The Coming Crash

 

 

"So we spent our stash! So what?!?"

A bit of family history. Shortly after we were married, my wife and I were out with some friends on a Friday night. After a couple of rounds of drinks, my wife and I thought we would might have one more round with our friends. My wife looked in her purse to see if we had enough for another round. She found $40 she did not know she had. Party on! We had the third round and then ordered dinner. It was not until we went grocery shopping on the following Saturday we realized we accidently spent our grocery money. Ouch. Since we were students back then, and usually stone cold broke, the food situation for the following week was very bleak indeed.

Why do I tell this story? This is the same thing which is happening to our country right now. Really? Like how? Remember the Social Security Lock Box? The money which was going to protect our Social Security Fund, and keep it going almost forever? Gone. Not only gone, but never existed. Where is all that money? Spent. Some on Social Security benefits, some on "other".

There is now talk of juicing up the Federal gas tax to reinforce the Highway Trust Fund. Seems the roads and bridges the Feds are suppose to maintain are not in good shape at all. Where the taxes taken in for the Trust Fund too little? Maybe, or maybe not. One thing is for certain however - much of that money has been siphoned off into "other". If we had not spent some of that money on bike paths and fitness classes, the fund might still be viable.

This type of thing is happening across the board. It seems the math used to ascertain funding required to match appropriate spending, went sideways. In other words, there was no math. We have obligated trillions of dollars (that is trillions with a "T") to be spent on entitlements, pensions, trust funds, you name it - without having the correct amount of funding or oversight.

So where does that leave us? It is as simple as a law of physics. Either programs which were promised are going to go bankrupt and fail, or we are going to have to pony up with some HUGE cash to get the math right. When I say huge cash, there might not be enough tea in China to make this happen. The dollars required are simply staggering.

Whose fault is this? Ours. We elect idiots, morons and crooks to manage this kind of money. Then after we elect them, we go into "auto pilot". In other words, we just assume they are doing the right thing. They are not and they have not. For decades now, they have not. We have known there is a problem, and yet refuse to fix it. You know, kick the can down the street so to speak. My old boss once told me, "When you are in a ditch, stop driving the same way." Amen to that. We truly are in a ditch right now.

With the new Congress in session, it is okay to ask them what we are going to do about this. It is not okay to hear the same pabulum we have heard for years. A crash is coming. The only question is this - will it be a bad crash or a fatal crash? That decision is up to us and the new Congress.

He's just a nowhere man...

 

 

"He's a real nowhere man, sitting in his nowhere land, making all his nowhere plans for nobody..." 

 

Nowhere man

The Beatles

Where in the heck was he yesterday? Gone. MIA. I even looked for his picture on the back of a milk carton. The biggest event in the world was happening in Paris, and one person in particular was missing. Nobody important. Only the leader of the Free World.

It has been said what France went through last week was their version of 9/11. Terror came to visit as an unwanted intruder to this long standing European ally. The way this terror happened, the carnage it left behind, the symbol of free speech it tried so hard to destroy, touched many across the globe. For that one day, yesterday, Paris became a Mecca for freedom loving people everywhere. It was a huge demonstration against terror. Over 1,000,000 strong attended. Leaders of nations marched arm in arm. That is, except for one. Our President. Neither he, nor the Vice President, nor the Secretary of State attended.

His absence was duly noted my many in Europe. Some of the Euro newspapers blasted him for not coming. It was an opportunity lost. And why? Is it he has such a distain for even saying the word "terror"? Or "Radial Islam"? What is it? He has zero problem hopping on Air Force One and going anyplace in the country for fund raising. And golf? Stay out of his way, or get run over. However as the leader of the Free World, there are tacit responsibilities that come with the title. Attending the event like the one held yesterday is one of them. Everything should have been cleared off his calendar and he should have been there. Arm in arm, with the other world leaders.

More and more people worldwide are starting to get the message about terrorism. It is here, it is growing, it is morphing, and it is not going away. We need a President to call freedom loving leaders together and come up with an iron clad strategy to beat this thing - and soon. The longer we let it fester, let it grow, the more chances we will have another Charlie Hebdo.

My advice for your final two years Mr. President is simple. Put your clubs away. After your term is up, you can play every day with no conflicts. Work with the new Congress in passing legislation the people want. The vote last November was crystal clear in what they want and need from Washington. If you really want a lasting legacy which is positive, put the wheels in motion to develop a strategy. A strategy to soundly defeat this terrorism. And you can start by calling it by its proper name - Radical Islam.

A ROARING 2015!! (?)

 

 

"Happy days are here again, the skies above are clear again...so let's sing a song of cheer again, happy days are here again..."

 

Happy Days are Here Again

Holy smokes! This is better than the Roaring 20's! The economy has mending and we are all doing much, much better! Well, that is the cover story on many of the MSM news channels. Are we doing better? Is the economy healed? Have the President's policies really helped? Time to take a look I believe.

Recently I listened to a host of one of the more popular financial shows on cable. His words - "The rich keep getting richer, the poor keep getting poorer, and those in the middle are going nowhere fast." He went on, "The only reason our economy is looking so good right now is that all the other world economies are so much worse." I then decided to look at our metrics as of the end of 2014.

• Unemployment - Ah, the number we all love to talk about. The U3 rate has dropped to a paltry 5.6% at the end of December. That is good right? Not really. As has been said many times before, that number is about as useless as a screen door on a submarine. With over 92,000,000 people out of the workforce, the U3 keeps dropping. The U6 number however, is still at 11.2% Our labor participation rate dropped to 62.7% (hint: that is very bad). The statistic which is the most shameful is black unemployment. It is still at 10.4% with black youth unemployment at 33%.
• Wages - For the middle class, they remain flat. However, the net take home pay went up solely for one reason - fuel costs. With gas being under $2/gal in many areas of the country, that is an additional $1,000 net dollars for the average family every year. The mystery to many is why in this era of high labor demand, wages are not keeping up. One reason is Mexico. They continue to offer a lucrative option for touch labor manufacturing. The average wages for manufacturing in Mexico is $5/hour. NAFTA has made that option very easy. The other reason is technology. More and more jobs are becoming automated.
• Debt - I can hear it now - "Will you PLEASE stop gripping about the debt?" Okay, I will. I will only talk about obligations. The national debt is just a smoke screen anyway. Mere chump change to the real issue. In fact, the real issue is so scary, it is rare to ever hear it discussed in Washington. Our unfunded liabilities is $92.5T, and growing. The total of our national assets is only slightly higher than that. If we were a household instead of a country, our credit score would be under 500.
• Banks - tick tock, tick tock. I have addressed this issue a few weeks ago. All the metrics are once again in place for another financial catastrophe (like derivatives). Tick tock, tick tock.

So maybe happy days are here again. Or maybe this is the calm before the storm. It is of little solace knowing our economic prosperity is based on the fact we are the best of the bad. Time to sign off and go to Costco. I need some more survival food. 

Head on collision

 

 

"Head on collisions are about as bad as they come..."

In the past few weeks, we have had two head on collisions. And neither one had anything to do with driving. What collided? Tyranny against liberty, that is all. To me, it was a textbook example of these two forces coming together in an unpleasant manner.

The first involved Hollywood, the purveyors of filth and bad movies. Oh, they are still capable of making a good movie (once in a great while). However, the trend line has been for vile and tasteless humor. It seems the recent movie The Interview ruffled some feathers over in North Korea. They did not like the way it portrayed the current "Great Leader". I guess even at the end of the movie the "Great Leader" gets a ticket to the "Great Beyond". I don't know for sure, as I did not see it.

Before the release, in came the threats. The Norks were going to do something nasty to Sony. They were going to hack the heck out of their IT infrastructure. They were going leak sensitive data. They were even going to hack movies which had not yet been released and (gasp), release them for free on the internet. The final straw came when they also threatened movie theaters who showed this movie. A "9/11" type fate would await any theater who released this garbage movie.

The second of course, was the bloody massacre in Paris last week. Over some tasteless cartoon and satire, done by a small group of people who satirize just about everyone in power. Many times the cartoons are borderline pornographic. However, they "stepped over the line" when they made fun of the Prophet Mohammed. Death threats were issued, and then carried out. 

The collision happened in both of these incidents because of two opposite principles. The first is tyranny. This principle is one person (or government, or organization) stealing the liberty of another person(s). History is replete with examples of tyranny. The second is liberty. The freedom of Hollywood to make garbage movies, of cartoonists to satirize anything or anybody, and so long as nobody is harmed, they have that right to do so. I also have a right. I have the right not to see movies I find objectionable. I have the right not to read papers or look at cartoons that might offend me. Those are iron clad, God given rights. They are known in this country as part of our freedoms.

In the future, look for more collisions of these two principles. These will continue so long as we allow tyranny to exist. Once tyranny is gone, or at least held at bay, driving the liberty express will again be safe - anywhere in the world.  

Terrified of terror...

 

 

"We need to go in and kill every one of them. And then we need to go away, leaving nothing but smoldering ruins and weeping widows..."

 

Col. Ralph Peters (USA-Ret.)

Fox News Military Analyst

What happened yesterday was a classic example of the Alice in Wonderland  world we are now living in. As bad as the events were that happened yesterday in Paris (and they were very bad), that was not the news of the day. The head of MI-5 (the British version of the CIA), who is usually as loquacious as a church mouse, came out with a very ominous warning. (To paraphrase), "Get ready - they are coming. They will commit acts of terror which are designed to cause mass causalities in the West (that be us by the way)."

Some think the "cleansing of the world" for God's final judgment is underway. That would be the current Caliphate. I believe history will show this conflict to be one of the most important and critical in modern history. And yet there is one thing lacking. While one team is on the field scoring points with their offense, the other team has decided either not to play, or to put up a tepid defense. In fact, the other team is so intimidated by the offense, it will not even use its name.

Radical Islam. There. Is that so hard to say? It sure is for our Commander in Chief. And why is that? Is it just PC run amuck, or is it something else? I don't know. Some are starting to think it is something much deeper. All I know is this. The longer we keep our heads in the sand about this growing threat, the harder it will be to neutralize. And playing nice with these people will not work. They don't give a tinker's dam about nice. All they know is dead, as in that is how they want us.

Yesterday was a great opportunity for the Leader of the Free World to get up on a stage and call out the bad guys. Tell them we are coming for them. There is no place on this Earth to hide. Their days of murder, butchery and mayhem are soon coming to an end. Nope. Instead he went to address a bunch of star crossed Millennials (or lemmings) about his new "free" junior college proposal. Two problems with this. First, as most of us know, it is not "free". It is only shifting costs to either our ever growing debt, or to new taxes paid by us. The second (and much more important), if we don't address this terror threat for what it is, there will not be much a future for anyone, with or without a "free" two year degree.

At least yesterday our government had the foresight to issue a world wide terror alert for air travel. It is about time we adopt the "non-PC" method of airline security the Israelis use with El-Al. Now that the terrorist have announced they have developed a bomb which can make it through our airline security measures, we need a better mousetrap. Either that or air travel in this country will go from safe to risky.

As far as I am concerned, I have had it. Enough is enough. My blood started to boil on 9/11 and has not stopped since. We owe it to our kids, our grandkids, to all innocent people in this world to take action. Time to choose. You are either on the side of good, or the side of evil. The killing of innocents never falls on the side of good.

Smoky Mirrors....

 

 

"The market today is phony baloney, good time rock and roll nonsense. It is nothing but smoke and mirrors..."

Yesterday we had a young man from an insurance company visit us to explain long term care insurance. After seeing how expensive long term care is for my Mother, this is something my wife and I decided might be a smart idea to get. Once the young man arrived, we chatted for awhile, and then he went into a sales pitch on redistributing our assets into the stock market. After a couple of minutes I stopped him (politely), and said two things - 1) we are interested only in long term care insurance and 2) anyone who puts even a dime in the stock market right now is playing with dynamite.

I glanced over at my wife just long enough to see her roll her eyes. She knew what was coming. She has heard this over and over again from me. However, it was important for me to "school" this young man. To let him know of the great conspiracy. How we are all being duped.

"Do you know how much the market went up today" I asked him. Not a clue he responded. "Over 300 points" I continued. "And do you know why it went up 300 points?" He looked a bit uncomfortable and said no. "It was primarily due to expectations that Europe is going to keep their interest rate artificially low until at least 2016. That is it. Nothing more. Oil was up a notch, but is still trading under $50/barrel."

I continued on. "Do you know the primary reasons for the market crash in 2008?" Now he was really squirming. "Lots of reasons" he safely replied. "That may be", I went on, "but the two primary reasons were the handling of toxic assets by Freddie and Fannie as well as too many derivatives held by banks. Today, we have two large banks that are holding $300T in derivatives. That is more money than all the currency in the world. In addition, the hedge used for these derivatives is oil being traded between $100 and $120 a barrel. In addition, with the Fed holding the interest rates below market as well as printing money like crazy, we have a huge bubble coming up once rates are normalized. The cost to service our debt of $18+T will be a back breaker for the economy."

By this time the young man was very happy to drop the topic of our asset redistribution and get back to long term care insurance. Johnny "rain cloud" had done his job again. I rained on another parade. I am sorry, but this is just too dang important to keep my mouth shut. The truth is simply this - our economy is NOT in good shape. We have only put lipstick on this pig. We are living on borrowed time. Some experts are already talking about the next crash. And it will not be good. This one might be really huge - much bigger than 2008.

Sorry this posting could not be more chipper. The good news is this - if you have any money, spend it now. Travel, buy something, or whatever. Until the bubble pops, it is still a bubble. And as kids say, blowing bubbles is fun. 

Once again, shot with own gun...

 

 

"Sometimes people, organizations, or even religions can be their own worst enemy..."

Yesterday, the world was once again exposed to the worst of the worst. This time in Paris. The crime committed which drove these terrorists to execute 12 innocent people? Free speech. Crude and humorless cartoons. But free speech never the less. And to top things off after committing murder and carnage in the newspaper office, they executed a cop. He was lying wounded on the sidewalk. He begged for his life, with his arm raised. He was then shot in the head. Killed in cold blood. No mercy. No remorse.

The evidence is starting to stack up. Patience worldwide, is wearing thin. We have seen carnage beyond belief in Northern Africa, Iraq and Syria, and now in Europe. Innocent people. Some whose crime was no worse than belonging to a different faith. Others who belong to the same faith and did something "unacceptable" to the terrorists. Small children beheaded. Babies stomped to death. People of all ages shot to death and then thrown in mass graves. Some even buried alive.

So what is driving this? Is it truly the start of the next Caliphate? Is it a religious war? Is it East against the West? What is it? How does the world negotiate peace with people who only want us dead? Our way of life dead. Our faith dead. How do we beg for mercy to those who show none? Ask for forgiveness to those who don't forgive. Ask for love to people who have long since forgotten what love is.

The human condition should be one of survival, community and love. For most it is. Most people want to live. They don't cherish death. They don't want to be martyred. People want to go to work, earn a living, and then come home to their families. Many today want to see their children educated, grow up, get married, and then maybe have children of their own. For some reason, this type of lifestyle is so heinous to some zealots, they will kill and destroy everything about it. Absolutely, and totally.

I would like to say I have a solution to what is happening today. I do not. A person much to the right of my views said, "We should just kill them all, and let God sort them out." I don't subscribe to that way of thinking. Although I will say this - the opinion of the civilized world is starting to turn against this major religion. Even though the zealots committing these crimes might be a very small percentage, this entire religion is becoming tainted from this senseless violence.

As people of faith, we can only pray. Pray for peace and healing. We can track down and catch the ones who are guilty, and then show them justice. The ones who are not guilty, we should continue to love and show compassion and mercy. At the end of the day, that always wins over hate and evil.