Taking Blue To The Extreme

September 19, 2013

The answers may surprise you – and don’t blame Coleman Young

How Detroit Went Bankrupt

The story of Detroit’s decline has been told and retold so many times now that you’d be forgiven for assuming there’s nothing more to say. But the Detroit Free Press has put together a new, comprehensive financial history of the city from 1950 to the present, gleaned from tens of thousands of pages of archival data on the city’s finances. It provides a much clearer picture of the city’s collapse than anything we’d seen before.

It appears that the city took all of the hallmarks of blue governance to extremes. For years, it tried to address its revenue shortfall by raising taxes, which drove residents out of the city and shrunk the tax base in the process. Detroit lost 61 percent of its residents between 1950 and 2010, and the total value of its property fell from a peak of $45 billion to $9.6 billion in 2012. Meanwhile, even as the city’s revenue base was imploding, public employee benefits remained generous and in some cases even expanded.

The Free Press notes that there were a few periods of hope during thee postwar period when the city’s finances were relatively strong, but each time the city squandered these opportunities and used its good standing to borrow more rather than address the core problems that got it in the mess in the first place. . . . The city has paid a heavy price. Today, Detroit has more pensioners than employees, and a debt that is more than twice what it had in 1960. It spends considerably more on police and fire retirees than active workers. And despite the fact that the city has the highest income and property taxes in Michigan—by a wide margin—the state’s inflation-adjusted revenue is lower than it was in 1960.

And the similarites to Obomba??? Do the math.

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Illuminating!!!

September 13, 2013

MICHAEL BARONE: Illuminating observations on the financial crisis.

Two Bush administration appointees, Director of the Economic Council Keith Hennessey and Council of Economic Advisers Chairman Edward Lazear, have prepared an interesting paper with 19 observations on the financial crisis. You can access their summary or the pdf of the paper.

I found a couple of their observations particularly interesting. They link the financial crisis to a large inflow of capital into the United States in the mid-2000s–a contrast to the usual pattern in which capital flows out from rich countries to poorer countries. As a result, they write, “cheap credit made risky investment seem profitable.” Risky investment particularly in mortgage-backed securities, which government regulations treated as low-risk investments, incorrectly as it turned out.

Another interesting point. They contrast what they call the “domino theory” and the “popcorn theory” of financial shocks. The two theories produce different government responses. If you believe in the domino theory, you rescue one financial institution lest its failure lead to loss of confidence in others or to the failure of its counterparties. If you believe in the popcorn theory, you believe that the cause affects all or many financial institutions, and saving one does nothing to prevent the failure of others.

Very interesting ….

 


Flashback: EXCLUSIVE – U.S. to let spy agencies scour Americans’ finances

June 7, 2013

Go way back to March 13, 2013. Yes it was Obama who was saying this. The NSA can now have your financial data.

And Obamacare will give the feds your health tata. Hey folks when do you just say no?

The Reuters article title — “EXCLUSIVE – U.S. to let spy agencies scour Americans’ finances”

The Obama administration is drawing up plans to give all U.S. spy agencies full access to a massive database that contains financial data on American citizens and others who bank in the country, according to a Treasury Department document seen by Reuters.

The proposed plan represents a major step by U.S. intelligence agencies to spot and track down terrorist networks and crime syndicates by bringing together financial databanks, criminal records and military intelligence. The plan, which legal experts say is permissible under U.S. law, is nonetheless likely to trigger intense criticism from privacy advocates.

Financial institutions that operate in the United States are required by law to file reports of “suspicious customer activity,” such as large money transfers or unusually structured bank accounts, to Treasury’s Financial Crimes Enforcement Network (FinCEN).

The Federal Bureau of Investigation already has full access to the database. However, intelligence agencies, such as the Central Intelligence Agency and the National Security Agency, currently have to make case-by-case requests for information to FinCEN.

The Treasury plan would give spy agencies the ability to analyze more raw financial data than they have ever had before, helping them look for patterns that could reveal attack plots or criminal schemes.

The planning document, dated March 4, shows that the proposal is still in its early stages of development, and it is not known when implementation might begin.

 


The Monarchs of Money

May 4, 2013

The world’s central banks have printed unimaginable amounts of money in recent years – “these guys are really more powerful than the government.” Neil Macdonald explores what this means for the global economy and for your financial well-being – “can you imagine if the American public knew there was this ‘club’ that met secretly in Switzerland and made decisions that dramatically affected their lives, but we’re not going to tell you about it because it’s too complicated.”

This brief documentary should open a few eyes to the reality behind the world’s most powerful (and real) cabal.

Open your eyes, you sleepy sheep. Gold PHYSICAL GOLD is your only way out of this … That is the only thing that they cannot print.

And you want to know why the federal government is trying to take your guns.


GAO REPORT: FEDERAL SPENDING IS ‘UNSUSTAINABLE’

January 20, 2013

‘Serious financial management problems at DOD’ cited in annual document.

Who says Obama is not a good president kardashian. Appears we have never seen anyone acting so irresponsible elected by the drones of our society, the moochers and looters.

WND reports:

Bill O’Reilly comments on a new GAO report which says the U.S. economy will collapse if federal government spending and borrowing policies are not changed.

A newly released GAO report finds that “…absent policy changes…the federal government continues to face an unsustainable fiscal path.” The Government Accountability Office completed its annual audit of the government and the news is just sad. It is no surprise, and it won’t be reported by the mainstream media [properly], but it is sad nonetheless.

The report gives a jab at those in the government who do not seem capable of providing accurate financial information. The report said that the federal government “must have ready access to reliable and complete financial and performance information.” This information is needed when audits are done. The “weaknesses” cited in the report are astonishing, and abundant.

It is no surprise that for the non-accountable federal government, tracking tax-payer money would just be an annoyance. Nobody will report on the fact that the American economy is imploding, so why should the government bother to maintain financial records?

The main problems cited were “serious financial management problems at DOD,” the federal government’s “inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies,” and the federal government’s “ineffective process for preparing the consolidated financial statements.” Pathetic.

To add insult to injury, President Obama has repeatedly made it clear that he is not interested in negotiating with Congress over raising the debt ceiling. The GOP has repeatedly asked to negotiate spending cuts and entitlement reform, but despite Obama’s position in 2006 that raising the debt ceiling was a sign of “leadership failure,” he has clearly changed his mind while he holds the purse strings.

The GAO report should be a wake-up call.

Is America going Galt??? Meet you at Galt’s Gulch…


Shut Up And Get To Work!!!

December 13, 2012

It seems the AsiaPac central bankers did not get the ‘shut up and print’ memo as today during another speech, an Australian central banker followed Hong Kong’s lead and “pronounced quantitative easing as potentially harmful and the volatility-dampening effects of excess monetary policy as “ultimately inimical to financial stability and hence macroeconomic stability.”

In the speech below Glenn Stevens (RBA Governor) provides some much-needed doses of sanity to the grossly addicted world desirous of moar money printing.

 “Central banks can provide liquidity to shore up financial stability and they can buy time for borrowers to adjust, but they cannot, in the end, put government finances on a sustainable course… They can’t shield people from the implications of having mis-assessed their own lifetime budget constraints and therefore having consumed too much.

Why are these AsiaPac bankers breaking ranks with the status quo? Perhaps they see a looming threat and prefer to front-run their governments’ demands to “get to work”.

Employment is when you have more customers to service, not want to borrow more money. All this does is make it easier to payback in cheaper dollars. Does nothing for employment…

Illiterate Obama voters that means your savings account it worth less. So quick pay off your credit card before it all crashes on your heads. Run don’t walk, do it now. Me I’ve gone to cash, you would be surprised at how much the discounts are for cash. Why, just yesterday ….


Strap Yourselves in: Jim Rogers Explains Why We Are Going to Have ‘Financial Armageddon’

June 29, 2012

Here it comes, at least to well respected Jim Rodgers. and he should know.

Leaders of the 17-nation eurozone announced on Friday a plan to rescue their failing banks with cash normally reserved for fledgling governments. When the “recapitalization” (i.e. bailout) plan was unveiled, markets responded very, very well.

However, despite the positive market reaction, there is one veteran businessman who thinks the deal is a big mistake. In fact, he thinks it’s only making things worse. According to Quantum Fund co-founder, free market advocate, author, and regular lecturer of finance at the Columbia University Graduate School of Business Jim Rogers, the EU’s decision to recapitalize its banks won’t do anything to fight off the oncoming “financial Armageddon.”

“Just because now you have a way to get [EU governments] to borrow even more money, this is not solving the problem, this is making the problem worse,” Rogers said during an interview on CNBC on Friday.

It’s a simple concept, stop spending money you don’t have. Only States which can prinit faux paper can do it. Sort of like Margret Thatcher said, Socialism is fine, until you run out of other people’s money to spend.

“People need to stop spending money they don’t have. The solution to too much debt is not more debt. All this little agreement does is give them (banks) a chance to have even more debt for a while longer,” he added.

Rogers went on to argue that the deal does very little to improve the finances of crumbling nations such as Greece and Spain and that governments need to stop rescuing failing banks, even if it results in “financial Armageddon.”

“What would make me very excited is if a few people went bankrupt or a few people started paying off their debt. We are going to have financial Armageddon anyways, when the rest of the world is not going to give these people any more money,” he said.

“What are you going to do in two, three, four years when the market suddenly says ‘no more money’ and the Germans don’t have more money, and the American debt has gone through the roof?” he asked.

The businessman went on to explain that the positive reaction the markets are currently experiencing will be short-lived.

“How many times has this happened in the last three years — they (EU leaders) have had a meeting, the markets have rallied, two days later the market says wait a minute this doesn’t solve the problem,” he said.

Video at The Blaze:


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