Tag Archives: Socialism

Bank Of America Newest Awsome, Incredible Fraud on TARP and Investors

Bank of America  Chief Executive Officer Kenneth Lewis just forecast an absurd, totally unbelievable profit of $50 billion for this year on revenue of over $100 billion, a 50 percent profit margin. No legitimate bank in history ever had a 50 percent profit margin!

Under Chief Executive Officer Kenneth Lewis, Bank America  took $163 billion from the federal rescue program, and was widely expected to be taken over and totally nationalized because of bad assets. “Bad Assets” means that management had no idea what it was doing with shareholders’ and depositors’ money; i.e., bad management, failed management, management that should be replaced, invested in more than $163 billion of worthless assets, the losses on which had to be covered by the taxpayers..

CEO Ken Lewis also bought Merrill Lynch and failed to foresee that Merrill had tens of billions MORE of bad assets  than it told Bank America about during negotiations. Then a few months after being acquired by Ken Lewis’ Bank, Merrill suddenly discovered another billion or so of losses in its London office.

Ken Lewis appears to be guilty of, select one or more of the following:

1.   Not having the foggiest idea of what is going on inside his bank;

2.  Not knowing what the condition of Merrill Lynch was when he was dumb enough to buy Merrill, let alone overpaid for Merrill;

3. Defrauding the government out of $163 billion to save a troubled bank when it actually had the highest profit margin in the history of all banks anywhere in the world, anytime;

4. Lewis presided over a gigantic phoney, criminal write down of assets last year, and then reversed the write down this year to save his job by falsely claiming his grand intelligent management saved the bank;

5.  Bank America is run by escapees from the lunatic asylum, or by Barney Frank, or by Chris Dodd, and has no connection to reality whatsoever, just like Obama’s stimulus plan, and just makes up numbers for press releases depending on how much coffee the good ol’ boys drank that morning;

6. No one in finance or the government has any idea what the truth is about any big bank, so it is acceptable for a bank to say it needs $163 billion of taxpayer money, and the 90 days later accidentally notices that it made $50 billion profit;

7. In an industry that normally has a 3 to 5 percent profit margin, incompetent management can make a 50 percent profit margin, and nobody smells a “Madoff?”

With events like this continuuing, it is insane to believe any reported financials, which means there is no way to decide which stocks to buy or sell. In the land of the blind, the one eyed person is king. This one eyed person sees nothing but piles of deaf, dumb and blind retards pretending to be corporate boards of directors, and will not own any stock or bond for a long time.

How to Cure the Recession

Absolutely timely report by The Reason Foundation www.reason.org on just why Keynesian economic practices do not work.

As I’ve articulated before, the United States is following the exact same mistakes Japan made throughout the 1990s, now infamously nicknamed “The Lost Decade.”  Housing bubbles, government intervention into the marketplace, and bailouts and stimulus (”shovel ready”) spending plans tried over and over and over again throughout both the 1990s and now the 2000s did nothing to solve the economic malaise Japan found itself in.

At no point did Japan actually consider free market principles, not unlike what we are doing today.

The Japanese government did not take a cue from the mistakes the US had made decades earlier in 1929–mistakes that turned a recession into a full blown depression lasting the entirety of the 1930s and continued on even after Europe began to experience sustained growth prior to the outbreak of WWII.

One of the great take-aways from this report is encapsulated in the following paragraph:

“The fact is that Congress lacks the expertise to run a bank or create viable business plans for any sector of the economy. Furthermore, lawmakers incentives are to serve their constituencies or better their own personal political careers. This potentially puts them directly at odds with the businesses they are trying to manage. The more the government is involved in directing business activity, the less likely those firms will succeed in maintaining long-term growth.”

The report accurately shows how government intervention got us here, but doesn’t quite capture the entire breadth of the adverse impact of public sector policies on the private sector.  If I may, it misses how both President Bush and Senator McCain tried to arrest the problems at Fannie Mae and Freddie Mac in 2002 and again in 2005.  More compelling to note is that the government’s intervention into the free commerce of free people’s in the following sectors are the true cause of the current global recession:

  • Energy production (resulted in tight supplies and record energy costs/prices)
  • Housing (Community Reinvestment Act and subsequent additions resulted in forcing banks and financials to issue toxic loans known as sub-prime mortgages; caused a demand bubble and an aberration in equity/capital; failure to issue loans to sub prime customers resulted in heavy government fines or litigation by “community organizers” such as ACORN)

Financial Institutions (Fannie Mae and Freddie Mac would bundle the toxic loans and sell them off all over the world; FNM/FDM would guarantee toxic loans made by banks and financials, further exacerbating the problem)We are now following in Japan’s footsteps, making the same exact mistakes and the result will be stagflation and low growth/recession for the entirety of the Obama years (hopefully only 4) and beyond unless and until:

  • Those policies that caused the problem to begin with are repealed
  • We start to adopt free market, pro-growth GDP principles and policies that will spur the investment/entrepreneurial class into to ventures, job growth, and wealth creation.

I have advocated before and continue to do so now.  If we adopt the following policies, the recession will end within 1 quarter of economic activity:

  • Make the Bush Tax Cuts permanent; they expire next year and all of us face the largest tax increase in history in one year’s time
  • Eliminate any and all barriers to trade; pass all pending free trade agreements (FTA).  FTAs open up foreign markets to our exports
  • Eliminate subsidies, they are an interference in the market and are an aberration to price.  US consumers pay more for goods and services thanks to subsidies
  • Eliminate all taxes on small businesses and corporate America.  This will provide more capital to those businesses
  • Change the tax code.  Let us move away from a Karl Marx proposed proportional tax rate to a free-market friendly flat tax; it will spur massive investment, savings, and help create wealth
  • Eliminate Excise and “sin” taxes; they represent a disparate impact on the poor who do not have the disposable income that many of means do. 
  • Eliminate Federal gas taxes.  The states should levy these taxes, not the Fed.  The Fed does nothing to produce oil and gas and they take almost twice the amount in taxation that the producers receive themselves (gas companies earn 9 cents on a gallon of gas; the Fed earns approximately 14 cents and produces nothing!).
  • Eliminate as many government regulations as is possible.  The private sector pays over $1 Trillion in compliance costs every year–now that’s a true stimulus!
  • Eliminate all barriers to energy production; this all started thanks to restrictive supplies to oil/gas.  We are beholden on imports for our energy, which is the largest element of our trade deficit
  • Repeal the Community Reinvestment Act
  • End Fannie Mae and Freddie Mac
  • Cut government spending.  Place a moratorium on all pork barrel spending until such time as the budget is balanced.  While the rest of the country is laying off or firing employees, Congress hasn’t laid off or eliminated not one single position.  The government grows while the private sector contracts.  Unbelievable!
  • Increase interest rates back to a respectable level, 5%.  Loosening the money supply only encourages more ill advised lending, time to tighten it up and bring value back to the dollar.  It may have been the only thing the Fed could do since Congress refused to pass tax cuts, but enough is indeed enough.  At this point low interest rates are counter productive.

Why Are Food Stamp Babies Like Nadya Souleman and Barack Obama All Over the News?

Everybody keeps writing and reading about food stamp babies. Why doesn’t anyone give news attention to real people instead of welfare scumbags like Barack Obama and Nadya Soulemen, the octuplets mother?

I think we should write about the accomplishments of people who were raised the American way by parents who got married before having babies and worked for the money to raise their children.

I am sick of this new Communism/Obamaism/Octupletism/Crapism that has taken over my America.

If you agree post a comment so we start a movement to stop this Communism