FedUpUSA

Archive for April 19th, 2011

For those who are unfamiliar with Janet (although regular readers of FedUpUSA should know her well): 

Janet Tavakoli is the founder and president of Tavakoli Structured Finance, Inc. (TSF), a Chicago based consulting firm providing expert experience and knowledge about maximizing value in the face of complexity and uncertainty. TSF provides consulting services to financial institutions, institutional investors, and hedge funds. Ms. Tavakoli also provides expert consulting and expert witness work including exceptional quality expert report writing and crisp, persuasive testimony. Plaintiff engagements include Bank of America N.A. et al. v. Bartmann, JPM Chase, et al. Total claims in the consolidated litigation exceeded $1.2 billion. Engagements include representatives of plaintiffs or defendants depending on the issues.

Keiser Report: Murderers & Martyrs

About 8:00 into this video.

For those who might not know, Chris Whalen is the Senior Vice President and Managing Director of Institutional Risk Analytics.  All they do is assess banking risk.

Military.com posted an article discussing the various proposals for ‘balancing’ the ever-ballooning budget.

There has been some recent buzz about the House of Rep­re­sen­ta­tives propos­ing more cuts to vet­er­ans’ ben­e­fits. This time, the focus has fallen on VA Health­care and exclud­ing some vet­er­ans over oth­ers. Here is what you need to know about the debate.

The House Bud­get Com­mit­tee recently announced plans to cut $6 bil­lion from VA Health­care for 1.3 mil­lion vet­er­ans who are in Pri­or­ity Group 7 and 8. Roughly 10 per­cent of these, some 130,000 vet­er­ans, will be forced out of the VA sys­tem with no avail­able alter­na­tives. Vet­er­ans from Group 7 & 8 have either a 0 per­cent service-connection or no service-connected rat­ing. While this does not mean the vet­eran is fit as a fid­dle, it does imply they do not need the amount of care needed for other vets. These vet­er­ans pay co-pay and have incomes over $32,000 and net-worths under $80,000, depend­ing on geog­ra­phy. In other words, they aren’t dirt poor but cer­tainly not wealthy, either.

The Con­gres­sional Bud­get Office believes the U.S. can save $62 bil­lion over the next 10 years by remov­ing ser­vices for these vet­er­ans alto­gether. Accord­ing to the agency, 90 per­cent of the vet­er­ans in ques­tion have access to some form other health­care other than VA funded. How­ever, the CBO does not com­ment on whether the alter­na­tive health­care is afford­able.

I’m going to say right up front that this is reprehensible.  Not only is it disgusting, it’s pointless to pretend that ANY of these proposed cuts to VA benefits will be anything but a microscopic drop of water in an ocean.  Let’s talk about some reality here. 

So, let’s see….our overall spending on defense is only about 1/6th of our total budget outlay, or as indicated here, $744 billion.  Of that, only a tiny fraction goes towards healthcare to our current and retired military.  Keeping in mind that these brave men and women were willing to sacrifice their very LIVES to do their jobs, let’s compare that to banker welfare expenditures over the past 4 years.

First we have TARP, the Troubled Asset Relief Program, the program that has essentially been welfare for Wall Street bankers given by Congress to cover the massive Ponzi scheme they created by selling worthless securities to unsuspecting suckers like your pension and retirement fund managers.  This program allowed the US government to purchase assets and equity from financial institutions to ‘strengthen’ the financial sector.

Then we have TALF the Term Asset-Backed Securities Loan Facility, the program designed to allow the Federal Reserve to use taxpayer money to buy ‘distressed’ (I prefer ‘worthless’) loans.

Then we have the EESA, the Emergency Economic Stabilization Act of 2008.  Initiated under Bush, through acts of extortion by then Treasury Secretary Hank Paulson.  This spawned TARP cited above, as well as expanded the powers of the US government to basically use taxpayer money wherever and whenever Wall Street deemed it needed it.  This was where we got the ‘we’ll see tanks in the streets if we don’t get this money’ threat from Hank Paulson. 

1.  The Government As Investor:  Total expenditure of taxpayer money – $9.0 TRILLION.  This includes direct investments in financial institutions, purchases of ‘high-grade’ corporate debt and purchases of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae (the latter of which is the only legitimately government-guaranteed entity). 

2.  The Government as Insurer:  Total expenditure of taxpayer money – $1.7 TRILLION.  Includes insuring debt issued by financial institutions and guaranteeing poorly performing assets owned by banks and Fannie Mae and Freddie Mac.

3.  The Government as Lender:  Total expenditure of taxpayer money – $1.4 TRILLION.  A significant expansion of the government’s traditional overnight lending to banks, including extending terms to as many as 90 days and allowing borrowing by other financial institutions, which includes foreign banks.

Sources

This only includes figures up through February 2009.  (Is your hair on fire yet?)

Now, let’s add in the most recent and nefarious taxpayer theft of all, ‘quantitative easing.’  What’s that?  Here’s a primer:

While it is often explained as ‘printing money out of thin air’ – that’s not quite accurate.  It is more specifically, printing money guaranteed by your future production.  It borrows against the taxpayer’s future potential to actually produce something of value.  If it sounds a little bit like exploitation or slavery, that’s because that is exactly what it is, which is precisely why the Federal Reserve is content to allow you to think it is printing money out of thin air.  As distasteful as that is, it’s preferrable to the truth.

Each time the Federal Reserve prints money for which there is no current production to support, it is ‘pulling forward demand’ or, devaluing the US dollar.  This is, in effect, a stealth tax on you, the taxpayer, as it then costs you more of those devalued dollars to purchase the things you need.  This is commonly referred to as price inflation.  So, you get hit on both sides.  Your future production has been used as collateral for these new dollars created and at the same time, it causes you to need to produce more to afford the things you need to live – like food and energy (gas, oil).  Conveniently those two catagories of expenditures are not included in the government’s calculation of inflation, (the Consumer Price Index or CPI). 

So, what is your total liability for the two rounds of Quantitative Easing performed by the Federal Reserve?

$2.7 TRILLION.

So, let’s see, $14.8 TRILLION has been spent on WELFARE FOR WALL STREET BANKERS!

Now, tell me how there is ANY justification for cutting health care benefits to our Veterans.

While you’re at it, tell me what items can be cut from the budget that even comes close to the liability our government has created by bailing out insolvent banking institutions.

Wake up America.  I don’t care where you stand on the current wars, are you willing to throw our troops under the bus for Wall Street welfare?!!

Who and what else are you willing to throw under the bus to allow our government to continue to support and hide massive corruption?

STOP THE LOOTING & START PROSECUTING!

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Dissolving Governments in Michigan

New measures passed in Michigan will allow the state to dissolve governments, void union contracts, toss aside elected school-board members, close schools and authorize charter schools. Thankfully, those measures are being put to good use.

Please consider Using New Emergency Financial Manager Law, They Start Dissolving Governments in Michigan

In what is likely to be just the first of several dissolutions of democratically elected city governments and school boards in Michigan, the Emergency Financial Manager of Benton Harbor, Joseph Harris, just took away all authority from the city’s elected government.

NOW, THEREFORE BE IT RESOLVED AS FOLLOWS:

1. Absent prior express written authorization and approval by the Emergency Manager, no City Board, Commission or Authority shall take any action for or on behalf of the City whatsoever other than:

i) Call a meeting to order.
ii) Approve of meeting minutes.
iii) Adjourn a meeting.

2. That all prior resolutions, or acts of any kind of the City in conflict herewith are and the same shall be, to the extent of such conflict, rescinded.

3. This order shall be effective immediately.

The author of that blog sees it differently than I do. “EmptyWheel” complains. I cheer.

When you are bankrupt you lose authority to a bankruptcy board. That bankruptcy board gets to make actions. As part of those actions, city officials who could not or did not do their job, lose their rights to govern.

How can that possibly be wrong?

In many instances elected officials cannot possibly do their jobs because of poor decisions made by their predecessors. For examples, many cities are cash-strapped because of untenable agreements on wages and benefits given to public unions.

Public unions typically will not negotiate, being the foolish entities they are. So bankruptcy and takeover is the solution.

Detroit Moves Against Public Unions

Benton Harbor is small-potatoes. Detroit is big-time. Moreover, Detroit is bankrupt and public unions are part of the reason. Thus, I am pleased to report Detroit Moves Against Unions

A new state law has emboldened the Detroit mayor and schools chief to take a more aggressive stance toward public unions as the city leaders try to mop up hundreds of millions of dollars in red ink.

Robert Bobb, the head of the Detroit Public Schools, late last week sent layoff notices to the district’s 5,466 salaried employees, including all of its teachers, a preliminary step in seeking broad work-force cuts to deal with lower enrollment.

Mr. Bobb, already an emergency financial manager for the struggling and shrinking public school system, is getting further authority under a measure signed into law March 17 that broadens state powers to intervene in the finances and governance of struggling municipalities and school districts. This could enable Mr. Bobb to void union contracts, sideline elected school-board members, close schools and authorize charter schools.

Mr. Bobb, appointed in 2009 by Democratic Gov. Jennifer Granholm and retained by Republican Gov. Rick Snyder, pledged last week to use those powers to deal decisively with the district’s $327 million shortfall and its educational deficiencies. Mr. Bobb raised the possibility of making unilateral changes to the collective-bargaining agreements signed with teachers less than two years ago.

He is also expected to target seniority rights that protect longtime teachers from layoffs and give them the ability to reject certain school placements.

Detroit Federation of Teachers officials called the initiative a poor idea, in part because nine of the schools slated for conversion to charter designation or closure were recently given new dispensation to relax work rules and haven’t had enough time to demonstrate their progress, they said.

I cheer Rick Snyder and anyone else willing to take public unions head on. Those unions are part of the problem (not all of it), and zero part of the solution.

As part of the solution (not all of it), we need national right-to-work laws, the scrapping of Davis-Bacon and all prevailing wage laws, and a complete end to collective bargaining of public unions.

Mike “Mish” Shedlock

Global Economic Analysis