Friday, March 6, 2009

BBCW: Obama Centrists Starting to Wonder if Obama is Healthy for Country: Stuart Taylor's "Obama's Left Turn" Sounds Like a Familiar Friend

BBCW: Obama Centrists Starting to Wonder if Obama is Healthy for Country: Stuart Taylor's "Obama's Left Turn" Sounds Like a Familiar Friend

Great article about how some citizens of Obamanation are starting to rethink their citizenship.

Kansas City, Misery

Kansas City TV station KMBC announced today that the city is facing an $85 million shortage in their budget. Mayor Mark Funkhouser has put a plan up that includes holding back the $2 million dollar payment to the Truman Sports Complex. Eliminating the payment would essentially break the lease with both the Chiefs and the Royals.

While I completely see the point that the city needs to balance its budget, I wonder what would be more beneficial. Let’s examine the points.

The city doesn’t pay up, and the teams, basically, become free agents. Just like the Sonics did to Seattle last year, they could pack up and go because the city didn’t help them stay. Of course, there were other points in interest in Seattle, but that is for another day. With the bad economy affecting the entire country, do the teams have a realistic chance to find another city that would be able to support them financially and offer a viable fan base? One obvious answer is Las Vegas, but neither the NFL or MLB is willing to let a team camp out in Vegas due to their respective league’s stance on gambling. So Vegas is out. And in a down economy, Vegas just got some bailout money to remain viable anyway. Vegas is very out. For MLB, there are a few other options. Charlotte, NC, already has a basketball and football team. But since Charlotte is the Southern Banking Capital, the city’s economy has been hit hard. Atlanta might object to another team being so close, especially one where they have a large fan base. Charlotte stays on the list for now. Then there is New Orleans. Like Charlotte, there is an established pro sports legacy. One advantage New Orleans has is a ready stadium in the Superdome. Although it may be outdated, at least there is a place to play immediately. New Orleans is on the list. As far as I can see, those are the options for the Royals. Besides, who would want one of the worst teams of the last 20 years?

Unfortunately for the Chiefs, the options are not good. LA. That’s it. And we all know how that is going to turn out, don’t we Al Davis . . . .

Besides loosing the teams, there would be a ton of revenue leaving the area, along with jobs in concessions, parking, stadium maintenance, and team operations.

Now, let’s examine what would happen if KC bucks up and pays the bill. The teams stay. There is a rabid fan base for the Chiefs, which keeps the locals happy. People stay in employed and pump money back into the local economy. Kansas City would lose a lot more than $2 million if they choose not to pay up.

In this time of economic belt-tightening by municipalities everywhere, this is one time where the muni needs to splurge a little to keep their local economy from flat-lining.

Thursday, March 5, 2009

Markets tank again; GM and Citigroup lead the way

As of 2:30 PM today, the Dow was down 260 points to 6.612. And The One didn’t even mention the economy today. And Timmy hasn’t been in the news. Hmm. I guess this is just reflective of how the markets see the assistance from the government.

The Dow is down more than 50% from its high of 14,164 on October 2007. February 2009 is the worst February for the Dow since 1933.
“The Dow, which dropped 12 per cent this month, had its worst February since 1933. During the month, 20 of the 30 components reset their 52-week lows, with 13 hitting 52-week lows at some point during final session of the week.”
Citigroup’s stock finally fell below the $1 threshold. Welcome home, dear! I thought the feds were going to prop up Citi after their announcement last week about converting a few billion dollars in preferred shares to common stock. That would give the feds 36% ownership in Citi. Looks like that was a great idea..

Oh yeah, and GM is saying today they may have to go into bankruptcy to help restructure. Why didn’t they say this $50 BILLION ago? Once again, the government offered a band-aid to something that needed to be amputated. If GM is going to have to declare bankruptcy to get straight, they should just suck it up and do it. Bankruptcy would allow them to void their union agreement so that could be restructured as well. Every time they’ve been give BILLIONS, they come back to the trough like pigs a few weeks later wanting to get some more. Unfortunately, President Obama promised in his speech to Congress last week that he would not let them fail.

While the American auto makers are crying, why haven’t we heard any screams from Toyota, Nissan, or Honda?

Chavez Nationalizes U.S. Company Cargill

Hugo Chavez is at it again. He announced yesterday that he would be nationalizing all operations of U.S based food producer Cargill. Cargill makes a form of rice that Chavez is being made to avoid price controls.

With this announcement, Chavez basically halts all foreign manufacturing in his country. If he successfully takes over Cargill’s operations, many other countries and business will not set up shop for fear that turning a profit will put them at the short end of Chavez’s big stick.

Chavez is popular among the poor for forcing companies to produce lower cost food. That’s great that he is trying to help his countrymen. But in the long term, this is just like what is happening in Cuba. With no foreign investment, there are no countries willing to come in and establish manufacturing plants. Lower oil revenues for Venezuela, an OPEC member, mean less money for the government to play with. This is one reason President Chavez is gearing up his nationalization efforts, to take money from the businesses to pass around. Sounds familiar.

By nationalizing companies, Chavez is planning on keeping prices down and increasing government revenues. This will only keep or turn wages lower as the government struggles to meet payroll.

Venezuela’s situation will not improve anytime soon. By getting major support from the poor, Chavez is creating a situation where he is going to increase that class of people. And he is always going to blame business for the downturn in his country’s economy. His people will suffer, but he will be the hero, because they just don’t see any other solution than what he is proposing.

Wednesday, March 4, 2009

Quid Pro Quo, Clarice

President Obama made many promises during his campaign, just like any other politician. Unfortunately for him, his are likely to stick with him because of the nature of his fee-good campaign.

No lobbyists.

He was going to change the tone in Washington, gonna change the business. How is this change?

In early January, he unveiled his pick to head the FCC, Julius Genachowski. Genachowski and Obama have known each other since their days together at Harvard. Old chums. And just like other recycled picks by Mr. President, Genachowski worked for the FCC during the Clinton administration.

Why don’t we just start calling him President Barack Clinton?

In addition to working his previous experience in government, Genachowski was a – gasp – fund raiser for then-and-always-will-be Campaigner Obama. He raised over $500,000 for the Obama campaign.

While that may have been chump change for the campaign, this definetly looks like a case of back scratching to me. Genachowski may not have been a lobbyists for a law firm or anything of that nature, but can one be a lobbyists if you are lobbying for … yourself?

President Barack Obama has not change the tone of anything in Washington. He promised transparency and we get fund raisers in charge of government agencies. When George Bush was elected the media cried foul because he was bringing in a bunch of friends as associates, advisers, and so on. President Obama is doing the same thing and it gets buried on page 12.

Thanks, President Obama, can I have my change back, please?

Citimortgage announces Loan Modification Program

Citimortgage announced yesterday it had its own loan modification program. Under the program, home owners have the option to pay around $500 a month on their mortgage for three months if they meet certain criteria. Citimortgage is targeting those homeowners that are unemployed and perhaps behind in their payments. This is a great idea from Citimortgage and it’s time for more companies to propose something along these lines.

This proposal allows people to stay in their homes and also keeps the asset on the books for Citimortgage. Hopefully, this is more than a stopgap measure and homeowners will take advantage of this offer. They are even freezing credit reporting during the process as well. It is a win-win for both parties. Citi would loose a lot more if the house went into foreclosure than by asking someone to pay what amounts to rent on a one-bedroom apartment in most cities. It also protects other homeowners because this should help stabilize some property values.

This does what the government has tried to do through two pieces of legislation. It tackles the original problem of the economic turn we are in. It goes after home foreclosures. Once again, a business based solution trumps government.

This follows on the heels of Freddie Mac and Fannie Mae’s plans to rent foreclosed properties. Many renters were being evicted because the owners were being foreclosed upon, affecting the innocent tenants. While still being owned by Freddie (and in effect, the government) the plan keeps the homes occupied and from falling into a state of disrepair. Just like the Citi plan, it helps to stabilize home values and keeps a stream on income on the asset instead of letting it sit.

Tuesday, March 3, 2009

The ACORN Strikes Back, II

A few weeks ago, I posted this diddy about ACORN, and how they were going to stop foreclosures by basically barricading themselves in houses. Well, the good police of Baltimore actually made an arrest.

An activist with ACORN — the Association of Community Organization for Reform Now — faces criminal charges after breaking into a home in southeast Baltimore on Thursday to protest the foreclosure crisis sweeping the country.

"This is our house now," ACORN member Louis Beverly reportedly said after cutting a lock with bolt cutters at the home.

Beverly will be charged with fourth-degree burglary, according to Anthony Guglielmi, a spokesman for the Baltimore Police. Attempts to reach his attorney, Justin Brown, were not immediately successful.

Donna Hanks, who owned the home since 2001, lost it in September when she couldn't make her $1,995 mortgage payments. It was not immediately clear whether Hanks re-entered her home last week, but she was not expected to be arrested, Guglielmi said.

At least the homeowner was not implicated in this arrest. This is absolute lawlessness on the part of ACORN and it's organizers. Further down the article is an even more aggregious quote by Joe Cox, an ACORN organizer,
"We understand people have to do their jobs and we hope that they understand that we're doing this to highlight the issue."

Cox said he expects homesteading — refusing to vacate a foreclosed property — will become common as blame for the foreclosure crisis increasingly shifts from homeowners to financial corporations.

"This program is saying, 'We are not going,'" Cox said last week. "People say we're breaking the law, but we don't see how putting a person back in an abandoned property is harming anyone."
ACORN plays the victim card again. Don't blame me, I just had a $2,000 mortgage I couldn't afford. Blame the banks, they're the bad guys. When they [ACORN activists] want to break the law to make a point, they should be arrested. This is not a case of civil rights, this is blatant lawbreaking. Just because no one is living in the house doesn't mean they can just break in and squat and claim it.

Monday, March 2, 2009

The Quick Fix Is In

President Barack Obama announced another member of his 2nd string today by tapping Kansas Gov. Kathleen Sebelius. Pro-life groups have already come out of the wood work protesting her record on abortion. While that may be an issue of concern, it is not while I’m concerned about her nomination.

The state of Kansas made headlines in the middle of February by announcing they were stopping the distribution of tax rebate checks. This announcement was the result of an impasse between Democrat Governor Sebelius and the Kansas legislature where Republicans control both houses.

While the rebate checks became the polarizing issue, the state was also worried about whether or not they would be able to meet state employee payroll and Medicaid payments. In 2008, the state borrowed $550 million dollars from itself - $300 million in the summer and $250 million in December. Republican lawmakers are worried that if they continue to move monies between accounts – basically borrowing from Paul to pay Peter if the economy improves – that the other agencies may go broke or that they just may not be able to pay themselves back when the bills comes due.

Governor Sebelius was at odds with this strategy. She just wanted to borrow some more.

Republicans offered up a new budget slashing $300 million but Sebelius refused to sign it into law. The Governor issued this statement about the stalemate,
"Through their refusal to act today, the Republican legislative leadership is jeopardizing our citizens' pocketbooks for no other reason than to play political games — games in which the only ones set to lose are Kansas families, workers and schools.”

Yada yada yada.

So what does this have to do with her nomination to the post of Health and Human Services? Upon her confirmation, Sebelius will have a bigger budget to play with. With the country in a recession, if not depression, the Obama administration has nominated someone to a Cabinet position that seems to have absolutely no idea how to work within a budget.

A lot of this back and forth is simply long-term versus short-term impact on the economy. The Republicans in the Kansas legislature were trying to take a long-term approach to their budget woes, while Governor Sebelius seemed to want a quick fix.

The nomination of Governor Sebelius to Obama’s cabinet puts someone forward that may not be thinking of long term solutions, but is looking only to improve the health care in this country on a temporary basis.
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