market cleanse itself, the administration has invented program after program to reward bad behavior and prop up the values of housing, which has only prolonged the pain and the problem. Government, who cannot be trusted, should leave the housing marketplace and let the free market establish a base for prices. In fact, we now learn the housing numbers have astonishingly been inflated.

Housing is not the only place numbers are inflated. Government spending, regulation and taxation is what is crushing the job market, with unemployment actually around 12% rather than the reported 8.6%, and for buyers to feel comfortable making large purchases in the form of housing, the job market needs to be at worst steady. Under this administration, there is no job creation, debt is expanding exponentially and Americans are in fear for the future.

Until jobs can be created in large numbers and the government diminishes involvement in what should be private sector activity, continued negative pressure on the housing market and America will remain.

As Ronald Reagan accurately said, "Government is not the solution to the problem, government is the problem."

Payne Squawk's Street

FOX Business Network's John Stossel recently spent an hour on his weekly program to investigate the claims being made by those at Occupy Wall Street. As part of the discussion, Stossel spent a segment speaking with Charles Payne, FOX News contributor and President of W Street Investors, about the many benefits of Wall Street. Take a listen:


There is little doubt that unscrupulous behavior has taken place by many who participate in the system of trading securities on Wall Street. Unfortunately, most if not all have not been held accountable. I don't know about you, but Franklin Raines, former Fannie Mae Chairman, is atop my list of those who should be at Sing Sing.

But Payne is spot on in his assessment. Government involvement rewarding bad behavior goes against the incentive based process of climbing the ladder, leading to market inefficiency and creating debilitating moral hazards and discarding personal responsibility. Entrepreneurship leads to growth companies, which are often fueled by venture capital on Wall Street. When these companies emerge and become a success, jobs are created providing unlimited opportunities for our citizenry and risk takers are rewarded.

No bailouts should have taken place, for failure is part of the process, often making people and corporations better from the lessons learned in the failed effort. Yes, unlike the media proclamation to the contrary, corporations are people.

For the little guy, Wall Street should be embraced and utilized as part of wealth building. Engaging in the dollar cost averaging process through discount brokerage firms, or through the companies themselves utilizing their dividend re-investment programs (DRIP), of many well known corporations can lead to future prosperity. Over 1000 companies, including Coca Cola, Walt Disney, Proctor & Gamble and Harley Davidson, participate.

Corporations are not evil and are not thwarting the success of those complaining at Occupy Wherever. Due to government interaction in the marketplace, many have been dealt a hard blow in recent years. Every government action to help has actually hindered. Until the taxation and regulation are reduced and free market capitalism can run wild, the job market will remain stagnant and the degree of difficulty in achieving success will be much steeper.

For those protesters, the quickest path to prosperity, if wanted, would be to embrace Wall Street and seek a prompt change at 1600 Pennsylvania Avenue. As Ronald Reagan said, government is not the solution to the problem, government is the problem.

Behind The Mask

Obviously, the chaos in Egypt is most troubling. Certainly, no society should ruled by the likes of strongman Hosni Mubarak. But is this a grass roots uprising for peace and prosperity?

It is not, and unfortunately, I am having difficulty finding the white hat in all this. Mohamed ElBaradei, the former UN weapons inspector who failed to see any wrong doing by Iran and drove into Cairo in his Volvo late last week, is an odds on favorite to take a leadership role. The media just loves him, but as Investors Business Daily accurately points out, ElBaraei would be a disaster.

ElBaraei is a fan of the Muslim Brotherhood and by extension HAMAS, as is seemingly anyone who steps in front of a microphone to discuss the issue save Glenn Beck. Everyone involved, including reporters at CNN, think the days of the Muslim Brotherhood acting up are in the past. They are not.

In the coming days I will be expanding thoughts on this crisis, however everything you need to know about the Muslim Brotherhood and those tentacle organizations associated with it, including but not limited to the Muslim Student Association, can be seen in the following exchange between an MSA member and David Horowitz.



Israel and freedom world wide is at extreme risk. Don't look for the media to expose any of the players, as they are complicit in it. Therefore, it will soon be time to reveal the masks, and I wonder who we will find around the shores of the Potomac.

It Could Happen

Bubbles are bouncing everywhere in the bathtub of our world, and they are seemingly increasing in size. Unfortunately, or depending on how you look at it, fortunately, this is more man made than a natural phenomenon.

I remember Warren Buffett's letter to Long Term Capital offering to by them out as they imploded. You did not have your retirement in Pets.com did you? Many Americans, noting that home prices have never had significant depreciation, became accidental landlords if they were fortunate enough to hang on. Most were not so lucky.

What's it like inside the bubble? Oh, my head is giving me trouble.

Where is the bubble now?

In an excellent editorial in Investors Business Daily, Scott Powell says it is already here.

Is the bubble in the worlds reserve currency? And what if that bursts?

Damon Vickers of Nine Points Capital Management has an idea:



Powell makes a great point in his editorial that "risk has shifted from the private sector to the public sector, with the US government debt market being the new bubble". God help us!

We have inmates running the asylum, and without a significant shift in planning, life as we know it is finished. It is imperative we urgently go back to the Reagan principle of sound money, which will take placing those with economic insight in charge. As Powell accurately states, Congressman Paul Ryan and his Roadmap for America is a fine place to start.

Time is not on our side. Inaccurate cost estimates for risk are expensive, and there is no free lunch. Make your voice heard now, before it is too late.

Doom of Debt Forecast

Now that bailout nation has turned into bailout planet, with President Obama pressuring German Chancellor Merkel to bailout Greece and scolding Spain on high debt levels, everything is fine. A quick check of the DOW and the NASDAQ shows all green. Life is good.

Where is Lee Corso? Not so fast my friend!

I recommend you give close listen to The Black Swan:



Nassim Taleb, author of The Black Swan, is alarmingly correct. All is not well. The markets are up because the US economy is doing better of late and companies are beating drastically lowered levels of earnings forecasts. And hey, throw a trillion dollars at the problems and you had better hope for some positive results.

The ban aid issued Greece will work in the short term, but the problems have not been fixed, and the expansion of debt obligations versus decreasing or stable income will shortly lead us right back where we started. Only, the next time, the list of those impacted in contagion will increase. Other PIIGS will be included, and Germany appears to recognize it. After all, PIIGS don't fly!

Certainly, the United States is not Greece. But, due to the incompetence in our current governance, if we find ourselves with a bankrupt Europe on our back, our financial status will rapidly decline. We are extremely vulnerable, and look no further than Wall Street last Thursday for confirmation.

There was no "fat-finger" or equipment malfunction when the DOW fell 1000 points in trading last week. There is no problem with Proctor & Gamble (PG:NYSE), who incidentally would be a place for investors to hide in such tumultuous markets. A major player(s) got out, and other mid to major players had algorithmic stop loss levels incorrectly positioned, thus triggering a cascading sell off. Once those in the know identified value in the market, buyers rushed in and leveled off the selling pressure at levels prior to the circus of events. But make no mistake, a seller of significant standing, not Aunt Mary and Uncle Bob, shifted investment from the equity markets into a safer position. Did you notice the rise in gold this week?

The socialistic blueprint in Europe is inefficient and is in collapse. It will not survive. For the Untied States, we should immediately take notice, by implementing no new legislation increasing entitlements, inclusive of the Cap and Trade bill. The health care legislation should be repealed and privatized, including student loans which somehow made its way into the bill. Spending must be slashed by 30% minimum, and if we don't take immediate action in this regard, perhaps this article can give you a glimpse of the future.

Unfortunately, the administration seems smitten with Cloward & Piven and appears to be intentionally trying to crash the system by overpowering it with entitlements. As Taleb said, the Obama team is likely not forecasting the future levels of risk properly, which is a problem of alarming magnitude. Clearly, you recognize the US government, and thus the taxpayer, cannot shoulder the immoral increase in debt and thus will collapse under incredibly excessive taxation. Then, no doubt, we will see civil unrest in our streets, and life as you knew it will be over.

Cash is King, at least until a measurement of anticipated outcomes (risk) indicates a very favorable November. It is up to us.

Fundamental Transformation: Evil Looms

Treasury Secretary Timothy Geithner's response to the question of addressing Fannie and Freddie by Joe Scarborough on Morning Joe caught my ear. Roll the tape:



Exactly how is the Obama administration going take a look at the entire housing market? How will they change the system completely? What regulatory steps will be taken to make the market more affordable and stable?

Clearly, Geithner is speaking of governmental intervention instead of allowing free markets to dictate, which is the action that should be taken. In case your are new to the issue of the housing crisis, government intervention is the central culprit in the problem.

I wondered if the government was going to take aim at limiting risk. Risk is an essential, and measurable, component in markets. Risk measures the variation in anticipated outcomes. Most home buyers in the last decade had never seen housing prices extend past a standard level of deviation, much less seen home values crash. Therefore, they anticipated that the risk of such an event were close to zero, even though as prices extended above measurable moving averages, risk increased.

Through Fannie and Freddie, the government controls almost 70% of residential home mortgages. The biggest player, and in most cases, the only player in town, these GSE's can dictate terms for lending, and through this mechanism, control risk.

Enter Glenn Beck, who in all seriousness these days is Inspector Clouseau and Woodward and Bernstein wrapped into one, and the evil plans of our government are exposed. Beck outlined a series of coincidences, that are actually not coincidences, that are extremely alarming. Please listen carefully to the following segment of The Glenn Beck Program from this past Tuesday:



The Examiner has more on this startling report at Examiner.com.

The administration has stated they never want to see a crisis go to waste. As I see it, the housing crisis, created in large measure by the government, appears to be a vehicle through which the government will implement cap and trade policies through regulatory actions on residential housing through the mortgage holder Fannie & Freddie. Remember the article recently in The American Thinker? Politico has more and this has been looming for some time.

The regulatory actions placed on residential housing will likely be a carbon tax based on the energy efficiency score placed on your residence. Interest rates, through the GSE's, if you can get them, will likely be based on your score as well. Keep in mind regulations that already exist for mortgaged properties, such as certain levels of property insurance. The slope is getting real slippery.

Forget that global warming is a hoax whose real purpose is provide a vehicle for the global transformation of wealth. Under this false premise, regulatory action on residential housing, enforced by the EPA, will tax residential property owners to fund this transformation.

While if voted in with corrupt measures like the Health Care bill was, it likely won't be illegal, but the actions of former Fannie Mae CEO and Obama transition team consultant Franklin Raines may well be. At any rate, this nonsense has simply got to stop, as our country is being run into the ground on purpose by Progressive global warming moonbats.

Obama proclaimed he is going to transform the Untied States of America. Into what, I am not sure, but into something our founding fathers would strongly resist. Wake your neighbors up before it is too late!