Monday, December 15, 2008
Friday, December 12, 2008
Auto Bailout - now tell us what you really think...
What do real people think of the Auto Bail out? This is a representative form of government right? How's that car czar shaping up?
Saturday, December 6, 2008
Wall Street Bail Out - James Pinkerton Weighs In
James Pinkerton, Presidential Candidate Mike Huckabee Adviser, speaks to the beneficiaries of the government bail out.
Monday, December 1, 2008
Monday, November 10, 2008
Al Qaeda Network Exord - The Sword of Black Ops
“authorized its special forces to carry out more than a dozen raids in countries in the Middle East, Asia and Africa, four years ago as part of a stepped-up hunt for al-Qaida, according to a former senior CIA officer. Highly publicized attacks by American forces across the border from Iraq into Syria last month, and from Afghanistan into Pakistan's tribal areas in September, are just the tip of an iceberg of special military operations.”
-Ewen MacAskill in Washington writing for the Guardian UK.
We have Delta forces tromping around Syria, Seals swimming off the coast of Somalia. I am sure that some Green Berets are kicking some ass some where, but I want to know. I need details. The release further stated that many of these classified forays into non-war zone countries (all other countries except for Iraq and Afghanistan) were video taped by US predator drones.
“In 2006, for example, a Navy Seal team raided a suspected militants’ compound in the Bajaur region of Pakistan, according to a former top official of the Central Intelligence Agency. Officials watched the entire mission — captured by the video camera of a remotely piloted Predator aircraft — in real time in the C.I.A.’s Counterterrorist Center at the agency’s headquarters in Virginia 7,000 miles away.”
-ERIC SCHMITT and MARK MAZZETTI writing for The New York Times
If that is not bad ass (but also really scary) then I do not know what is. Hurry up and end Bush administration so I can see all your secrets. Where have my tax dollars gone? What black ops have I funded and how many bombs have I dropped, what are the fruits of this poisonous tree and are we making the kool-aid to drink from the bounty?
“Apart from the 2006 raid into Pakistan, the American officials refused to describe in detail what they said had been nearly a dozen previously undisclosed attacks, except to say they had been carried out in Syria, Pakistan and other countries. They made clear that there had been no raids into Iran using that authority, but they suggested that American forces had carried out reconnaissance missions in Iran using other classified directives.
According to a senior administration official, the new authority was spelled out in a classified document called “Al Qaeda Network Exord,” or execute order, that streamlined the approval process for the military to act outside officially declared war zones. Where in the past the Pentagon needed to get approval for missions on a case-by-case basis, which could take days when there were only hours to act, the new order specified a way for Pentagon planners to get the green light for a mission far more quickly, the official said.”
-ERIC SCHMITT and MARK MAZZETTI writing for the New York Times
No raids into Iran? Let’s see what the gov’t has to say once Bush is out.
Wednesday, November 5, 2008
Let's Hug It Out
Now, the best part about Rahm's brother Ari is that Ari is very much like his t.v. counterpart Ari Gold. Ari used to be one of the big agents at International Creative Management (ICM) in the late 90's before he got fired by ICM head Jeff Berg because they found out that him and some other agents were planning on starting their own agency (sounds like a storyline from season two of Entourage, huh). The real-life Ari has been sued for sexually harassing employees and has been known to walk into rooms by kicking the door open (also sounds like his t.v. counterpart). And let me tell you something, his brother, Rahm, the probable Chief of Staff for Obama, is like his brother.
Now, if you do not know anything about Rahm Emanuel, let me tell you a little bit about him. Rahm has been involved in politics since 1984 when he worked for Paul Simon's Senate campaign. Later on, he was on Bill Clinton's Presidential campaign staff as Director of Finance in 1992, and work for his administration as a Senior Advisor from 1993-1998. Currently, he is a Congressman from the 5th District in Illinois and is the Democratic Caucus Chairman.
But, what Rahm is known for is being a bulldog and his intensity. He is a take no prisoners politician that will fight for his causes till his last dying breath. He is very passionate about what he does and is doing. He reportedly told British Prime Minister Tony Blair, prior to Blair appearing in public with Clinton for the first time after the Lewinsky scandal, "This is important. Don't fuck it up." He is said to have "mailed a rotting fish to a former coworker after the two parted ways." On the night after the 1996 election, "Emanuel was so angry at the president's enemies that he stood up at a celebratory dinner with colleagues from the campaign, grabbed a steak knife and began rattling off a list of betrayers, shouting 'Dead! ... Dead! ... Dead!' and plunging the knife into the table after every name."
He also has been involved in some historic moments in this countries and the world's history. Rahm helped create and plan the 1993 Rose Garden signing ceremony after the Oslo Accords between Israel and Palestine. He directed the details of the ceremony, down to the choreography of the famous handshake between Israeli Prime Minister Yitzhak Rabin and Palestinian Authority President Yasser Arafat.
So you may be asking yourself at this moment what I am getting at. I think Congressman Rahm Emanuel is the perfect pick to be Obama's Chief of Staff. He is a fighter and at this moment, that is what our country needs. We need someone that will be in the backrooms and dark hallways cutting through the partisan bullshit and setting people straight. We need someone to tell people for both sides to "Shut the Fuck Up" when neccessary and light a fire under people's asses to make "change we can believe in" happen. So, I salute you Barack Obama for making a bold choice for, as some say, the "Co-President" of these United States.
Sidenote: Rahm Emanuel actually has a t.v. character based on him, Bradley Whitford's character, Deputy Chief of Staff Josh Lyman, on the West Wing. Also, as a child, he took Ballet, and was originally going to study it at Sarah Lawrence before he got bite by the political bug while in college.
Spit and Swallow of the Week 11-2 to 11-8
11/2/2008 - 11/8/2008
Spit:
- Florida passed ballot questions approving constitutional amendments to the state constitutions banning same sex marriages.
- Arizona passed ballot questions approving constitutional amendments to the state constitutions banning same sex marriages.
- California, wherein the state Supreme Court allowed for same sex marriage in May of this year, is in a tightly contested vote relative to banning same sex marriage. Same sex marriage will be banned in California. The California vote may have more significance on the course of same sex marriages in the USA than the State of Connecticut's recently having become the third state to allow for same sex marriages. As California goes so does the nation, shame on you California.
- Arkansas passed a ballot initiative that prohibits an individual who is co-habitating outside of marriage from adopting or acting as a foster parent to a child under the age of 18. although this law will apply to both heterosexual and homosexual persons, its supporters were clear that it was directed at same sex couples.
- Massachusetts: Maintained the income tax, banned Dog Track racing through a phase out measure to take full effect by 2010 and the state decriminalized marijuana making possession a $100 fine. Dealing is still a criminal offense.
- Barack Obama became the first black president of the United States. The fifth black Senator continued his historic rise. Drink it in and swallow down that smooth history in the making.
- The 14th amendment – sorry State Amendments above the 14th amendment should and will smoke all of these state laws. Please note the part of the 14th amendment that says “NO STATE SHALL.” If you are looking for a case on point to get cracking all you aspiring law students out there see the classic Loving v. Virginia 338 U.S. 1 (1967) For all those that voted to ban gay marriage you are the new age bigots, jim crows and Plessey v. Fergusons, feel proud.
- John McCain’s concession speech. I am being 100% sincere. The man reached me with his speech. If I had seen this much humanity, sensitivity and thought while he was on the campaign trail as opposed to the constant attack ads I may have voted differently this election. He was, dare I say, Presidential in his classy delivery and unifying message.
So there is the Spit & Swallow run down of the week. Big week, big election.
Keep on S-P-E-R-M-ing. It makes the world go round.
Tuesday, November 4, 2008
Sore Losers vs. Cowardice
Here's the deal folks, if you're guy loses or if my guy loses let it be known that you have the right to be pissed off because things did not go your way. It's only fair because we want to see things get better and getting pissed off and having fiery debates are great ways to cope. Let us not forget alcoholic binges, drug-fueled kicks and eating your feelings away--those are good, too.
Let it be known, that if I hear anyone say, "I'm moving because a terrorist-loving, spread-the-wealth, tax and spend Arab socialist is our president with a gaffe machine behind him" or "I'm moving because a quick-tempered, deregulating, erratic old man is our president and Caribou Barbie is behind him," then I will have this to say to you: Get the Fuck out! Don't care if your on my side or not. In a society where there is a free-flow of ideas there is no excuse to be giving up because one election has been lost. Adapt, make changes, evolve for the better.
The idea of America was for a peaceful co-existance of people who disagree, which is a great idea--probably the reason America has been so successful. There is never a reason to give up on your best interest. If you wanted to move to Italy, then fine go ahead, I have no problem with that. My problem comes with the idea that you are giving up because it looks like the fight will be too hard. We were founded on impossibilites. Man up.
Election 2008: My running voting diary
6:45am - My girlfriend wakes me up to let me know that the power has gone out in our apartment building. I kindly ask her to wake me up about 7:30am. As, I fall back asleep, I wonder if the power failure if cause by either the McCain or Obama campaign trying to mess with people on election day. Voter tampering?!?!?!
7:13am - I am woken up again. This time it is by my dog who has jumped on my bed and decided that my chest seems like a good place to stand.
7:21am - Hoping that the lack of power has not effected the hot water in my building. It hasn't. Thank God for natural gas. Shower time.
7:47am - Off to the polling place. Lucky for me, it is just around the corner from my apartment. As I drive by my polling place, I notice a line stretching two blocks down the road. SHIT. I am never going to find parking. Wait, there's a spot. Score!
7:51am - I cut about 10-15 people in line because my girlfriend went about 20 minutes a head of me and I jumped in next to her. I immediately give her a quick peck on the lips to let people behind her know that we are together.
7:55am - I convince my girlfriend that she should come back after work to vote because we are going to be in line for at least an hour and she needs to be at work by 8:30am. She agrees with me, and heads off to work. All the people in the line I just cut about 5 minutes ago are now giving me the evil eye.
8:02am - I remembered to bring my I-Pod this time in anticipation of the long wait. I put on a little Red Hot Chili Peppers and start enjoying a little California sun. After sizing up the length of the line, I determine that I should be all done voting by at least 8:45.
8:11am - The line is barely moving. I start to notice what everyone in front and back of me are doing. I have two older men standing in front of me shooting the shit and talking about the Bush-Kerry election. One man, wearing a Santa Monica hat, is doing all the talking, and the other man has a tube coming from his nose which is hooked to an oxygen tank. Apparently, old people do come out and vote. The woman behind me that I just cut about 15 minutes ago jumps on her cellphone.
8:17am - The line is barely moving. I have just realized that I am going to be here longer than I thought.
8:22am - The woman behind me on her cellphone apparently does not realize she is talking on her phone in public. So far, she has called three different people just to tell them that she is in line waiting to vote. She has also mentioned to all three of them that she has horrible cramps. Thank you for that for that, Fatty.
8:29am - Santa Monica hat guy in front of me will not stop talking. Not only will he not stop talking, he laughs after everything he says whether it is funny or not. And as he is laughing, he is looking around at everyone to see if they are laughing also. Time to turn up the sound on my I-Pod. Save me Anthony Kiedis.
8:36am - I am starting to get frustrated standing in line. How can it take people so long to vote. Are you just reading up on the propositions and measurements while you are in the voting booth? Are you really still undecided and flipping a coin to see who you are going to vote for? WTF?!!?!?
8:41am - Running tally for phone calls made by the woman behind me to tell people she is voting and has cramps: 8. Take a fucking Midol already.
8:45am - Will you stop looking me after you say something Santa Monica hat guy. I am not going to acknowledge you because then you will start talking to me. You have a newspaper in your hand, why are you not reading it? At the very least, use the newspaper to give yourself a fatal paper cut.
8:46am - Why won't this line move?!?!?!?!?!
8:51am - Hey! I think that guy just rolled up with himself and two kids just cut the whole line. I do not care if you have two kids with you, get in line like everyone else or get one of your stupid neighbor's teenagers to watch your snot nosed children. (Yes, I realize I am being hypocritical since I cut the line myself about 50 minutes ago, but in my defense, I did not cut the whole line, just about 10 people, plus my girlfriend left, so it is kind of a wash)
8:59am - I finally made it inside the polling building. I can see the light at the end of the tunnel.
9:00am - SHUT THE FUCK UP Santa Monica hat guy. I have had to listen to you for an hour already. You have said nothing of substance or entertaining for that matter. SHUT UP, SHUT UP, SHUT UP!
9:02am - I see that guy with his two kids coming out. I decided not to move out of the way so he can get by. He literally has to try and squeeze in between the wall and I. He says excuse me, but I pretend not to hear him because my I-Pod is too loud. It is all about the little victories in life.
9:04am - Cellphone woman is still talking on her cellphone. Running tally for people she has called to tell she is voting and having cramps: 11. I hope there is a proposition on the ballot I have not read about that bans people like her from talking on cellphones in public.
9:08am - Finally! I'm up.
9:10am - Now I understand why this is taking so long. I have to tell three different people my name and other information. Person 1 - my name, Person 2 - my address, Person 3 - my name and address. Now this would not take that long, if the people crossing off names where not 10 minutes away from dying. Honestly, if you are older than dirt, there is no way you should be in charge of the voting process. Isn't there an early bird special that you need to be at or someone that you need to cut off while driving.
9:13am - I have finally checked in, but now I have to stand in another line to wait for an open voting booth to open up.
9:14am - FUCK! Santa Monica hat guy is in front of me again and is still talking and laughing after everything he says.
9:15am - DOUBLE FUCK! Cellphone woman is now behind me. She is no longer talking on her cellphone, but text messaging people and reading what she is typing out loud. I...am...voting...and... have... bad... cramps...ttyl. How about tty-I-am-going-to-kill-you. I hope your phone gives you cancer.
9:17am - I watching this woman in a Cosby sweater continually fuck up on her ballot. She is on ballot number three because she has check both the yes and no box on a few different propositions. I have just witness someone that should not be allowed to vote. California ballots are not hard to figure out. There is no hanging chads or connecting the lines. It is this simple: Fill in bubble 120 if you vote yes, or fill in bubble 121 if you vote no. This Cosby sweater woman should be taken out back and shot for messing up three times in a row. Do you really want her to be having children or having a choice in who the next President is? I think not.
9:21am - I made it into the voting booth. I have just noticed that the little table in the voting booth only comes up to my nuts. Apparently their is a horde of midgets voting this year.
9:22am-9:31am - VOTING
9:32am - I have finished voting, cast in my ballot, and got my "I Voted" sticker. Yes, it took me 9 minutes to vote. It is not because I did not know who or what I wanted to vote for, but because I had to vote for about 40 different things: about 10 elections, 12 propositions, 10 measurements, etc. So if you take the combination of the amount of things you have to vote for and the amount of morons that vote (i.e - Cosby sweater woman), I totally understand why it took so long. Time to go to work.
Final thoughts on voting - I truly enjoy voting. Once I cast my ballot and put my I vote sticker on, I am immediately filled with pride. I feel uniquely American. Whether my guy wins or not, I feel like I have done my duty as an American citizen. So for those of you that do not vote, to put it simply: GO FUCK YOURSELF. Take an hour and a half out of one day every four years and participate in something that people are dying for to have: The right to have your voice heard.
P.S. - I always find it quite funny that a lot of the polling places are at Churches. Mine was at a Baptist Church. A big part of our country is separation between church and state, but when you go to cast your vote, you go to God's house. Thank God I am not religious.
Monday, November 3, 2008
A few thoughts for Election Day '08
1) If you win, please gloat and grandstand. There is nothing I would love to see more than McCain and/or Obama rub the other guys face in it if they win. Whether it is a touchdown dance, or just general smack talk, please get up in front of the nation and say "Hey, this guy spent the past few months basically trying to make me out as the worst human being ever and guess what "HOW DO YOU LIKE ME NOW?"".
2) If you lose, please be a poor sport. You have spent 20 months of your life (possibly more) and millions and millions of dollars trying to achieve your life long goal, and you failed. So, please whoever loses, please say something after the election like John Lackey said after the Angels lost to the Red Sox again. Say something along the lines of "The better man lost". Or "the other guy winning was just a fluke". Do not call the other guys to concede and congratulate him. Call him, tell him he is a dickhead and hang up before he can respond.
3) Whoever wins, please give your acceptance speech drunk as shit. Anytime someone or some team wins a championship, the first thing they do is pop open some champagne, spray it on each other, then get wicked drunk. Nothing would be better than seeing Obama give his victory with a glass of cognac or McCain come up to the mic with a bottle of scotch. This moment is basically the high point of your professional life, so why not celebrate it how American's actually celebrate things: Drinking till you cannot see anymore.
4) Wouldn't it be sweet if whoever won pulled a John Elway: Leave while you are on top. Nothing was better than seeing John Elway retired after winning his second Super Bowl in a row (and first Super Bowl MVP). He probably could have played for 1-2 more years, but there was no reason for him to do so. He walked away while he was on top of the mountain. I think whoever wins, should consider the same thing. You just won the election and have peaked professionally. There is nothing more for you to do or accomplish, so might as well retire before actually taking the oath of office and start getting criticized no matter what you do. Leave while you were on top and people wondering "What If?".
5) Whoever wins, divorce your wife before January 20th, 2009. Do what actors do, dump the person who was with before you were successful and then start dating the hottest girl possible that is only dating you because you are successful. JFK proved you can use the presidency to bang ridiculous hot chicks (i.e.- Marilyn Monroe) that would be otherwise out of your league if you were not president. It would be fantastic to see Barack show up on inauguration day with Beyonce or McCain rolling into the Oval Office on the first day with Scarlett Johansson. Plus, having a hot first lady would probably stop some disasters because the other guys would be too busy staring at your hot wife.
and Lastly,
6) To Whoever wins, do not fuck shit up like the last guys did. Seriously. I am not kidding. Don't be that guy. There should be no reason why I should be thinking, "Canada. Seems like a fine place to become a citizen of."
Thursday, October 30, 2008
I threw up in my mouth a little
http://money.cnn.com/2008/10/30/news/companies/exxon_earnings/index.htm?cnn=yes
Yes that is right.
The national economy is in a recession, unemployment is up. States are facing financial troubles, and companies are laying off people. Worst-of-all I was denied my pay raise last month, because my job couldn't afford it! American Express is laying off over 7,200 people.
But it is OK--- Exon mobile had record profits of $14.8 billion
upon reading this story I threw up in my mouth, just a little....
See for yourself -

Sunday, October 26, 2008
Voting Rules and Absentee Ballots - GO VOTE NOV 4 2008
Every state has different rules related to voting and what is required on election day in order to be able to vote at the polls. Please take the time now to look at your states voting requirments and see what forms of identification, what voter cards, driver license or what ever other form of verification is necessary to pull the lever, punch the card, draw the line or fill in the bubble. Do not let a technicality take away your right to choose who the leader of the country, your state representative, potentially your state senator for the next 4, 2 and 6 years.
Voting is a right to be exercised liberally. The vote is your voice; it is the most powerful mechanism that allows the citizens of this United States to show their support and dissatisfaction with the people we choose to lead and make difficult decisions in our stead.
Election Day is Tuesday November 4th 2008. Absentee ballots for non-military personnel have to be in before this date. Go online, find your state election site (should have a .gov ending to the URL) figure out the rules. Take 5 mins and do the research because it will make you feel good for the next 4 years (or the next 2 if you are a Mid-Term Congressional participant, which you should be).
Example: Hypothetical state only takes absentee ballots received by Oct 31 at 5:00 pm, US Mail only, clearly marked with a circle for elected official, marked with a medium black pen.
Lotta rules, break em down, follow slowly, vote sooner rather than later. Unfortunately we live in a country where voting is not a priority. But once everyone does vote and we put the men and women in office that we truly believe in and who truly represent the people, it is possible that substantive change can be achieved.
For starters, how about after this election, we all write a letter to our State Representatives and Senators and ask that election day be moved to a Saturday. Tuesday? C'mon. Let's vote now to empower ourselves, and future generations later.
Vote, Vote, Vote!
Have non-spam voting recommendations, horror stories, success stories? Leave em in the comments.
Thursday, October 23, 2008
McCain Agrees Western Pennsylvania is Racist... mouth not connect to brain.
Mkay, so here is the set up. John Murtha said that people in western Pennsylvania were racist because they were old. John McCain agrees in his speech and then promptly goes crazy.
Tuesday, October 21, 2008
Get the shovels out Feminists Palin is about to dump some wisdom on women –
When the Irish got off the boat they thought they needed other Irishmen to protect them, who else could? This led to a process of unaccountability and waste as the politicians did not have to stand on or by their ideas but simply on immutable characteristics.
Palin wants to make the false anology that she stands for women’s rights simply because she as a woman. This wrongly assumes that her opinion of what women’s rights should be parallel your view of what women’s rights should be.
Palin is looking to eliminate abortion rights for women, taking away their freedom of choice with respect to issues related to their own autonomy related to their body. She wants to increase the province of government by allowing governments to step into the private lives of women and make this decision for them.
Palin should be rowdily posh poshed on her attempt at portraying herself as a feminist or as standing in line with women’s rights ideals.
Excerpt of article below:
Feel free to read while sitting on the toilet with your computer on your lap.
----------------------------------------------
Palin's speech today was reminiscent of her earliest remarks after joining the Republican ticket, when she sought to appeal to female voters -- and in particular -- Democrats who backed Clinton in the primary. Palin abandoned mentioning
But attempts to woo
Palin’s remarks differed widely from her current stump speech. Gone were attacks on Obama centered on his ties to a terrorist or a community group accused of voter-registration fraud. Her attacks from earlier Tuesday -- suggesting Obama was unqualified as commander in chief -- were nowhere to be found.
Campaign aides called her remarks a “closing argument,” and said it was intended to highlight a perceived vulnerability for Obama and his running mate, Sen. Joe Biden.
"Our opponents think that they have the women's vote all locked up, which is a little presumptuous,” Palin said. “A little presumptuous since only our side has a woman on the ticket.”
The Real Plumbers of Ohio
The Real Plumbers of Ohio
By PAUL KRUGMAN
Published: October 20, 2008
John McCain’s strategy, in this final stretch, is based on the belief that Republicans can still pursue plutocratic policies while claiming to be the party of regular guys.
Forty years ago, Richard Nixon made a remarkable marketing discovery. By exploiting America’s divisions — divisions over Vietnam, divisions over cultural change and, above all, racial divisions — he was able to reinvent the Republican brand. The party of plutocrats was repackaged as the party of the “silent majority,” the regular guys — white guys, it went without saying — who didn’t like the social changes taking place.
It was a winning formula. And the great thing was that the new packaging didn’t require any change in the product’s actual contents — in fact, the G.O.P. was able to keep winning elections even as its actual policies became more pro-plutocrat, and less favorable to working Americans, than ever.
Sunday, October 19, 2008
What is the financial instrument a derivative?
The news programs have been giving an answer so boiled down that it is really useless information for most people and online sites have been giving answers that are overly complex the average person may not really get what is going on in the grand scheme. I tried to strike a middle line.
Purpose of a Derivative – Share the risk associated with lending to customers to increase the lenders ability to access additional capital and stream of income value that was previously dormant or untapped.
A derivative has two areas of value:
- Capital Value
- Steam of Income Value
A derivative is an instrument that on its own is worthless, the instrument DERIVES its value from underlying physical capital (goods, real estate, products) that the derivative is supposed to represent. Only derivatives represent thousands of units of capital in one complex bundle of papers. In this instance in history the capital is the houses. The market agrees on a price of the underlying physical goods and that sets the price of the derivative instrument. (important for later on in the example below)
Stream of Income Value:
Many derivatives will have a stream of income value as well. As stated above, the houses are the physical capital, but to get the capital. A customer has to give up a small amount of money (principal) AND promises contractually to pay interest to the lender on the money the lender gives the borrower to acquire the house (STREAM OF INCOME)
A derivative has two areas of risk:
Capital Value Declines
Stream of income Stops
Let’s look at a hypothetical to see how the Housing Dilemma happened.
EXAMPLE:
John wants a house. He only has $1. The market agrees that the house costs $101 (price at which buyers are willing to buy and sellers are willing to sell). John goes to ABC Bank and offers to give the bank his $1 and a promise to pay 10% interest if they will lend him the $100 to get the house.
ABC Bank makes a contract with John. He has to pay interest 10% in year one and 20% going forward on the $100, STREAM OF INCOME to ABC Bank.
So John now has to pay $10 / year (to keep it simple)
If John fails to pay then ABC Bank gets to take the house worth $100 CAPITAL VALUE with the plan to resell the home to break even or make a little money in a market that has grown in value. In exchange, John has to pay interest on the loan but he gets to live in the house and eventually in a functioning market he will own the house.
ABC Bank gives John a loan (THE RISK) & takes the interest obligation (THE STREAM OF INCOME) and the physical stake of bank ownership on default (CAPITAL VALUE) in his house. If he defaults on the interest payments the bank gets the house. ABC Bank does this with John and bundles his home and his loan up with thousands of other Americans.
SALE OF THE DERIVATIVE -
ABC Bank not wanting to hold all of this risk on their own sells the Derivative to other banks. The other banks buy based on the value of the STREAM OF INCOME and based on the value of the underlying CAPITAL VALUE of the homes on default. However, these other banks who do not know John and who have not seen his house are also buying a piece of the risk that he will default.
The banks and financial institutions buying these derivatives are now holders of Derivatives.
Problem in Hypo land.
The interest rate is too high for John. Initially he can pay the $10 but there was a clause in the lending contract that says after 1 year the interest rate John has to pay is 20%. John has either lost his job, had no job or miscalculated his ability to pay.
He cannot pay, STREAM OF INCOME to the bank is gone. John is also now in default. ABC Bank takes the house. This happens to many people. There are now many many empty houses on the Market. People do not need homes. There is no demand. Demand falls and the prices of homes fall. As well, in the initial pricing of houses the market was wrong. The price was too high and was artificially inflated by a market belief that the growth rate in real estate would be sustained and that people would not default due to the nature of the capital (a HOME).
A house is now worth 10 dollars. The bank lent $100 as that was what the house was valued at. The derivative has now lost almost all of its value.
The other institutions who did not know John or the home hold a close to worthless financial instrument and there are no buyers. The spreading of the risk has caused a problem as the banks may not have the capital to cover the loss as they did not expect the losses on the home value to be so large.
If you have any further questions, comments or corrections email lucklesshero@gmail.com
Thursday, October 16, 2008
Letter to my Congressmen - I never received a reply.
Sorry I am not hand writing this letter, but to be frank I plan on sending this question / recommendation to my U.S. Congressional Representative in addition to your office.
I am writing this letter as I am concerned with the action that Congress is taking with respect to the funding and promotion of clean energy. I say clean energy because I do not want a response that dives into the minutia of “alternative energy.” I do not consider the liquefaction of coal or the use of switch grass or corn to make bio-fuel viable options, particularly after the studies that question bio-fuel production to be carbon positive over its production lifetime. Those options seem like Band-Aids not answers to a growing problem. As well, I am a firm believe that the shift of land use from the production of food to the production of fuel crops will increase prices of groceries and other simple commodities that will negatively impact lower income Americans.
This letter was spurred by an article that I read from January or February of 2008 about Abu-Dhabi, capitol of the United Arab Emirates, and how a carbon free city is being constructed. The goal of the city is to be carbon neutral and to also use 60% less water than the average consumption levels of a comparable per capita urban area. The venture seems to be placing the UAE on the bleeding edge of the future of clean technology. The steps they are taking seem to be placing them at the forefront of a money making machine that is highly marketable and environmentally sound. The Middle Eastern country will also be garnering world accolades for its “green” initiative.
Secondly, the United Arab Emirates just built the largest hydrogen producing plant in the world. From popular news media outlets to simple commercials on the TV it seems that everyone wants a hydrogen powered car.
I believe that the United States should be leading this eco-fuel charge and that the USA should be positioning itself to reap the benefits, both environmental and economic, of the changing energy landscape. When I was growing up I was always told that the United States was the land of innovation and that we are the world leaders of new technology. I see this truth waning and slipping into darkness.
With regards to the green technologies and the hydrogen production capability the UAE’s technological front runner status will be established, position the country to continue their dominance in the energy production and sales arena. My concern is that this money could potentially end up in the wrong hands. I believe we are waging a war to stop such an occurrence.
In the economic interest of America, in the homeland defense interest of America and for the simple pride and patriotism of being an American I ask you to push for more money and resources to be allocated to clean technologies so that the United States can be in the Alpha position in this technological race.
CC: Representative Joe Pitts of Pennsylvania
CC: Senator Robert Casey of Pennsylvania
CC: Senator Arlen Spector of Pennsylvania
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