Saturday, December 13, 2008
Save the Drama
Congress (the Senate to be precise), had made a critical vote about the Big Three Bailout. They voted NO to the bill. They had used the legislative authority authorized by our Founding Fathers in the U.S. Constitution to deny bailout funds to car-makers. Not that this was the final word in the matter. More than likely, the measure would have been picked up by the House of Representatives... revived... revised... and resubmitted to the Senate for another vote. But it was the vote that never was. The Department of Treasury under the approval of the Executive Branch of Government offered up TARP funds to Detroit.
Why all the drama? Good question. It appears that no one ever needed the approval of Congress to begin with. While our Founding Fathers decided that ALL spending measures must originate in the House of Representatives. However, the Executive Branch was once again by-passed the House, the Senate, and for all intensive his own party to extend a helping hand to the car makers.
To put it frankly, there are so many piggy banks in D.C. that can be raided, Congressional approval was only a minor formality to getting this deal done. Here are the piggy banks I can think of right now:
2. TARP Funds
3. Wall Street Emergency Funds
4. The Federal Reserve (Who is always intended to be the lender of last resort).
One thing is for certain, before our eyes government transparency, an essential element to democracy, is being destroyed. Without honesty and clarity, government (any government) becomes a tool to those who are in power. In the end the power is always used against the masses. The Roman Republic became the Roman Empire under the shadowy guises of looking out for the "people's best interests." A powerful few manipulated rules, laws, a republic traditions. The transformation continued until Rome was controlled by a dictatorship... then a triumvirate of strong men who eventually ran the empire into the ground. Without democracy, this country is dead... The people have no say in a government that is not representing their interests.
If the auto industry cannot get consumer money from selling cars, I hardly believe they should be given tax payer money to continue the same reckless policies that have landed them in this predicament. More anecdotal evidence of the union gone wild... One police officer said his best arrest came from a Ford worker who was one his way home from work. In Ohio, you are legally drunk at .08. You are smashed at .3. This fellow was at .5 which in most cases means he should be in a coma from intoxication. Instead, I remind you that he was on his way home from work, as in pulling right out of the plant. In another scenario, I was informed that the best duty to get as an employee is to be sent to the Gin-Pool. This means that when you report to work, you report to a staging area and wait to fill in for someone who calls in sick. If no one calls in sick, then you get to play cards and nap all day. At one auto plant, there are over 200 workers who are part of the Gin Pool. as for the auto industry, I have always made it a point to buy American cars... I just feel good about employing a fellow American.
The story to follow deals with a Sunshine Law suite filled by Bloomberg against the Fed. As it stands, the Fed has loaned well over a trillion ($1,000,000,000,000) to various financial institutions in the United States. These loans were not made with Congressional authority, nor any legislative oversight. Furthermore, now that the Fed has made these loans accepting Lord only knows for collateral, non one... NO ONE can find out who the loans were made to, nor the collateral that was used as security for the loan. While the Fed is using the official excuse as "trade secrets" for non-disclosure, when it is OUR money and OUR debt, every single American deserves to know. And this is why governments need transparency!!! I will once again write every Congressman I can reach... I beg each reader of this blog to do the same!!!
Unemployment revisions suggest that the numbers will always be estimated on the low end... revised a week later as to help cushion the real blow. No sense on hitting XLY or XLI yet, but I will start bidding on June puts. Wynn and MCRI still stand as slam dunks here. I am increasingly suspicious that inflation, once America's leading export could well be replaced with deflation. Even though treasuries are at historic lows, there is more to be said on this subject. Shorting the dollar may be another play in the deflation scenario. UDN is a consideration as well.