Archive for November, 2011

wall street doesn’t get it

Posted in Uncategorized on November 21, 2011 by a4synapse

Great article a few days back at Reuters here. It talks about the ways in which bankers have no idea what’s going on with the rest of the country.

David Mooney, chief executive officer of Alliant Credit Union in Chicago, says: “I don’t say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization.”   …………

To put it bluntly, many on Wall Street still see the events leading up to the financial crisis as a case of banks having legitimately sold something – whether it be mortgages or securities backed by those loans – that someone wanted to buy.        ………….

Maybe it is just the ethos of Wall Street, where success is defined solely by who makes the most money, that makes it hard for financiers to feel they’ve wronged anyone. But in a time of 9 percent unemployment and 15 percent of U.S. citizens receiving food stamps, some Wall Street alums say the financial elite are doing themselves no favors by giving the appearance of shrugging off the current mood.  ………..

Some of the disconnect is simply a matter of lifestyle and the fact that the super wealthy really do live differently from everyone else. Hedge fund managers and bankers fly around on private jets, live in palatial penthouse apartments overlooking Central Park and have second homes in the country.     …………

former top Pacific Investment Management Co executive Paul McCulley – “Our society was ripe for a convulsion about social justice, and Occupy Wall Street was the catalyst for that,” says McCulley. “New York can be very insular. It is not the real world and neither is Newport Beach.”  ………

Now that he’s no longer working for PIMCO, McCulley is a bit more free to speak his mind. And he says the only way to jumpstart the U.S. economy is for the federal government to get behind a serious program to encourage consumer debt forgiveness and principal reductions on mortgages by banks.     ………..

McCulley noted that mortgage firms Fannie Mae and Freddie Mac have been propped up by about $169 billion in federal aid since they were rescued by the government in 2008, yet there’s a “a moral overtone” to the argument against reducing mortgage debt burdens for individual borrowers.

Blinkers. Blinders. This typically doesn’t end well.

So, is the private sector better at asset allocation? Or does the public sector do it better? Two different mindsets, two different objectives. They overlap and are intertwined to an obscene degree, and that degree of interconnection may have gone past the point of no return. The system is out of balance. Every graph/study/analysis I’ve seen says that the boat is tipping, and no one understands what happens when it tips.

 

GOP = Party of the 1%

Posted in Uncategorized on November 13, 2011 by a4synapse

Tim Dickinson has written a comprehensive and informative article in Rolling Stone on how we got here: down the rabbit hole.  It’s here, and you should read it, just because, or because you view it as a duty of citizenship in the United States.

“We have moved toward a plutocracy,” Warren Buffett warned in a recent interview. “As people have gotten richer and richer, they have been favored by taxation – and have gotten richer to a greater degree.”

“The Republican Party went on a tax-cutting rampage and a spending spree,” says Rhode Island governor and former GOP senator Lincoln Chafee, pointing to two deficit-financed wars and an unpaid-for prescription-drug entitlement. “It tanked the economy.” Tax receipts as a percent of the total economy have fallen to levels not seen since before the Korean War – nearly 20 percent below the historical average. “Taxes are ridiculously low!” says Bruce Bartlett, an architect of Reagan’s 1981 tax cut. “And yet the mantra of the Republican Party is ‘Tax cuts raise growth.’ So – where’s the fucking growth?”

What surprises me: Those who believe they are in the fabulous 1% seem to think that this party will go on forever; and if not, they can go somewhere and the inevitable implosion will not touch them. Or if you watch Stephen Colbert, they think they can build an island and live there like it’s a libertarian utopia. Sure.

The Steps (as well as I can render them)

1. Kennedy administration: top tax rate @ 70% (post WWII taxes paid for infrastructure, science & education

2. late ’70’s high inflation pushed up taxes for many, leading to an across-the board-cut down to 50% -> ‘Starve The Beast’

3. force cuts in federal spending by bankrupting the country; create fiscal problem by slashing taxes

4. 1982 – undo the Reagan tax cuts and raise taxes (embraced by Reagan) – raised taxes 11 times in 8 years;

5. birth of Grover Norquist (fiscal terrorist) and Americans for Tax Reform

6. Bush 41 raised taxes to deal with soaring deficit – led to his defeat in ’92

7. tax hike in 1993 lead to 3.2% growth – by 1997 federal budget goes into black

8. 1994 – eliminate taxes on investment income and estates: capital gains to 20%

9. the tax advantage helped fuel the dot-com bubble and boosted housing transactions by 17% ~ 2007

10. cut in inheritance taxes doubled the amount passed on to the heirs of wealthy families; Glass Steagall repealed

11. check out the ‘drafting error’ on page two of the article – which created an $880 million windfall for the wealthiest     families

12. ‘Tax Harmonization’  was defeated by Bush and corporations were allowed to offshore profits and onshore deductions

13. ‘trickle down’ tax cuts do not juice the economy: they create bubbles and balloon the deficit

14. 2001: dot-com bubble bursts and 2011 tips the economy into recession; Bush/Cheney cut taxes

15. 2002 deficit-financed tax cut for wealthiest

16. 2002 American Jobs Creation Act so that corporations could repatriate profits tax free ( up to 92% of that money went to executives and stockholders

17. Scott Brown and The Volker Rule

There are all sorts of charts and statistics to support Dickinson’s argument and I believe there is no evidence or logic to refute his positions. Some of the charts are in Dickinson’s article. If you need more information, google Bruce Bartlett, or Paul Krugman. Bartlett is conservative and cogent. Krugman is liberal and maintains that the facts have a well-known liberal bias.  Educate yourself, because you get the government you deserve.

A good idea

Posted in Uncategorized on November 8, 2011 by a4synapse

 

 

 

a job exchange site with bidding:  a good idea.

BC11

Posted in Uncategorized on November 8, 2011 by a4synapse

So, that was just about the weirdest Breeder’s Cup ever.

Not much happened the way anyone was expecting it to happen. And a lot happened in ways that bummed.

Secret Circle ran like his hair was on fire. He’s in good hands. I expect great things from him next year. I had hoped Trinniberg would have more to show. I’m hoping he improves; I loved his Daddy Teufelsberg. And Shumoos? Great!

I was hoping Turbulent Descent would win the Sprint; hard to figure what happened there.

Lost bets on It’s Tricky and Harmonious (sentimental, yes, always a mistake).

After watching Royal Delta’s works, it was clear she was sitting on a monster race and it was a pleasure to watch her uncork it.

After Day one, it seemed that something was up with the track and the turf course. Good horses didn’t fire; horses that hadn’t won in months jumped up and fired. Day Two, I watched. Almost as much fun.

Happy to see Afleet Again take the Marathon.

The turf races were nice to watch, but I had no idea how to handicap them. European horses are tough to track, but they’re always dangerous.

Amazombie is a fighter, as is his jockey Mike Smith. I have a great fondness for Jackson Bend and Giant Ryan.

Union Rags was the best horse in the race and has been beating better than Hansen, who had the best trip. The track beat Union Rags.

Court Vision returned $131.60 for $2.

Drosselmeyer returned $31.60 for $2.

All in all, strange. There is also the fact that many (and I think an unusually high number of) good horses were injured and absent or dead.

And I still don’t understand what was going on with the track. People said it was like peanut butter. Next year Santa Anita will be a big factor. I hope more horses make it through.