Nathan R. Jessup

Posts Tagged ‘national deficit’

TARP Alternative By Lt. Daniel Kaffee (Guest Author)

In Congress, Finance, Government Lies, living free, Obama, Socialism, US Senate, World News on February 3, 2010 at 3:27 pm

A refreshingly unique perspective by Lt. Daniel Kaffee. Daniel Kaffee, a life-long friend,  has an extensive background in finance and will be guest-authoring at the Raw Deal from time to time. I am honored to share his practical insights with you, my loyal reader.

Key Facts & Assumptions

◆ The TARP has been an unabashed disaster, and must be subject to a redirection and reallocation of resources in order to more effectively stabilize our economy in the long run, not just a focus on ‘tomorrow’.

◆ The high level solution is decentralization of the financial system, like the tech industry, which will lower systemic risk, foster competition and yield better ideas, services and companies. In order to alleviate the current financial market problems, it is important to understand and address the root causes – not just the symptoms and peripheral issues. Topics such as executive pay, bonus schemes, mortgage application fraud, regulatory fraud, credit derivatives and investment mis-selling all need addressing in time, however the primary concern for now must be to stabilize the global financial system and have it reopen for business.

◆ TARP does not insure that those banks and brokers that receive bailout aid will increase lending. There has been no discernible nor measurable uptick in consumer or B2B lending since the advent of the TARP program. The reality is the market is hoarding liquidity and these banks are doing the same. More importantly consumer lending has been a small, often insignificant part of their business. They made money by trading and through securitization of debt. We are talking about a seismic shift in the business model of multi-national institutions, and this will not happen over night. Banks must be viewed on the same plane as utility companies – not mega-centers for corporate profit. They have generally become massive trading houses and hedge funds with a small consumer-deposits component allowing them ready access to a cheap source of capital.

◆ The Wall Street model of securitization and extreme leverage is obsolete. Big banks and brokers made most of their earnings over the past several years in trading, not consumer lending. And now their derivatives are THE problem. Derivative devaluation does not directly affect the general public except for reducing the bank’s capital position to the point that they’re unable to lend. We must segregate the derivative write-downs from the portion of the bank subject to regulatory capital requirements.

◆ There is a fundamental lack of liquidity in financial markets as too many assets (bonds) are looking for long term homes. There is no single solution to this problem however a number of different processes can aid in freeing up markets. A central mandate of any government action must be to encourage private sector price discovery, without the crutch of a Federal Reserve or Treasury backstop or guarantee. There is a price at which buyers and sellers will conduct business. We must expedite the discovery of that price, not hinder it.

◆ Many home owners paid too much for their houses. Time, inflation and economic growth will eventually solve this problem as long as markets are stabilized and we prevent massive forced foreclosures and liquidations. Efforts to ‘prop up’ home prices are misguided, and we must return to historical levels of wage-to-price ratios, and price-to-rent ratios. Robert Schiller has published ample material about where housing prices should be and will likely stabilize – the question is simply how much money will we burn trying to prevent the inevitable from occurring?

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Paul Kirk Illegally Votes In Place Of Scott Brown Today

In Congress, Corruption, Government Lies, Obama, Scott Brown, US Senate on January 29, 2010 at 3:33 am

Today the Senate voted on three major pieces of Legislation that require 60 votes to pass.

1. To raise the debt ceiling to $14.3 trillion.
2. To reduce the deficit by establishing five-year discretionary spending caps.
3. And Ben Bernanke’s confirmation.

Redstate.com explains:

According to Senate rules and precedent, Kirk’s term expired last Tuesday upon the election of Scott Brown. Furthermore, Massachusetts law can be interpreted, according to GOP lawyers, as:

Based on Massachusetts law, Senate precedent, and the U.S. Constitution, Republican attorneys said Kirk will no longer be a senator after election day, period. Brown meets the age, citizenship, and residency requirements in the Constitution to qualify for the Senate. “Qualification” does not require state “certification,” the lawyers said.

Additionally, as reported in the Weekly Standard and investigated and confirmed by GOP lawyers:

Appointed Senator Paul Kirk will lose his vote in the Senate after Tuesday’s election in Massachusetts of a new senator and cannot be the 60th vote for Democratic health care legislation, according to Republican attorneys.

Using this interpretation, Kirk cannot vote on any other legislation. Moreover, further analysis by Michael Stern concludes:

The Senate subcommittee and committee concluded, based on its hearing and review, that “the term of service of a Senator appointed to fill a vacancy in an unexpired term ends on the day when his successor is elected by the people.” 1939 Congressional Record, p. 998. There was evidently no controversy among either the subcommittee or full committee regarding this legal conclusion, and the committee then presented a resolution to the Senate for adoption, expressing the view that Berry’s term of service expired on November 8, 1938, the date of the special election. As Senator Connally, a member of the subcommittee, explained to the Senate, the fact that the Tennessee statute purported to extend Berry’s term until the qualification of his successor was of no force because the statute was “plainly in conflict with the provisions of the seventeenth amendment.” Accordingly, the Senate adopted the proposed resolution without dissent. 1939 Congressional Record, p. 1058.

Based on this authority, it would appear that a valid point of order could be raised as to Senator Kirk’s participation in Senate proceedings after January 19, 2010.

Perhaps the GOP is so accustomed to being shut out, they failed to act on such a blatant violation of Senate law. Only time will tell if today’s votes will be upheld. I am really getting tired of this nonsense.

UPDATE: Legal Insurrection discusses the legislation scam.

[Indonesia] Obama's Mini-Me Coming Down?

In Obama, Uncategorized, World News on January 26, 2010 at 8:53 pm

Yeah it’s true, the people of Indonesia seem to feel the same as Americans; unimpressed. The honeymoon appears to be over for the rock star Commander-In-Chief.  (you can see the unveiling VIDEO here.)

Rant Rave reports: “Since then, Obama seems to have lost his charm. A statue was erected in Jakarta after Obama’s election showing Barack Obama as a young boy when he was living in Jakarta, Indonesia. Now, according to Agence France Presse (AFP), authorities in that country are mulling a proposal to have the statue torn down. AFP reports as follows on the latest tarnish on Obama’s bronze.

“Members of the “Take Down the Barack Obama Statue in Menteng Park” group on Facebook say Obama has done nothing for Indonesia.

“Barack Obama has yet to make a significant contribution to the Indonesian nation. We could say Obama only ate and s (expletive) in Menteng. He spent his subsequent days living as an American,” the web page says.

“For the dignity of a sovereign nation, Barack Obama’s monument in Menteng Park must be removed immediately.”

The childhood connection and his knowledge of a few words of Indonesian made Obama popular in the mainly Muslim country of 234 million people.”

The world seems to be coming down from a giant bender. The lights have come back on. The sun is up. It was dark in the bar, but now we can see who we took home. And it doesn’t look pretty.”

The Admonition explains: “The Indonesian park officials say they’ve been discussing what to do with the statue.”

Gateway Pundit sums it up:

“We can relate. He hasn’t done a whole lot for the US either… Except for tripling the deficit and watching the unemployment rate soar while he pushed his radical agenda on the nation.”

Well, it looks like Obama is going to have to make it based on results from here on out. Best of luck.

[Indonesia] Obama's Mini-Me Coming Down?

In Obama, Uncategorized, World News on January 26, 2010 at 8:53 pm

Yeah it’s true, the people of Indonesia seem to feel the same as Americans; unimpressed. The honeymoon appears to be over for the rock star Commander-In-Chief.  (you can see the unveiling VIDEO here.)

Rant Rave reports: “Since then, Obama seems to have lost his charm. A statue was erected in Jakarta after Obama’s election showing Barack Obama as a young boy when he was living in Jakarta, Indonesia. Now, according to Agence France Presse (AFP), authorities in that country are mulling a proposal to have the statue torn down. AFP reports as follows on the latest tarnish on Obama’s bronze.

“Members of the “Take Down the Barack Obama Statue in Menteng Park” group on Facebook say Obama has done nothing for Indonesia.

“Barack Obama has yet to make a significant contribution to the Indonesian nation. We could say Obama only ate and s (expletive) in Menteng. He spent his subsequent days living as an American,” the web page says.

“For the dignity of a sovereign nation, Barack Obama’s monument in Menteng Park must be removed immediately.”

The childhood connection and his knowledge of a few words of Indonesian made Obama popular in the mainly Muslim country of 234 million people.”

The world seems to be coming down from a giant bender. The lights have come back on. The sun is up. It was dark in the bar, but now we can see who we took home. And it doesn’t look pretty.”

The Admonition explains: “The Indonesian park officials say they’ve been discussing what to do with the statue.”

Gateway Pundit sums it up:

“We can relate. He hasn’t done a whole lot for the US either… Except for tripling the deficit and watching the unemployment rate soar while he pushed his radical agenda on the nation.”

Well, it looks like Obama is going to have to make it based on results from here on out. Best of luck.

[Indonesia] Obama’s Mini-Me Coming Down?

In Obama, Uncategorized, World News on January 26, 2010 at 8:53 pm

Yeah it’s true, the people of Indonesia seem to feel the same as Americans; unimpressed. The honeymoon appears to be over for the rock star Commander-In-Chief.  (you can see the unveiling VIDEO here.)

Rant Rave reports: “Since then, Obama seems to have lost his charm. A statue was erected in Jakarta after Obama’s election showing Barack Obama as a young boy when he was living in Jakarta, Indonesia. Now, according to Agence France Presse (AFP), authorities in that country are mulling a proposal to have the statue torn down. AFP reports as follows on the latest tarnish on Obama’s bronze.

“Members of the “Take Down the Barack Obama Statue in Menteng Park” group on Facebook say Obama has done nothing for Indonesia.

“Barack Obama has yet to make a significant contribution to the Indonesian nation. We could say Obama only ate and s (expletive) in Menteng. He spent his subsequent days living as an American,” the web page says.

“For the dignity of a sovereign nation, Barack Obama’s monument in Menteng Park must be removed immediately.”

The childhood connection and his knowledge of a few words of Indonesian made Obama popular in the mainly Muslim country of 234 million people.”

The world seems to be coming down from a giant bender. The lights have come back on. The sun is up. It was dark in the bar, but now we can see who we took home. And it doesn’t look pretty.”

The Admonition explains: “The Indonesian park officials say they’ve been discussing what to do with the statue.”

Gateway Pundit sums it up:

“We can relate. He hasn’t done a whole lot for the US either… Except for tripling the deficit and watching the unemployment rate soar while he pushed his radical agenda on the nation.”

Well, it looks like Obama is going to have to make it based on results from here on out. Best of luck.

Spending Freeze; Reactionary Obama Late Again

In Congress, Government Lies, Obama, US Senate on January 26, 2010 at 1:11 am

Here we go again. A day late and twelve trillion dollars short. Obama is set to announce during his State of The Union Address, a spending freeze-almost. Redstate reports:

“Teh Twitter is abuzz with posts on the rumor that Barack Obama will be announcing a “spending freeze” on discretionary spending during the State of the Union address.  Pay close attention to the words:  discretionary spending.  The word on the street is that his request will exempt “the Pentagon, veterans programs, foreign aid and homeland security” from this so-called “freeze.”  There are a couple of key items to consider:

  1. What exactly does he mean by “freeze?”  Does it mean “freeze the level of spending at the bloated 2009 numbers”?  Or does it mean “don’t increase these programs any more in 2010 than we did in 2009?  Or does it mean “stick to historic growth levels, rather than Obama-caliber spending increases”?  Inquiring minds want to know.
  2. Discretionary spending means non-entitlement spending.  When you subtract out entitlements:  Medicare & Social Security, and then you subtract defense-related spending, there is precious little left.  In fact, it comes out to less than fifteen percent of the federal budget.*  Barack Obama’s so-called “stimulus” program totaled around $750B – that’s almost 50% greater than the entire non-defense discretionary budget for 2009. Freezing 15% of the federal budget is a drop in the bucket.  (see page 8 of this PDF)”

I don’t quite know whether I should be impressed by the reckless determination or astonished by the reprehensible lack of foresight. Either way, we’re screwed…

(Courtesy of Gateway Pundit) -“For the record, Democrats are likely to quadruple Bush’s 2008 budget deficit this year after tripling it last year.”