Monday, March 29, 2010
Factoids That You Can Use
Once wireless Internet connectivity was considered a novelty. Today it has eclipsed wire line as the preferred connection. According to Pew Research, 55 percent of Americans connect by wireless to the Internet at least occasionally. Of the 46 percent of adults who own laptop computers, eight out of ten connect via WiFi and 28 percent access the Internet via cellular broadband. Add in smartphones, like the Iphone, and it's obvious why expenditures on wireless networks are growing while investment in wire line is shrinking.
Sunday, March 28, 2010
Businesses See Unhealthy Costs
After months of remaining silent for fear of retribution, big businesses are finally weighing in on the crippling impact of the Health Care Reform bill. It may be too little too late, but the corporate outcry underscores how the Obama Administration has grossly misrepresented the legislation's affect on millions of consumers, particularly seniors.
The ripple of business unrest is quickly turning into a tidal wave that threatens to bury any chances the Democrats have for selling the bill's benefits. Ironically, many consumers impacted by the changes will be retirees at some of the nation's biggest companies, including thousands of union workers who thought they would be the primary beneficiaries of Health Care Reform.
It all started innocently last week when John Deere Company said the new law would hike its costs by $150 million. That was followed by an announcement by Caterpillar that it would record a $100 million charge to earnings related to the legislation. That notion was seconded by AK Steel Holding Corp. and 3M Company. Then corporate giants Verizon and AT&T weighed in and the house of cards that was Health Care Reform began to crumble right before our eyes.
Here's what is distressing businesses: the new law will make a government subsidy the companies get for retiree drug coverage taxable in 2011. To may politicians, that may sound harmless, because after all, these huge firms have millions to throw around. But by some estimates, the health care costs may trim as much as $14 billion from U.S. corporate profits. However, the biggest losers will not be the businesses, but the many retirees who depend on their company-paid benefits.
So how come these same businesses were mute during the battle over health care reform? Take AT&T as an example. The company is heavily regulated, particularly at the federal level where the Federal Communications Commission holds sway over a huge amount of the firm's fortunes. If AT&T had assumed a high profile position, attacking the bill as anti-business, would the Obama Administration stood still when Democrats control the FCC? Of course not. The administration would have used its leverage to silence dissent.
Now the reform bill is law and the once silent firms are free to complain all they want. Last week, AT&T announced it would book a $1 billion charge to first quarter earnings. This will be a non-cash expense, meaning the company does not actually have to make a $1 billion outlay. However, because of the charge, the company said it was considering changes to the benefits it offers current and retired employees.
An AT&T spokesperson added, "As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company."
If you don't think this is a big deal, consider this: AT&T carries a liability of $27.8 billion on its balance sheet for post-employment benefit obligations for its current and future retirees. The number includes pension payments, but a healthy chunk of those billions are medical benefits that may soon disappear.
In fact, AT&T sounded a warning in its recently released annual report. "The final outcome of the legislation (health care reform) could cause negative impacts to our results and bring uncertainty to our future costs," the company said in its management's discussion and analysis of financial conditions.
About 58 percent of AT&T's 281,000 employees (as of January 31) are represented by the Communications Workers of America. A spokesperson for the union claimed workers' health benefits were locked in because of labor contracts. But those contracts will be expiring over the next two to three years.
While the union representative claims may be true today, there is little incentive for the company to continue to pay for future benefits that are now taxable. Retirees, many probably members of the same AARP that supported the legislation, will find out soon they were sold down the river by the nation's largest senior citizen lobbying organization.
Yet President Obama continually told a skeptical public that his health care reform bill would not change workers' current coverage. Less than two weeks since the passage of the legislation, this is turning out to be another misrepresentation.
How many more will be exposed in the days and months ahead?
The ripple of business unrest is quickly turning into a tidal wave that threatens to bury any chances the Democrats have for selling the bill's benefits. Ironically, many consumers impacted by the changes will be retirees at some of the nation's biggest companies, including thousands of union workers who thought they would be the primary beneficiaries of Health Care Reform.
It all started innocently last week when John Deere Company said the new law would hike its costs by $150 million. That was followed by an announcement by Caterpillar that it would record a $100 million charge to earnings related to the legislation. That notion was seconded by AK Steel Holding Corp. and 3M Company. Then corporate giants Verizon and AT&T weighed in and the house of cards that was Health Care Reform began to crumble right before our eyes.
Here's what is distressing businesses: the new law will make a government subsidy the companies get for retiree drug coverage taxable in 2011. To may politicians, that may sound harmless, because after all, these huge firms have millions to throw around. But by some estimates, the health care costs may trim as much as $14 billion from U.S. corporate profits. However, the biggest losers will not be the businesses, but the many retirees who depend on their company-paid benefits.
So how come these same businesses were mute during the battle over health care reform? Take AT&T as an example. The company is heavily regulated, particularly at the federal level where the Federal Communications Commission holds sway over a huge amount of the firm's fortunes. If AT&T had assumed a high profile position, attacking the bill as anti-business, would the Obama Administration stood still when Democrats control the FCC? Of course not. The administration would have used its leverage to silence dissent.
Now the reform bill is law and the once silent firms are free to complain all they want. Last week, AT&T announced it would book a $1 billion charge to first quarter earnings. This will be a non-cash expense, meaning the company does not actually have to make a $1 billion outlay. However, because of the charge, the company said it was considering changes to the benefits it offers current and retired employees.
An AT&T spokesperson added, "As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company."
If you don't think this is a big deal, consider this: AT&T carries a liability of $27.8 billion on its balance sheet for post-employment benefit obligations for its current and future retirees. The number includes pension payments, but a healthy chunk of those billions are medical benefits that may soon disappear.
In fact, AT&T sounded a warning in its recently released annual report. "The final outcome of the legislation (health care reform) could cause negative impacts to our results and bring uncertainty to our future costs," the company said in its management's discussion and analysis of financial conditions.
About 58 percent of AT&T's 281,000 employees (as of January 31) are represented by the Communications Workers of America. A spokesperson for the union claimed workers' health benefits were locked in because of labor contracts. But those contracts will be expiring over the next two to three years.
While the union representative claims may be true today, there is little incentive for the company to continue to pay for future benefits that are now taxable. Retirees, many probably members of the same AARP that supported the legislation, will find out soon they were sold down the river by the nation's largest senior citizen lobbying organization.
Yet President Obama continually told a skeptical public that his health care reform bill would not change workers' current coverage. Less than two weeks since the passage of the legislation, this is turning out to be another misrepresentation.
How many more will be exposed in the days and months ahead?
Saturday, March 27, 2010
Buried In The Health Care Bill
Unless you read all 2,900+ pages of the so-called Health Care Reform Bill, you probably missed two Obama initiatives buried in piles of bureaucratic language. There has been an iota of attention in the media, but most have paid scant attention.
1. The Federal Government will assume full authority over student loans, beginning July 1. This has been a point of bitter contention between the Obama Administration and the banking industry. That helps explain why the administration decided to shove the legislation into the health bill. Banks and other private lenders, including Sallie Mae, will be cut out of the $30-$40 billion student loan business. The bank loans had been backed by the federal government. While the impact may not be felt directly by students, there are a couple of troubling unintended consequences. First, thousands of jobs will be lost at private lenders, including up to 2,500 at Sallie Mae. However, the government will have to hire thousands of workers to handle the higher volume of loans now originated in the private sector. Big government will get bigger and fatter. Secondly, the government will be able to set whatever criteria it chooses to make student loans. Do you really want Washington deciding who gets money to go to college?
2. The bill included $2.5 billion in funding for historically Black colleges and universities and minority-serving institutions. It is hard to be against federal funding of college education. However, it begs the question: what does this have to do with Health Care Reform? From the surgically repaired lips of Speaker Pelosi: "Education and Health Care have an affinity. They go together." Huh? The truth is that the funding was a payoff to the House Black Caucus which championed the Health Care Reform bill and rallied around the president during his darkest days when its passage appeared dim. If funding Black colleges is a good idea, why couldn't it have stood on its own as a separate piece of legislation? The answer is by sticking it in the bill the Black Caucus could rally support among its constituency by pointing out how the legislation would benefit minority colleges. Sleazy, sleazy, sleazy.
Those two provisions are examples of what has become the standard modus operandi for the Reid-Pelosi-Obama Trinity. Obfuscation and lack of transparency are hallmarks of everything they touch. According to the latest Gallup Polls, Reid and Pelosi have the highest negative numbers of any politicians in America. Based on Health Care Reform hijinks, is it any wonder?
1. The Federal Government will assume full authority over student loans, beginning July 1. This has been a point of bitter contention between the Obama Administration and the banking industry. That helps explain why the administration decided to shove the legislation into the health bill. Banks and other private lenders, including Sallie Mae, will be cut out of the $30-$40 billion student loan business. The bank loans had been backed by the federal government. While the impact may not be felt directly by students, there are a couple of troubling unintended consequences. First, thousands of jobs will be lost at private lenders, including up to 2,500 at Sallie Mae. However, the government will have to hire thousands of workers to handle the higher volume of loans now originated in the private sector. Big government will get bigger and fatter. Secondly, the government will be able to set whatever criteria it chooses to make student loans. Do you really want Washington deciding who gets money to go to college?
2. The bill included $2.5 billion in funding for historically Black colleges and universities and minority-serving institutions. It is hard to be against federal funding of college education. However, it begs the question: what does this have to do with Health Care Reform? From the surgically repaired lips of Speaker Pelosi: "Education and Health Care have an affinity. They go together." Huh? The truth is that the funding was a payoff to the House Black Caucus which championed the Health Care Reform bill and rallied around the president during his darkest days when its passage appeared dim. If funding Black colleges is a good idea, why couldn't it have stood on its own as a separate piece of legislation? The answer is by sticking it in the bill the Black Caucus could rally support among its constituency by pointing out how the legislation would benefit minority colleges. Sleazy, sleazy, sleazy.
Those two provisions are examples of what has become the standard modus operandi for the Reid-Pelosi-Obama Trinity. Obfuscation and lack of transparency are hallmarks of everything they touch. According to the latest Gallup Polls, Reid and Pelosi have the highest negative numbers of any politicians in America. Based on Health Care Reform hijinks, is it any wonder?
Tuesday, March 23, 2010
Factoids That You Can Use
The Federal and State governments already control nearly 60 percent of health care spending. These programs are riddled with fraud, waste and abuse. Each year Medicare fraud exceeds $60 billion. More than $32 billion in Medicaid funds each year are spent improperly. Yet the Congress just voted to increase government control of health care spending. Does that worry anybody?
Monday, March 22, 2010
Congress Unleashes Unhealthy Reform
No one should be surprised that the so-called Health Care Reform bill was approved by the House. For those of you who follow my annual predictions, I forecast this result, despite all the public angst over the sweeping changes in the health care delivery system. There were just too many signs that Democrats had drawn a line in the sand from which there would be no retreat, irregardless of what the polls said about a rising tide of public opposition.
Many were mistakenly hopeful of defeat for the bill. They saw the public protests in cities, often arranged by the nascent Tea Party activists. They heard pundits preach that House members up for election would shrink once that faced angry constituents back home at noisy town hall meetings. Many on the political right--particular those in the media--whipped up public fervor with the prospect that their voices would matter. All this was an illusion because none of it was going to make a difference. At least not to the three people most responsible for this travesty: the President, Speaker Pelosi and Majority Leader Reid.
That unholy trinity was going to do whatever it took to deliver a bill. Despite what your hear about this being a victory for left wing ideology, this was more about saving their jobs. Think about it. The Obama Administration and a Democratic Congress had nothing to show for the first 15 months of what was supposed to be sweeping change. Job growth is non-existent. Wars are still being waged on two fronts. Home foreclosures are steadily rising again. Small and medium sized banks are going belly up. There is nothing for the Democrats to claim as a victory going into the November elections. They were desperate for a win. And desperate people are the hardest to defeat.
But Democrats also would not have been able to achieve passage of the bill without a battle plan that nullified their potential adversaries or at least neutered their ability to scuttle the health care bills.
1. President Clinton's ill fated attempt at health care reform went down in flames, in part, because big business, big pharma and big medical groups (like the AMA) were aligned against the effort. This time the President left the dirty work to his minions, who rounded up those three unlikely allies behind the bill. Team Obama co-opted the pharmaceutical industry with a deal they couldn't refuse. The American Medical Association fell in lock step. Many large corporations, struggling with staggering growth in medical costs for employees, either remained silent or tacitly signaled they would not oppose health care reform this time around. Don't think the big firms didn't ask for some kind of quid-pro-quid because they did. However, by removing themselves from the battle, they ceded ground to the unions, who were only too happy to get out front on the issue. But businesses may have miscalculated. When taxpayers begin picking up most of the medical costs previously incurred by these firms, the unions will demand higher wages to make up for the "lost benefits" once paid by their employers. That day is coming and sooner than many think.
2. The mainstream media, mostly the big three television networks, provided air cover for the bill. Reporting almost always focused on the popular parts of the Health Care Reform bill while ignoring those that were more controversial. Most newspapers offered the same coverage, but print media long ago lost its influence. If you only watched the three networks, you could not help but think this bill would allow most Americans afford insurance without increasing the deficit. More importantly, many seniors rely on television news for most of their information. The networks were loathe to air any criticism of the bill's provisions to reduce and ration health care for seniors. Since survey after survey shows that most Americans get their news from network television, these news outlets provided the air cover needed for Democrats to act against their constituents' will. While it's true talk radio derided the health care effort for months, its audience still pales when compared to the big three networks.
2. Seniors, who have the most to lose in this reform bill, were strangely silent. The network television coverage helps explain part of this. However, many are members of American Association of Retired Persons (AARP), which enthusiastically supported the bill from its inception. Many seniors have no idea that AARP is a shill for the Democratic Party that has wrapped itself in representing the interests of the elderly. Anyone who has taken the time to learn who runs AARP and its ties with the Democrat Party understands that the organization is beholden to the current administration and not to seniors. Simply stated, seniors were duped. If you don't think that matters, ask any elected official who they fear most. Seniors vote in greater percentages than any other group. They have lots of time on their hands to raise cane. Don't underestimate the impact that millions of outraged and organized seniors would have had on efforts to derail this legislation. Sure, ragtag knots of seniors showed up at a few town hall meetings, but they were disorganized and their voices were muted.
4. The President finally weighed in at the eleventh hour when it became clear that House and Senate Democrats would not walk the plank alone. Obama put his considerable political capital on the line in the last few months, beginning with his awkwardly staged meeting with representatives of both parties. Behind the scenes, Democratic leaders had been saying for months that Obama needed to lead the effort, rather than wait in the wings and let the process work. When he finally acquiesced, Democrats in the House felt embolden to step from the shadows. Sure, there was arm twisting, unseemly deal-making and political payoffs. But that happens with a lot of legislation, admittedly to a lesser degree. What sealed the deal was Obama stepping out front to deflect some of the political heat from House and Senate members. More air cover.
Now a few muttering media mouths are acting like there is still hope to derail this bill. They are pointing to developments like these: At least 18 states are preparing to file lawsuits. Republicans are planning procedural rules fights to halt passage of reconciliation. Others are promising to go to the Supreme Court to challenge the bill's constitutionality. Don't fall for any of this. The biggest hurdles have been leaped. None of this will matter.
So what happens next? Democrats will spend the time between now and Easter spinning this as a "historic", "landmark," and "momentous" step. The President will stage more town hall meetings to ostensibly explain the reform bill's benefits. Democrats will highlight those parts of the bill that most voters can rally around. They will drag more insurance victims before the cameras to talk about how their lives will be saved by health care reform. The big networks will be compliant. Expect one-on-one interviews with the President, describing the lonely task of shepherding the legislation through a recalcitrant Congress. Unions will be bankrolling efforts to whip up enthusiasm for reforms.
The conventional wisdom is that Americans won't fall for the rhetoric. Voters will remember in November what happened in March. However, watch for the Democrats to unleash a tried and true scare tactic: voters will be warned that if Republicans are elected, they will take away this new entitlement. GOP candidates will be branded as tools of the insurance industry who would like nothing better than to go back to the good old days when those with preexisting conditions were kicked off the coverage rolls. The tactic has worked for Democrats for decades, especially with regard to the country's three biggest entitlement programs: Social Security, Medicare and Medicaid.
If you believe all this is unnecessarily gloomy, ask yourself this question: When is the last time Congress ended an entitlement program? The answer unfortunately is never. That's hardly encouraging for those looking for a miracle to stop the inevitable.
Many were mistakenly hopeful of defeat for the bill. They saw the public protests in cities, often arranged by the nascent Tea Party activists. They heard pundits preach that House members up for election would shrink once that faced angry constituents back home at noisy town hall meetings. Many on the political right--particular those in the media--whipped up public fervor with the prospect that their voices would matter. All this was an illusion because none of it was going to make a difference. At least not to the three people most responsible for this travesty: the President, Speaker Pelosi and Majority Leader Reid.
That unholy trinity was going to do whatever it took to deliver a bill. Despite what your hear about this being a victory for left wing ideology, this was more about saving their jobs. Think about it. The Obama Administration and a Democratic Congress had nothing to show for the first 15 months of what was supposed to be sweeping change. Job growth is non-existent. Wars are still being waged on two fronts. Home foreclosures are steadily rising again. Small and medium sized banks are going belly up. There is nothing for the Democrats to claim as a victory going into the November elections. They were desperate for a win. And desperate people are the hardest to defeat.
But Democrats also would not have been able to achieve passage of the bill without a battle plan that nullified their potential adversaries or at least neutered their ability to scuttle the health care bills.
1. President Clinton's ill fated attempt at health care reform went down in flames, in part, because big business, big pharma and big medical groups (like the AMA) were aligned against the effort. This time the President left the dirty work to his minions, who rounded up those three unlikely allies behind the bill. Team Obama co-opted the pharmaceutical industry with a deal they couldn't refuse. The American Medical Association fell in lock step. Many large corporations, struggling with staggering growth in medical costs for employees, either remained silent or tacitly signaled they would not oppose health care reform this time around. Don't think the big firms didn't ask for some kind of quid-pro-quid because they did. However, by removing themselves from the battle, they ceded ground to the unions, who were only too happy to get out front on the issue. But businesses may have miscalculated. When taxpayers begin picking up most of the medical costs previously incurred by these firms, the unions will demand higher wages to make up for the "lost benefits" once paid by their employers. That day is coming and sooner than many think.
2. The mainstream media, mostly the big three television networks, provided air cover for the bill. Reporting almost always focused on the popular parts of the Health Care Reform bill while ignoring those that were more controversial. Most newspapers offered the same coverage, but print media long ago lost its influence. If you only watched the three networks, you could not help but think this bill would allow most Americans afford insurance without increasing the deficit. More importantly, many seniors rely on television news for most of their information. The networks were loathe to air any criticism of the bill's provisions to reduce and ration health care for seniors. Since survey after survey shows that most Americans get their news from network television, these news outlets provided the air cover needed for Democrats to act against their constituents' will. While it's true talk radio derided the health care effort for months, its audience still pales when compared to the big three networks.
2. Seniors, who have the most to lose in this reform bill, were strangely silent. The network television coverage helps explain part of this. However, many are members of American Association of Retired Persons (AARP), which enthusiastically supported the bill from its inception. Many seniors have no idea that AARP is a shill for the Democratic Party that has wrapped itself in representing the interests of the elderly. Anyone who has taken the time to learn who runs AARP and its ties with the Democrat Party understands that the organization is beholden to the current administration and not to seniors. Simply stated, seniors were duped. If you don't think that matters, ask any elected official who they fear most. Seniors vote in greater percentages than any other group. They have lots of time on their hands to raise cane. Don't underestimate the impact that millions of outraged and organized seniors would have had on efforts to derail this legislation. Sure, ragtag knots of seniors showed up at a few town hall meetings, but they were disorganized and their voices were muted.
4. The President finally weighed in at the eleventh hour when it became clear that House and Senate Democrats would not walk the plank alone. Obama put his considerable political capital on the line in the last few months, beginning with his awkwardly staged meeting with representatives of both parties. Behind the scenes, Democratic leaders had been saying for months that Obama needed to lead the effort, rather than wait in the wings and let the process work. When he finally acquiesced, Democrats in the House felt embolden to step from the shadows. Sure, there was arm twisting, unseemly deal-making and political payoffs. But that happens with a lot of legislation, admittedly to a lesser degree. What sealed the deal was Obama stepping out front to deflect some of the political heat from House and Senate members. More air cover.
Now a few muttering media mouths are acting like there is still hope to derail this bill. They are pointing to developments like these: At least 18 states are preparing to file lawsuits. Republicans are planning procedural rules fights to halt passage of reconciliation. Others are promising to go to the Supreme Court to challenge the bill's constitutionality. Don't fall for any of this. The biggest hurdles have been leaped. None of this will matter.
So what happens next? Democrats will spend the time between now and Easter spinning this as a "historic", "landmark," and "momentous" step. The President will stage more town hall meetings to ostensibly explain the reform bill's benefits. Democrats will highlight those parts of the bill that most voters can rally around. They will drag more insurance victims before the cameras to talk about how their lives will be saved by health care reform. The big networks will be compliant. Expect one-on-one interviews with the President, describing the lonely task of shepherding the legislation through a recalcitrant Congress. Unions will be bankrolling efforts to whip up enthusiasm for reforms.
The conventional wisdom is that Americans won't fall for the rhetoric. Voters will remember in November what happened in March. However, watch for the Democrats to unleash a tried and true scare tactic: voters will be warned that if Republicans are elected, they will take away this new entitlement. GOP candidates will be branded as tools of the insurance industry who would like nothing better than to go back to the good old days when those with preexisting conditions were kicked off the coverage rolls. The tactic has worked for Democrats for decades, especially with regard to the country's three biggest entitlement programs: Social Security, Medicare and Medicaid.
If you believe all this is unnecessarily gloomy, ask yourself this question: When is the last time Congress ended an entitlement program? The answer unfortunately is never. That's hardly encouraging for those looking for a miracle to stop the inevitable.
Tuesday, March 16, 2010
Letters from O.H. Bama
Dear NASA Nerds:
There has been a lot of bellyaching from you people since My Administration announced cutbacks in NASA funding as part of my budget. I have four words for you: Get Over It! (I know that's three words, but we've cut the word budget to help America deal with the deficit.)
Let me be clear. I don't even know what the initials NASA stand for. National Association of Stupid Astronauts? Nerdy Angry Spacey Androids? No good Anguished Steroid Athletes? Most Americans think NASA is a nasal condition.
In an effort at bipartisanship, let me extend the hand of compromise. I might be willing to increase your budget, if you allow Joe Biden to go on the next moon flight. The good news is that you don't even have to send him back to earth. That could save money, you see?
Joe made a mess of things on his trip to the Mideast. Hilliary had to go in there with a broom to clean up the mess he made. Old Plugs just can't engage his brain and mouth at the same time.
To grease the skids, I mentioned my plan to the Vice President. As soon as I uttered the word moon, he dropped his pants in the oval office. Rham suggested a digital exam, the one test Plugs might be able to ace.
I know what you're thinking: but Joe doesn't have any astronaut training. Listen, no one is as spacey as Plugs. Furthermore, he has spent more time orbiting the truth than anyone, with the possible exception of Me.
If there's extra room on the spaceship, perhaps the entire Fox News Network could ride along with Plugs to document this historic voyage. Those people keep turning over rocks, exposing my penchant for deception. Let them break moon rocks for a few decades and let's see if they won't be willing to join the rest of the media in overlooking the truth.
Let me be perfectly honest. I do have an ulterior motive. Joe has a plan to make money that can be used to reduce the staggering deficit. He explained that he wants to use this trip to begin his own liquor export business. I was puzzled, so I asked him what he was talking about. His eyes glazed over and he answered: "Where do you think moonshine comes from?"
Plugs has a point there. I expect an answer before Plugs' next full moon.
Your President In Chief,
O.H. Bama
There has been a lot of bellyaching from you people since My Administration announced cutbacks in NASA funding as part of my budget. I have four words for you: Get Over It! (I know that's three words, but we've cut the word budget to help America deal with the deficit.)
Let me be clear. I don't even know what the initials NASA stand for. National Association of Stupid Astronauts? Nerdy Angry Spacey Androids? No good Anguished Steroid Athletes? Most Americans think NASA is a nasal condition.
In an effort at bipartisanship, let me extend the hand of compromise. I might be willing to increase your budget, if you allow Joe Biden to go on the next moon flight. The good news is that you don't even have to send him back to earth. That could save money, you see?
Joe made a mess of things on his trip to the Mideast. Hilliary had to go in there with a broom to clean up the mess he made. Old Plugs just can't engage his brain and mouth at the same time.
To grease the skids, I mentioned my plan to the Vice President. As soon as I uttered the word moon, he dropped his pants in the oval office. Rham suggested a digital exam, the one test Plugs might be able to ace.
I know what you're thinking: but Joe doesn't have any astronaut training. Listen, no one is as spacey as Plugs. Furthermore, he has spent more time orbiting the truth than anyone, with the possible exception of Me.
If there's extra room on the spaceship, perhaps the entire Fox News Network could ride along with Plugs to document this historic voyage. Those people keep turning over rocks, exposing my penchant for deception. Let them break moon rocks for a few decades and let's see if they won't be willing to join the rest of the media in overlooking the truth.
Let me be perfectly honest. I do have an ulterior motive. Joe has a plan to make money that can be used to reduce the staggering deficit. He explained that he wants to use this trip to begin his own liquor export business. I was puzzled, so I asked him what he was talking about. His eyes glazed over and he answered: "Where do you think moonshine comes from?"
Plugs has a point there. I expect an answer before Plugs' next full moon.
Your President In Chief,
O.H. Bama
Thursday, March 11, 2010
Factoids That You Can Use
Factoid: Sales of so-called smartphones (like the IPhone) are expected to surpass personal computers in two years, according to Gartner Inc. forecasts. Smartphone sales are predicted to triple from 139.3 million in 2008 to 491.9 million units by 2012. Meanwhile, the PC market will expand to 443.1 million units from 290.8 million in 2008.
It's about banks and housing, stupid!
Many pundits--from stock analysts to economists to the news media to OBama Administration officials--have developed blind spots that prevent a measured plan for reviving the economy. It is as if they have forgotten what sparked the current economic recession. In case there is still doubt: the crisis was fueled by a collapse of the overheated housing market which in turn led to huge losses at banks. Yet precious little has been done to address those two sectors, except for bank bailouts and feeble attempts to prop up homeowners, which have utterly failed to substantially improve the economy.
Instead many pundits, including Wall Street, are focused on unemployment numbers. However, as most economists will tell you, unemployment is a lagging indicator of economic improvement. Historically, unemployment improves after the recession ends. The recession won't end until housing and banking improve substantially. So before you fall for the rosy economic predictions of many pundits, consider these facts:
1. New homes sales are at their lowest levels since the Commerce Department began tracking the numbers in 1963. The Mortgage Bankers Association's purchase index for new and existing homes fell to its lowest level since 1997, for the week ended February 19. Does that sound like recovery?
2. An astounding 140 banks went under last year, more than four times as many banks as collapsed in the entire eight-year period from 2000-2007. Forty-five banks failed in just the last quarter of 2009. According to the Federal Deposit Insurance Corporation, another 702 banks are listed as currently in trouble. The number of problem institutions on the FDIC's list is nine times greater than it was in 2007. Does that sound like an improving situation?
Now, let's examine why these two sectors have not improved, but gotten steadily worse.
Sales of homes have been driven by bargain hunters leaping on foreclosed homes or short sales. Everything else has practically dried up. Historically, home sales are driven by job and income growth, migration of employees, low interest rates and consumer confidence. By any measure, none of those drivers exist today, except low interest rates. That alone will not move the needle by much.
The banking situation may at first seem to have improved. After all, the biggest banks have clawed back from the financial cliff, thanks to huge federal bailouts that have ballooned the deficit. However, many pundits have missed one big looming negative: commercial real estate. Occupancy rates are falling, values are sinking and the ability of developers to meet mortgage payments and loan covenants have dipped.
If that isn't bad enough, banks and lenders are also facing the another wave of home foreclosures as the last of those budget-busting adjustable rate mortgages wash through the system. Despite all the administration claims it has done to stabilize the home market, foreclosures continue to grow with each passing day. In some large cities, the percentage of homes that banks have file foreclosure on or repossessed is two-to-six times the national average, according to First American CoreLogic, a housing data firm. In addition, there are now 3.5 million mortagages at least 90 days delinguent. The pending catastrophe will have a seismic impact on the financial system and the economy.
Until there are realistic solutions to address the housing market and bank losses, nothing will change in the economy. You can bank on that.
Instead many pundits, including Wall Street, are focused on unemployment numbers. However, as most economists will tell you, unemployment is a lagging indicator of economic improvement. Historically, unemployment improves after the recession ends. The recession won't end until housing and banking improve substantially. So before you fall for the rosy economic predictions of many pundits, consider these facts:
1. New homes sales are at their lowest levels since the Commerce Department began tracking the numbers in 1963. The Mortgage Bankers Association's purchase index for new and existing homes fell to its lowest level since 1997, for the week ended February 19. Does that sound like recovery?
2. An astounding 140 banks went under last year, more than four times as many banks as collapsed in the entire eight-year period from 2000-2007. Forty-five banks failed in just the last quarter of 2009. According to the Federal Deposit Insurance Corporation, another 702 banks are listed as currently in trouble. The number of problem institutions on the FDIC's list is nine times greater than it was in 2007. Does that sound like an improving situation?
Now, let's examine why these two sectors have not improved, but gotten steadily worse.
Sales of homes have been driven by bargain hunters leaping on foreclosed homes or short sales. Everything else has practically dried up. Historically, home sales are driven by job and income growth, migration of employees, low interest rates and consumer confidence. By any measure, none of those drivers exist today, except low interest rates. That alone will not move the needle by much.
The banking situation may at first seem to have improved. After all, the biggest banks have clawed back from the financial cliff, thanks to huge federal bailouts that have ballooned the deficit. However, many pundits have missed one big looming negative: commercial real estate. Occupancy rates are falling, values are sinking and the ability of developers to meet mortgage payments and loan covenants have dipped.
If that isn't bad enough, banks and lenders are also facing the another wave of home foreclosures as the last of those budget-busting adjustable rate mortgages wash through the system. Despite all the administration claims it has done to stabilize the home market, foreclosures continue to grow with each passing day. In some large cities, the percentage of homes that banks have file foreclosure on or repossessed is two-to-six times the national average, according to First American CoreLogic, a housing data firm. In addition, there are now 3.5 million mortagages at least 90 days delinguent. The pending catastrophe will have a seismic impact on the financial system and the economy.
Until there are realistic solutions to address the housing market and bank losses, nothing will change in the economy. You can bank on that.
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