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August 4, 2009

Cash For Clunkers Is WORKING So The Republicans Want To Stop It?!

Wow — what a beautiful thing!  Ford Motor Company announced yesterday that in July, for the first time in 2 years, new vehicle sales have increased!

Something positive is happening in our economy slowly but surely. It seems that those stubborn dark economic clouds lingering over the nation are beginning to clear.  Homes sales have increased, the stock markets are up and now American car sales are up. Yeah!

Is it OK for me to whisper the word trifecta?  As in the three main areas of our economy are slowly grinding their way UPWARDS!

Cash For Clunkers

The Cash for Clunkers program has been an astounding success. Addressing two of the big three items topping President Obama’s current agenda — the economy, the environment and healthcare.  The Cash for Clunkers program has allowed consumers with oversized gas-guzzling vehicles to trade them in for newer, more fuel-efficient vehicles, at a reduced cost.

The consumer wins by driving away in a car that costs them less to purchase and less to own and operate.

The environment wins because of the increased fuel economy (an estimated 10 mpg saved per trade-in) and decreased emissions inevitably given off by the ‘clunkers’.

The automakers win by getting a tremendous boost to their sales and profits.  Interpretation — mo’ money, mo’ money, mo’ money!

It’s a good day in America when our biggest manufacturing industry does well.

For the skeptics, the real questions are:

1.  Has the United States of America’s economy benefited from the Cash for Clunkers program?

2.  If additional funding passes will it continue to benefit the economy?

3.  Will this additional funding help consumer confidence and help to jump start spending again?

The answers are, in no particular order, yes, yes and yes!

Most economists agree that people spending money is what reverses a recession. It’s not complicated, people have to start spending.  When people start spending demand for goods and services increase and people get hired and then those hired spend more and because they are spending more demand for goods and services increase and so the cycle continue and then we see a boost in GDP.

When the GDP increases some inflation usually follows BUT that means that our economy is seriously improving and higher inflation equates economically to lower unemployment.

When Ford Motor Company and other American car companies sell more vehicles, they demand more goods from suppliers – not just auto part suppliers, but paper suppliers and ink suppliers and cafeteria-food suppliers and hand-soap suppliers and transportation providers, and the goods and services from thousands of other suppliers. In turn, those companies demand more from their suppliers and the economy heats up.

Right now, thanks to President Obama’s Cash for Clunker Program our economy has enjoyed a week-long window of collective restored consumer confidence – even stock sales are on the rise! Nice!!!

Cash for Clunkers has done in one week what what the top economic strategists and hundreds of lawmakers and thousands of experts and billions of dollars have not yet been able to pull off in ten months – it got the economy rolling again!

So now the program needs two billion additional dollars – give it to them!

Instead of shouting HALLELUIAH that our economy is seeing some light, several Republican politicians have sneered, scoffed and scorned the program.  I honestly believe that the ONLY reason they are trying to knock the program is because they can see its success and they do not want to see President Obama and the democrats do anything that is beneficial to you and me (Americans in general) because it will affect the number of Republicans who get re-elected in 2010.  It is that plain and simple folks; the Republicans prefer to see the democratic programs fail just so that they (the Repubs) can benefit politically.

This is an extremely selfish way that the Repubs choose to operate and I don’t like it one bit.  I want to see the Democrats programs succeed so that you and me — all of us — can all succeed.

I hope that our elected politicians have the collective common sense to agree that the Cash for Clunkers program continue.

It is important that YOU contact YOUR Senators and Congresspersons and let them know that this program is important to all of us and America’s economic health. 

This is our country and we the people must stand up for what’s right for us individually and collectively and we must let our politicians know that they work for us and we expect them to do what is best for we the people otherwise we will vote them out of office.

Go to http://www.usa.gov/Contact/Elected.shtml and search for your senators by name, state, or congressional class and visit their websites. 

Call both your Senators and your Congresspersons and let them know that you want the Cash for Clunkers Program to continue.

June 10, 2009

Banks Allowed To Payback TARP Money – Government Predicts A Profit From The Investment

Ten big banks may be thinking that they may soon be able to sponsor golf tournaments, fly their corporate jets willy-nilly, hire foreign workers instead of American citizens and pay their executives preposterous salaries once again without interference from our government.

The real reason the banks are in such a hurry to repay the TARP loans is that they seem to actually believe that by repaying the funds the government will no longer intervene in their business practices – they’re wrong.

They’re wrong not because President Obama and his administration wants to be in the banking business but because Obama and his administration is going to continue to hold the banks accountable until President Obama believes that they have dug themselves out of the deep hole that they’re in and that the banks are on a solid foundation and that American depositors monies are safe and secure.

The banks are anxiousness to win back their independence but they might be acting prematurely.  Let them be warned, if they find themselves in another deep hole President Obama most likely will not save them a second time and what will they do then? They should really, really ponder that.  If I were a bank executive I would hold onto the monies until I was 200% sure that my bank was on a seriously solid foundation.

A concern of the Obama administration is that if big banks rush to return bailout money, it could prevent them from having enough capital to continue lending.  The Treasury Department, in conjunction with the Federal and other bank regulators conducted stress tests of the 19 largest banks this spring to see if they had enough capital to withstand worse-than-expected economic conditions.

Nine passed the test. But 10 others were required to raise a total of $75 billion as a cushion against potential future losses on bad mortgage loans and other investments if the recession worsened. The Federal Reserve said Monday that the 10 banks including Bank of America Corp and Wells Fargo & Co had submitted acceptable capital-raising plans.

Eight of the nine banks that were found to not need new capital following the government’s bank stress tests last month said they will pay back TARP funds.  They are:

JP Morgan Chase, Goldman Sachs, American Express, Bank of New York Mellon, State Street and regional banking giants Capital One, BB&T and U.S. Bancorp.

Investment bank Morgan Stanley which was the only financial firm that regulators did ask to raise money after the stress tests confirmed it also won approval from the Treasury Department to pay back $10 billion.

Chicago-based Northern Trust which received $1.576 billion in TARP funds was not part of the bank stress tests but said on Tuesday that it had also won government approval to exit the program.

All 10 financial firms indicated that they intended to pay back TARP funds by redeeming the preferred shares the government acquired in them last fall. Such a move would return approximately $68 billion to the government’s coffers.

So far, the Treasury Department has allowed nearly two dozen small, mostly community-based lenders to redeem the government’s preferred shares, representing nearly $1.9 billion in taxpayer money.

In a press conference Tuesday, President Obama said such repayments “a positive sign,” but warned that the financial crisis still presented challenges to both American businesses and consumers

“This is not a sign that our troubles are over, far from it,” he said.

Proceeds received from those 10 banks will be applied to the Treasury Department’s general account and some of the funds will used to promote financial stability should the economy take a turn for the worse. A portion of those funds will also be used to reduce Treasury’s borrowing and rein in the nation’s rapidly rising deficit.

Regulators are fearful that major financial institutions which are responsible for issuing a substantial amount of credit to the U.S. financial system may cut back on lending even further as a result of paying back TARP funds and could therefore endanger what may be a budding economic recovery.

Several bank chiefs downplayed these concerns in statements issued Tuesday stating that they will be there for consumers and businesses seeking loans.

“We fully expect to continue to vigorously offer lending opportunities to our credit-worthy consumer, small business, corporate and institutional customers, invest for future growth and support the U.S. government’s overall efforts to stimulate the economy,” Richard K. Davis, chairman and CEO of U.S. Bancorp, said in a statement.

Watch President Obama’s Press Conference about TARP money payback:

 

May 7, 2009

The Middle East Goes To Cuba: Qatar To Build Luxury Hotel In Cuba

cuba 

Well, if America wants to be a major player in the redevelopment of Cuba then we better start talking with Cuba in a meaningful way real soon before the rest of the industrial world beats us to it.  Do American businesses want to do business with Cuba?  Of course they do, they don’t want to miss out on all the opportunities to bring Cuba into the 21st century and all the money to be made doing so.

Here in America we have been conditioned to believe that Castro’s Cuba is all bad and that Cuba is automatically our enemy without knowing why Castro’s Cuba look at America as a fiend – it’s not just about communism.

Before the Cuban Revolution that led to the overthrow of U.S. backed Dictator Fulgencio Batista in 1959, Havana was the original Sin City.  Havana was Las Vegas, before there was a Las Vegas.

Because gambling, liquor, prostitution, etc were all illegal in the United States, rich and famous Americans were looking for a place where they could revel and paint the town red without going to jail. They discovered Havana and since it is a tropical paradise and only 90 miles from Florida it became wealthy Americans’ winter destination and airlines and cruise lines offered grand tour packages to Havana.

American mob bosses benefited from Cuba’s President Fulgencio Batista’s corrupt regime and bribed them and created a glamorous playground for the rich. They created a prohibition haven, a place of safety from prosecution overflowing with dazzling nightclubs and mojitos flowing all day, outrageous cabarets, dancing girls, all-night bars, backstreet brothels, fancy hotels and resorts, gambling, music, drugs, sex and scandal.  Affluent Americans and movie stars did not disappoint the mob investors; they went to Havana in droves to whoop it up!

Many Cubans were outraged by the reveling and debauchery and Castro who was a young revolutionist became popular and his philosophy became widely accepted. When Castro overthrew Batista he had a new vision for Cuba and Americans were banned from travel to his tropical paradise.

Relations between the U.S. and Cuba quickly deteriorated when Castro nationalized many of the U.S. owned industries in Cuba. Each time the Cuban government nationalized American properties, the American government took countermeasures, resulting in the prohibition of all exports to Cuba on October 19, 1960.

In March 1960 President Eisenhower had quietly authorized the CIA to organize, train, and equip Cuban refugees as a guerrilla force to overthrow Castro. Consequently, Cuba began to consolidate trade relations with the communist Soviet Union which lead to the United States breaking off all remaining official diplomatic relations.

On January 3, 1961 the US withdrew diplomatic recognition of the Cuban government and closed our embassy in Havana.

So here we are 48 years later and Cuba and Qatar have signed an agreement to build a $75 million, 450-room resort on a cay south of the island.

Cuba and Qatar will spend 14 months negotiating financing details for the five-star “Gran Paraiso” or “Great Paradise,” said Ghanim Bin Saad al-Saad, president of state-owned Qatar Diar Real Estate Investment Company, construction will take another year and a half with a goal to open in 2015.

The resort is planned for Cayo Largo Sur, a strip of white sand, coral reefs and warm, calm waters 105 miles south of Havana that is already home to a cluster of high-rise hotels. The Gran Paraiso will also include 60 retreat villas that could be expanded in the future.

Tourism is Cuba’s second-largest moneymaker behind nickel exports.

A record 2.35 million foreigners visited last year, mostly from Canada and Europe. That was a 9.3 percent increase over 2007.  Foreign arrivals are up another 2 percent so far this year despite the global economic slowdown.

America should not continue to snub Cuba.  Even though we’ve not been friendly neighbors, Cuba really hasn’t done anything harmful to America. Cuba is very close to us geographically and we should have a respectable relationship with them. Sending the CIA to Cuba to overthrow Castro was not an endearing thing to do. 

If we continue our relationship with Cuba as is, out of necessity Cuba might befriend nations that are adversarial towards America.  We don’t have to be their BFF but we should be cordial and reopen trade with them.  Why not?

Will America come out and play with Cuba?

May 5, 2009

President Obama Cracks Down On Off Shore Tax Havens

ugland-house-cayman-islands  In life some people have most everything stacked in their financial favor but it doesn’t stop them from being greedy.  The wealthy in America have had tax breaks that allow them to keep more of what they earn AND the wealthy have also had laws that have allowed them to move their monies out of America (where they earned the money) to countries where they don’t have to pay taxes on that money and therefore keep more money in their greedy little paws while keeping tax money out of the Feds bank account. 

The wealthy has been successfully hiding their money from the American government for decades; money that could help America to pay for military expenditures; money which can help to build roads; money which can be used to repair bridges; money which can be used to pay for natural disasters, etc.  President Obama is going to change some of that.

President Obama has decided to crack down on corporations who move their money out of the country in order to avoid paying taxes.  He announced proposed changes in tax law that would end much of these loopholes and could raise about $21 BILLION in revenue each year.

united-bank-of-switzerland-zurich  The move comes as the IRS continues its crackdown on offshore accounts through a high-profile investigation involving thousands of people with Swiss bank accounts managed by the United Bank of Switzerland (UBS)  in Zurich. The proposal restricts the ability of companies to defer taxes owed on profits earned overseas and eliminates a popular method, known as “check the box”, for reducing taxes through transfers of money to overseas affiliates.  The proposal will also target individuals whom the IRS suspect of hiding income offshore and these individuals would bear the burden of proof, rather than the IRS.  With the proposed changes IRS penalties for failing to make required disclosures about foreign accounts would be doubled in some cases under the plan.

The plans still have to get through Congress, but the president said he was determined to close offshore tax loopholes.  President Obama said, “On the campaign, I used to talk about the outrage of a building in the Cayman Islands that had over 12,000 businesses claim this building as their headquarters. Either this is the largest building in the world or the largest tax scam in the world. And I think the American people know which it is.”

The President was referring to The Ugland House on Church Street in the Cayman Islands – pictured above – which now has 18,000 corporations registered as having their headquarters there!  Look at the picture, do you think 18,000 corporations have their offices there?

The Cayman Islands is a tiny overseas territory of Britain.  The Cayman Islands have more registered businesses than they have people.  The Cayman Islands is the fifth-largest banking center in the world with $1.5 trillion in banking liabilities. With a population of 50,000 it has the highest per capita income in the Caribbean and 90% of its economy is based on ‘financial services’.  There is no income tax or capital gains tax or corporation tax. The government’s primary source of income is indirect taxation such as sales tax, value added tax or goods and services tax.

The government also charges licensing fees to financial institutions that operate in the islands as well as work permit fees for foreign workers ranging from around US$500 for a clerk to around US$20,000 for a CEO.

I love the fact that President Obama has come into office and shows his strong commitment to national defense, strong commitment to balance our budget and an unapologetic commitment to moral and family values that he is not afraid to wear on his sleeves. I am happy to see President Obama trying to get America fiscally healthy again.  It’s a difficult task, but I’m glad to see his efforts in trying to reclaim money that have been stolen from the American government so we can spend what we have and not have to continue borrowing from China and adding to our children and grand-children’s tax debt.

April 28, 2009

Bank of American and Citibank — More Capital Please!

The Federal Reserve conducted stress tests on 19 of the nation’s biggest banks, their aim was to determine which banks are healthy enough to survive another financial shock and which may need additional government support.

Based on the results of the stress tests government regulators have told Bank of America Corp. and Citigroup Inc that they need to get their capital reserves together! The capital shortfall at BoA is believed to be in the BILLIONS.

It sounds to me as if executives at BoA and Citi are still in denial and don’t believe that the stress tests are correct since they have objected to the findings and are planning to respond with “detailed rebuttals” that will show that they do not need to have more capital if they have  another financial meltdown. 

Government officials did say that even though BoA and Citi are being told to raise more capital — they shouldn’t be viewed as insolvent — they just need to shore up their assets and make sure that they are in excellent financial order — not just mediocre financial order.

The additional capital is intended to cushion the banks against potential future losses should economic conditions worsen.  Federal officials have also reiterated in the report that they won’t allow any of the top 19 banks to fail.

It is also believed that regional banks with large commercial real estate loan portfolios such as Wells Fargo, Fifth Third Bancorp and Regions Financial Corp may have also performed poorly on the stress tests and are likely to need additional capital as well.

(more…)

April 24, 2009

Should Credit Card Rates Freeze?

credit-cards  While President Obama met with executives from the leading credit card companies yesterday two senators have called on the Federal Reserve to immediately implement an emergency freeze on interest rates tied to existing balances on credit cards.

The Federal Reserve plans to put a new set of rules in effect for credit card lending beginning July 2010 but that’s an entire year from now.

In the meantime Senators Chris Dodd (D-CT) and Chuck Schumer (D-NY) wrote a letter to the Federal Reserve Chairman Ben Bernanke and other regulators saying that companies are increasing interest rates now before the new rules go into effect so Americans need help now.

“Consumers describe situations to our offices in which the interest rates on their accounts have doubled or tripled overnight, without any misconduct on their part,” the letter says. “This kind of practice clearly violates the spirit and intention of the rules, even if the delayed implementation date has the effect of making such behavior legal.”

Congress is currently developing legislation that will rearrange and organize the Fed’s new rules but they still have a way to go.

After meeting with 14 executives from companies like Bank of America, Wells Fargo and Visa, President Obama said that his administration would work with Congress to evaluate proposals for reform.

“We’re at a time where issues of credit and how businesses and families are able to finance everything from a car loan to a student loan to just paying their bills every day is on a lot of people’s minds,” President Obama said. “We want to preserve the credit card market, but we also want to do so in a way that eliminates some of the abuses and some of the problems that a lot of people are familiar with.”

The card executives at agreed to work with the Obama administration to address the President’s concerns according to the American Bankers Association, and are currently working to implement the Federal Reserves’ new rules.

(more…)

April 16, 2009

View President Obama’s Tax Return

As another demonstration of the President’s commitment to openness and transparency, the White House issued releases making the President and Vice President’s tax returns public. If you would like to see the Obamas and Bidens tax return go to:

http://www.whitehouse.gov/blog/09/04/15/Release-of-the-President-and-Vice-Presidents-Tax-Returns/

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