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Thursday, September 22, 2011

What Happens If China Calls Our Loans?

A friend of mine asked me a deviously simple but complex question to which I do not know the answer.  I was  hoping that my esteemed readers might have an answer or know a source to go to for the answer.  The question is:

When (not if) China decides to ask for all of its money back from the US government bonds that is owns, what happens if we cannot pay them?  Do they get a lien on government owned property? A lien on all financial assets, like your 401(k)? Can they go after individually owned property, like your home or business?

A lender (like the bank for your home) has certain rights that are written out in an agreement like your mortgage. However, when the government issues bonds, there is no formal arrangement other than the promise to pay interest. The lender can return his bonds to the government and demand money for the current value. So what happens if there is not enough money?

I think it is a good question.  What do you think?  Please let me know.

Wednesday, September 21, 2011

Herman Cain on Israel

It sure would have been nice to have had Herman Cain be the first black President.  We would have a man who knows finance, has run a business (Godfather's Pizza) and knows who are America's friends.  Israel would have been treated like an ally and our only real friend in the Middle East. Yes, things would have been different.

Here is what Mr. Cain says about Israel. Will you tell me how it differs from our President.

If You Mess With Israel, You're Messing With the USA

Herman Cain -,  September 20th, 2011

As the United Nations takes up a vote on a unilateral Palestinian declaration of statehood this week, Americans need to understand what a Pandora’s box this opens – and how it’s a threat to both American and Israeli security.
First, U.N. recognition of a Palestinian state simply throws away years of peace talks with Israel and sets both peoples on a collision course for violent conflict.
We’ve all seen the results of intifadas, loosely translated as “uprisings” in the early 1990s and early 2000s. When Palestinian hard liners didn’t get their way through the Oslo peace process – waves of suicide bombers blew up buses, cafes, markets and shops, tearing apart two societies.
Like any sovereign state, Israel has a right to defend itself. It vigorously did so, taking out family homes of suicide bombers and tightening a variety of restrictions in the West Bank and Gaza. In the process Palestinians who truly want peace have had to face the consequences along with those who are bent on destroying Israel.
Second, such a move by the U.N. would only embolden radicals and add internal legitimacy to their attacks on Israel.
U.N. recognition of a Palestinian state would in all probability lead to a third Intifadah, meaning the deaths of thousands and cycle of violence playing itself out on television sets and newspapers every day throughout the world.
Let’s recall that one of Usama Bin Laden’s main beefs with America has been our support for Israel – Al Qaeda propagandists have relied upon images of Palestinian casualties as a chief recruiting tool in their war against us.
And as we saw on September 11, Islamic radicals don’t just target Israel – they have a bulls-eye painted on America’s back as well.
Speaking of September 11, President Obama ought to remember who our friends are.
I remember watching news reports of the Twin Towers falling, a smoldering Pentagon, and the remains of United Flight 93 in a Shanksville, Pennsylvania field – and feeling even more outrage witnessing TV coverage of Palestinians dancing in the streets as we were attacked.
As president, my top foreign policy priority would be to stand united with Israel. I will not allow the Arab Spring to be the fall of Israel.
A nation that shares deep spiritual bonds, our love of democracy, freedom and personal liberty, Israel has been one of our strongest allies for decades – at least until President Obama took office.
On a visit to Israel, last month, I met with the country's deputy prime minister about the many security challenges threatening the country’s existence – from Iran’s pursuit of nuclear weapons – to the prospect of U.N. support for a Palestinian state. His somber message was this, “Israel will defend itself.”
The Obama administration’s insistence that Israel return to pre-1967 borders, which are militarily indefensible – shows its enemies that the United States may not stand with Israel in times of crisis.
The lack of clarity towards Israel shown by this administration demonstrates weakness and only invites attack, which makes the situation more volatile.
And when Iran’s leaders say that Israel should be wiped off the map, we ought to take them at their word. Hitler said things like that about Poland when he came to power – and guess what — he wasn’t bluffing.
Finally let’s remember how the U.N. has singled out Israel for punishment in their new world order, so its support for Palestinian statehood is just the latest blow.
Resolutions condemning Israel have become pro forma, notably with 22 coming in the 61st General Assembly (2006-07), during a time in which none were passed against the genocide in Sudan's Darfur.
My message for the U.N., Iran, Palestinians and anyone else is this: “If you mess with Israel, you’re messing with the U.S.A.”
And I’ll add, growing up in Georgia during the civil rights movement and graduating from Morehouse College, following in the footsteps of our most famous alum – Dr. Martin Luther King, the Palestinians could stand to learn a lot more from Reverend King than Malcolm X.
It’s the radical element among Palestinians that is keeping peace out of reach. If extremists lost internal legitimacy and their people took the path of non-violence — both societies would be able to co-exist.
They could start by not electing Hamas — a terrorist organization, to power in Gaza as they did in 2006. By not sending their sons and daughters out to blow themselves up in Jerusalem and Tel Aviv, taking with them as many innocent Israeli civilians as they can.
I believe long term peace is achievable between Israelis and Palestinians – we just need to identify the right leaders to get it done.
And from the American perspective, by turning away from Israel when the going gets tough, President Obama is not only failing to get the job done, he is doing more harm than good.
So much for hope, it’s time for a change in Washington.
Mr. Cain, a Republican is running for president of the U.S. He is the former Chairman and CEO of Godfather’s Pizza and past President and CEO of the National Restaurant Association.

More Obama Pay To Play

Once again we see another scandal brewing in the Obama White House with LightSquared, a company in which Obama had owned stock and whose owners are bundlers and friends of the President. It gets worse in that the technology that they are trying to get FCC approval will decimate GPS signals. Additionally one General has reported he was forced to change his testimony by the White House.  I wonder what the press would be saying if this was done by a Republican administration?

This just sounds like another special deal (like Solyndra) for the friends of Obama which will require taxpayers to bail out another firm. Personally, it makes me sick.  Read more about it in the following article by Michelle Malkin, if your stomach will allow it.

Malkin: LightSquared - Obama's Dangerous Broadband Boondoggle

By Michelle Malkin 
Welcome to LightSquared. It's a toxic mix of venture socialism (to borrow GOP Sen. Jim DeMint's apt phrase), campaign finance influence-peddling and perilous corner-cutting all rolled into one.
The company is building "a state-of-the-art open wireless broadband network." Competition in the industry is a good thing, of course. But military, government and civilian aviation experts have long objected to LightSquared's potential to interfere with the Global Positioning System (GPS) satellite network. As the government's own Positioning, Navigation and Timing agency explained:
"The GPS community is concerned because testing has shown that LightSquared's ground-based transmissions overpower the relatively weak GPS signal from space. Although LightSquared will operate in its own radio band, that band is so close to the GPS signals that most GPS devices pick up the stronger LightSquared signal and become overloaded or jammed."
Two high-ranking witnesses -- Air Force Space Command four-star Gen. William Shelton and National Coordination Office for Space-Based Positioning, Navigation and Timing Director Anthony Russo -- have now blown the whistle on how the White House pressured them to alter their congressional testimony and play down concerns about LightSquared's threat to military communications. According to Eli Lake of The Daily Beast, both officials were urged to express confidence in the company and endorse its promise to address any technical concerns "within 90 days."
Gen. Shelton had noted earlier this year: "Within three to five miles on the ground and within 12 miles in the air, GPS is jammed by (LightSquared's) towers. ... If we allow that system to be fielded and it does indeed jam GPS, think about the impact. We're hopeful we can find a solution, but physics being physics, we don't see a solution right now."
Despite industry-wide protests, the firm somehow received fast-track approval for a special FCC waiver that grants LightSquared the right to use wireless spectrum to build out a national 4G wireless network on the cheap. Ken Boehm, of the conservative watchdog National Legal and Policy Center (NLPC) in Washington, D.C., summed up the deal earlier this year: "LightSquared will get the spectrum for a song, while its competitors (e.g., AT&T and Verizon) have to spend billions."
The current "fix" LightSquared proposes to address the interference problems is a costly, conceptual pipe dream that could require massive retrofitting of millions of handheld GPS devices. GPS expert Eric Gakstatter scoffs: "I've been pretty open-minded about LightSquared proposing a solution, but this really insults our intelligence. (A)s we've seen previously with LightSquared, it's not about finding a practical solution for the GPS user community; it's all about selling an idea to the FCC. The problem is that the FCC doesn't have to live with LightSquared's half-baked 'solution'; we do."
So, what's greasing LightSquared's skids? Hint: It used to be known as "Skyterra." In 2005, Obama put $50,000 into the speculative firm -- raising eyebrows even among his water-carriers at The New York Times. The paper noted that Skyterra's principal backers at the time of the investment included four Obama "friends and donors who had raised more than $150,000 for his political committees."
One of those pals who urged him to buy stock in Skyterra was George Haywood, a major Skyterra investor and campaign donor who chipped in nearly $50,000 to Obama's campaigns and to his political action committee along with his wife.
Coincidentally, Obama bought his Skyterra stock the very same day the FCC "ruled in favor of the company's effort to create a nationwide wireless network by combining satellites and land-based communications systems." The Times reported that immediately after that morning ruling, "Tejas Securities, a regional brokerage in Texas that handled investment banking for Skyterra, issued a research report speculating that Skyterra stock could triple in value."
Coincidentally, Tejas and its chairman, John J. Gorman, were also major backers of Obama -- flying him in a private plane for political rallies and pitching in more than $150,000 for his campaign coffers since 2004. Obama sold his stock at a loss in November 2005, but his political relationship with the company was cemented. In 2009, shady billionaire hedge-fund manager Philip Falcone -- whose firm Harbinger Capital Partners is reportedly under investigation by the Securities and Exchange Commission for market manipulation abuses -- acquired Skyterra.
Coincidentally, Falcone, his wife and LightSquared CEO Sanjiv Ahuja have contributed nearly $100,000 between them to the Democratic Party during critical White House meeting periods and negotiations over LightSquared's regulatory fate.
Oh, and coincidentally, there's $6 billion earmarked for a "public safety broadband corporation" buried in the Obama jobs proposal just as LightSquared pushes into that market, too.
It's all just one strange quirk of timing, Team Obama shrugs. Except, as we all should know by now: There are no coincidences in Chicago on the Potomac. Just an endless avalanche of quids, quos and taxpayer woes.
Michelle Malkin is the author of "Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies" (Regnery 2010).

Standard and Poor's Taken To The Woodshed

As we predicted on August 8, 2011 in our posting (entitled "S&P Warned Us, Now We Get To Pay The Piper), Standard and Poor's now is the subject of a SEC investigation on top of inquires from local governments, Treasury and the US Senate.  How transparent can this Administration be? It was clear to everyone who pays attention to financial issues that there would be a downgrade of US credit if the government did not meet the  budgetary requirements set by  S&P in July.  For them not to acted as promised would have made them "the little boy who cried wolf!"  

In our opinion, S&P did the right thing based upon their appraisal of the financial stability of the US government. Would we rather not seen the downgrade, most assuredly, however, it is time for someone to tell the King that he has no clothes.  This country has issues and its governmental officials on all levels are not attending to business. We need to addressing the deficit and the debt before others (i.e.China) tell us what we must do.

The lesson learned by many from the governmental actions against S&P and others is that if you are in the financial business you do not want to say anything negative.  Everything is rosy, profits are up, the future looks great will all you will be able to put in print.  This will have a chilling effect on advice and unbiased appraisals of companies and governments which must contain both negative and positive elements. If not, the advice is worthless. 

Trampling on S&P  might make great press for your base however, in the end will do extensive damage to investors who need an unbiased review of the financial stability of the instruments they are selling. If these firms can only print "good news", their entire reason for existing, evaporates.

Instead of the downgrade being negative, it should be viewed as positive.  It pointed out a problem that in S&Ps opinion demanded a decline in the rating.  Even if the rating is proven erroneous sometime in the future, it was their conclusion at that point in time. We must have independent agencies that will honestly evaluate debt and tell the investing public the truth. To have government insist that a debt instrument is better than the rating company believes it to be would be the end of the ratings system.

The following article posted on Yahoo finance today goes further into detail.

Wall Street Dragged into S&P Downgrade Witch Hunt

By Jeff Macke | Breakout –September 21, 2011

The issue may have been moved off the front page of the newspapers, but the government's reprisals against those even tangentially connected to Standard & Poor's downgrade of US debt continues. The latest development reported yesterday, is the SEC allegedly issuing subpoenas to hedge funds and other firm that placed "unusually large bets that markets would decline" ahead of the ratings agency's August 5th downgrade.
S&P itself is already under assault from local governments, the US Senate, the Treasury Department, and perhaps most daunting, the new Czar of Financial Morality, Warren Buffett. Curiously none of this official outrage is being directed at the entire ratings industry for its nakedly conflicted business model or its role in the housing crisis. The government (and Mr. Buffett) are targeting Standard & Poor's exclusively because the agency had the audacity to point out the obvious fact that betting on America is no longer the "sure thing" it once was.
It's worth noting that the ratings industry got a pass on the 2008 financial crisis because the government upheld their First Amendment rights to an opinion. Now S&P exercising that same right in regards to American debt is unleashing hell upon the agency and market bears in general. It would seem the First Amendment applies optimistic self-serving idiocy, not negative views, flawed though they may be.
Did hedge funds hear rumors of a downgrade? Almost certainly. So did I (and I said so on Eric Bolling's "Follow the Money" program that day). Stifel Nicolaus wrote of "chatter" regarding the downgrade the morning of August 5th. Pretty much everyone knew, even if no one could confirm it. A downgrade of the US was in the air and had been since the move was threatened three-weeks prior to August 5th. Traders didn't need Standard & Poor's to tell them that stocks were in trouble, it was quite obvious to anyone with a brokerage account or access to a newspaper.
The SEC investigation is intimidation of the lowest form. It says the market isn't free to those who are bearish. The investigation says negative trades will be punished, should they prove prescient. But only selectively. The SEC is all over these trades but has never provided a satisfactory answer regarding the heavy put activity in airline stocks prior to September 11th, 2001 but it's cracking down immediately on a couple funds who correctly bet that stocks were headed lower. It's appalling.
If you're of the belief that SEC subpoenas are unrelated to the abuse being heaped upon Standard &Poor's for the downgrade, then you live in a mental Toon Town or I'm way too cynical. The SEC is a different, obstensibly independent group. It also seems politically expedient for any and all public officials to go after both Standard & Poor's and "the rich." There are no coincidences in Washington, D.C. particularly with this kind of coordinated attack.
The way our public officials are squashing S&P's right to do their job and market participants' right to both buy and sell stocks is troubling. This isn't an issue of whether or not you like or approve of rating agencies or hedge funds. This is an issue of the government selectively harassing and prosecuting that which they find too negative. It's present day America's version of sending dissidents to Siberia and it's disgusting.

Tuesday, September 20, 2011

Republican Candidate Attitudes Toward Immigration

The Republican candidates attitudes toward immigration are not very positive toward future elimination of illegals.   The following is a report by show that no one except Michelle Bachman gets a rating that makes us comfortable.

As we have written before, our viewpoint is that all ILLEGAL immigration should be outlawed and this survey does not make us feel comfortable. Are we so out of touch or are there others who are not comfortable with the results of this survey?  Please let us know by commenting.

 2012 Presidential Hopefuls' Immigration Stances

2012 Presidential Hopefuls' Immigration Stances

Presidential Grid
Updated: 09/08/11
White House

2012 Presidential Hopefuls



Your comments, additions & corrections: We want to hear from you, especially if you have links to media reports of immigration statements and positions that we don’t have. Send them to:
These are snapshots of views that are bound to change: We expect stances, our ratings of stances and the grades for these Presidential Hopefuls to change a great deal during 2011. We will re-evaluate every Hopeful and every position once every week. NumbersUSA expects that as American voters interact with the Hopefuls their immigration positions will improve.
Why these people? Their appearance here is based on the interest they have shown in potentially running for President, and in the interest that the news media has in them, plus their standing in preference polling. We will be adding other people to – and removing people from – the grid as these levels of interest shift.
Why these categories? The 12 categories on this grid deal with the vast majority of problems with current immigration policies that grant more than 1 million permanent work visas to immigrants each YEAR, and which allow an estimated 7 million jobs in construction, service, manufacturing and transportation to be filled by illegal foreign workers. These policies also drive the majority of additional demands on the physical, social and natural infrastructures of the country, since new immigrants and births to immigrants account for more than three-quarters of the 30 million additional people added to the U.S. population growth each decade. Most of the 12 categories were among the recommendations of the bi-partisan congressional/presidential commission chaired by Barbara Jordan.
What counts most in ratings? These are not Report Cards on past actions, which matter but not as much as what these politicians now say in the news media or on official websites. These grades and ratings are about what a Hopeful says a President should do about immigration. We look at contradictions and changes in stances. We generally give the most weight to the most recent statements and actions. To view the specific actions and statements of a candidate, click on his/her photo.
Why are we such tough graders? The ratings and grades reflect an urgency about the 22 million Americans who want a job but can't find one (the government's "U-6" unemployment category) and about the federal government continuing to force massive population growth while the nation is unable to meet its infrastructure and environmental goals with the current population size. Refusal to deal with a specific immigration category draws an "Unhelpful" rating. Merely avoiding "bad" immigration positions and drawing an “Unhelpful” in all the categories will result in a “D-minus” grade.

Other Potential Candidates:

These politicians don't meet the overall criteria for "major presidential hopeful" to appear at the top of this page. But they are people of considerable public interest in relation to the national race.