Divemedic

US credit rating drops

The US saw a drop in its AAA credit rating on October 12th, with the rating falling to AA+. Now, AA+ is still a respectable rating, but the trend is disturbing. It isn’t like we didn’t see this coming. Since 2008, we have been getting warned about this. From the October 12th announcement:

“You can see an indication of concern about the easing course the Fed is likely to continue on,” said Sean Egan, who runs the Egan-Jones credit rating agency in Haverford, Pa. “There’s a number of items that are going to be difficult to reverse as we get down that road, starting with the dramatic underfunding of state pension funds.”

The government has run two straight budget deficits of more than $1.4 trillion, with more to come for the foreseeable future. Meanwhile, the Fed is making noise about printing more money to pay down the debt, which will have the effect of devaluing the dollar. Paying the debt with devalued dollars is certainly a way to get rid of debt, but if you are a creditor, this is not good news.

Comments by the Fed have sent the dollar tumbling and helped increase gold prices by over $125 an ounce in the last month. Gold is currently selling at $1378 an ounce, almost double what it was on Obama’s inauguration day.

With this development, it is safer to lend to Warren Buffet than it is to lend to the US Government.What this means is that there will be considerable pressure on the interest rate that the government will have to pay in order to attract “lenders.” People traditionally buy savings bonds and treasuries, which pay relatively low returns, in exchange for the security offers. As the risk you are taking gets closer to the odds of winning at a Vegas roulette table, the payoff must increase to compensate for that risk.

This means that interest on the debt will begin to take up more and more of the budget, as the cost of borrowing increases. This will increase deficits, and cause the rating to be reduced at an increasing rate. Anyone who has ever gotten into credit trouble can tell you that your credit score goes down as your credit card balances increase.

By Divemedic, ago

QE2

It turns out that I was wrong. Obama has not spent $3 trillion more than he has collected in taxes-he has spent $4.5 trillion more than he has collected in taxes. The Fed, which has held interest rates near zero since December 2008, launched its plan of printing money to buy US Government debt nearly two years ago, swelling its balance sheet to nearly $2.3 trillion from a pre-crisis level of around $800 billion.

Two years ago, when the program began, the price of gold was just a bit over $700 an ounce. It is now selling at about $1350, or nearly double that. In two years.

Minutes due Tuesday from the Fed’s most recent policy-setting meeting may show that the Fed is planning to launch another round of printing money to buy government debt. Inflation, here we come. Buy gold, buy gold now. Maybe we will see gold hit $3000 before the next election. I hope not, because what that would mean for our economy, I dread to imagine.

By Divemedic, ago

Florida Ballot Amendments, 5 and 6

I am researching the Proposed Constitutional Amendments on Florida’s Ballot for 2010, so that I can be an informed voter when I hit the polls in less than a month. I figured that I would share my views, so that others could be informed as well.

Amendments 5 and 6 are being done together because they are Amendments purportedly being placed on the ballot to eliminate gerrymandering of the State (5) and the National(6) legislative districts. Gerrymandering is the tendency for politicians to redraw legislative districts in order to favor their own pet causes.

Redistricting is the act of re-dividing the state into new election districts. By law, it happens every 10 years. And each time lawmakers begin the process, which involves using sophisticated computing, it draws intense scrutiny from critics who accuse incumbents of choosing which voters to put in their districts to ensure re-election.

Pro: Proponents say that these amendments would establish fairness standards for use in creating legislative and congressional district boundaries. While protecting minority voting rights, the standards would prohibit drawing district lines to favor or disfavor any incumbent or political party. Districts would have to be compact and utilize existing political and geographical boundaries. In other words, natural competitiveness and fairness would be required.

Cons: I could not find an opposition group in my search, but this is what I think: The group pushing for this is fairdistrictsflorida.org. On thier site, they claim to be “a nonpartisan group of Florida citizens working to establish constitutional rules to stop politicians from drawing districts to favor themselves.” However, also according to the site, they are sponsored by the League of Women Voters, AARP, NAACP, Democracia Ahora, and the Florida League of Cities, all of whom are dominated by Democrats and their causes. It is run by lead by former Miami Mayor Manny Diaz (Independent, former Democrat), former Senator and Governor Bob Graham (Democrat), former Attorney General Janet Reno (Dem), former State Senator Daryl Jones (Dem), former Comptroller Bob Milligan (R), former Assistant Secretary of the Interior (in the Nixon Administration) Nat Reed (Progressive Republican), and former Judge (and director of several environmental groups, such as the Everglades Foundation) Thom Rumberger (R).

The districts are to be redrawn, but by whom? With the kind of Democrat and RINO support that is behind this amendment, it makes me wonder what the angle here is. According to sources I could find, the law would require districts to be divided in straight lines. This is, in my opinion, designed to use the heavy population of the coast to dilute the rural populations of the inland areas.

This appears to me like the Democrats are trying to wrest power from the Republicans by changing the map of Florida’s legislative districts.

Even though I don’t like either party very much, I do not like many of the laws that the Florida wing of the Progressives have pushed on us, especially in the gun laws department. I think I am going to vote no on this one.

By Divemedic, ago

Florida Ballot Amendments, part 2

I am researching the Proposed Constitutional Amendments on Florida’s Ballot for 2010, so that I can be an informed voter when I hit the polls in less than a month. I figured that I would share my views, so that others could be informed as well.

Amendment two:
This amendment is to exempt military members who are deployed outside of the Continental United States, Alaska, and Hawaii from all property taxes on their homestead.

Pro: Those who favor this amendment say that military members who are not able to live in their homes should not pay taxes on it, and besides they are serving their county and should not have to pay taxes.

Con: Those opposing it say that this is an unnecessary perc for a volunteer military who is already being paid for their service.

Vote yes to exempt them from taxes, vote no if they should pay them.

My Take: This exempts military personnel outside the US from property taxes. At first blush, this looks like a tax cut, and I am all about tax cuts. What this really is, though is creation of yet another class of super citizens that get a special privilege because they work for the government. This does nothing to curb government spending, or to cut taxes overall. I will always vote no to anyone spending my money, except for me. My taxes are already high enough. If this passes, they will have to go up again to compensate. No thanks.

This bill will probably pass, because the only party that claims to like tax cuts likes kissing military ass even more. Expect them to get a cut, and expect your taxes to go up and pay for it.

By Divemedic, ago

Florida Ballot Amendments

I am researching the Proposed Constitutional Amendments on Florida’s Ballot for 2010, so that I can be an informed voter when I hit the polls in less than a month. I figured that I would share my views, so that others could be informed as well.

Amendment one:
This amendment is for voters to decide on whether to repeal an earlier constitutional Amendment that mandates the use of taxpayer money to support the campaigns of candidates running for statewide office.

Pros: The people who favor this Amendment say that politicians have plenty of money, and certainly don’t need to be spending tax money to get elected.

Cons: Those against the Amendment say that it is in place to help the little guy who can’t raise much money get elected.

Vote yes if you want politicians to spend their own money to get elected, vote no if you think taxpayers should foot the bill to get politicians elected.

Me? I think that someone spending tax money is spending money that the government already took from me, and is therefore spending my money. I will vote against anyone or anything spending my money, except me. I will vote yes on this amendment.

By Divemedic, ago

Government workers

No one knows how hard it is to get a government worker to do something any better than another government worker. We have a printer in our report room for two computers to share. It was connected with a USB cable, and depending on who needs to print, we had to plug the cable into one computer or the other. This printer is also a network capable printer, and I saw no reason why we had to continually move the cable. I pointed this out to the chief one day, and he ordered IT to come out and make the change. So, IT came out about two weeks later, removed the USB cable and plugged it into the city network.

The printer didn’t work. They never installed and mapped the printer on the computers that needed it. Computers sitting right next to the printer. I put in a work order and was told how to map the printer. I didn’t have the administrator privileges to make the changes, and IT is always stuffy about users messing with settings. Everything is locked out on the computers. This is the email I sent, sending a copy to everyone in the chain of command, even the chief:

Ever since IT installed the new printer in the station, the printer has not worked. I contacted IT this morning, and they said that each individual person who uses that computer has to map the printer for their use, or the printer will not work. We have never had to do this before, and I am not sure how workable that solution is, especially considering that we have been told many times that we are not to be making changes to department computers, and cannot make the changes without administrator privileges. Is there a way to get this printer working that does not involve every employee who uses it having to make changes?

IT responded with:

Hey, I have this link for you that installs it. So if you could forward this to anyone who needs it. First delete the printer that is there now. Then you will need to click the link below. You will need to agree or open and it will install for you. The printer que box will pop up once it has installed. All you need to do is close it and you are finished. Call me if you still have an issue. The reason you need to load this is because network printers are per profile not pc. But this link will make it easy for everyone to load.

Of course the link didn’t work. No one had the permissions to use the link. Look, if you are in IT and you fix it so no one can make changes to the computers except you, then don’t be angry when people expect you to actually come out and make those changes. Anyway, I got everyone who uses those computers to send a “Reply to all” that they could mot make it work. After the Chief got about 30 emails on the subject, he finally replied with this:

IT *will* correct this issue so you do NOT have to do what he’s saying….the “shared” printer is supposed to be automatically mapped to all the computers in the station. 

 The problem with all government jobs is that it is too hard to get rid of the dead weight. I say this as a government employee who is constantly frustrated at the things other government employees get away with.

By Divemedic, ago

Mortgage Bankers Association Strategic Default

I wrote several posts over the past few months talking about the downright fraud that the banks have perpetuated against the American Public, and claiming that the most sensible thing to do from a financial standpoint might be strategic default, depending on your own situation.

The conservative talking point on this, is that you signed a contract and are morally obligated to pay what you owe. The Mortgage Bankers Association takes this as their official position. 

But it isn’t just a matter of the borrower’s personal interest, says John Courson, President and CEO of the Mortgage Bankers Association, a trade group. Defaults hurt neighborhoods by lowering property values, he says, adding: “What about the message they will send to their family and their kids and their friends?”

In 2007, the Association put a $4 million down payment on their $79 million headquarters, and borrowed the other $75 million. When the market tanked and the Mortgage Bankers Association went underwater on its mortgage, they abandoned the property and rented another place 5 blocks away. In other words, they defaulted strategically. See the story from the Today Show by clicking here. The John Stewart show does a follow up, and knocks one out of the park. So much for the morality of bankers.

Strategic default, like any financial decision, should be based on fact, rather than emotion. Claiming that paying on a depreciating asset is the moral thing to do, is the bankers playing on your emotions to squeeze more money out of you.

John Stewart does another piece, and here it is.

By Divemedic, ago

that I will support and defend the Constitution

 I do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to regulations and the Uniform Code of Military Justice. So help me God.

I have taken this oath three times in my life. When I enlisted in the military at age 18, when I reenlisted in the military at age 22, and when I was sworn in at my current employer. (Of course the one from my current employer was a little different.) Each time, I considered the Oath I was taking as not just some words that I repeated. I took this oath as a solemn promise that I swore to uphold, even to the point of giving my life to keep that promise. 

The Oath Keepers is an organization that swears to uphold that promise. They are not a militia. They do not advocate committing crimes. They simply make these ten promises:

  • We will NOT obey orders to disarm the American people.
  • We will NOT obey orders to conduct warrantless searches of the American people
  • We will NOT obey orders to detain American citizens as “unlawful enemy combatants” or to subject them to military tribunal.
  • We will NOT obey orders to impose martial law or a “state of emergency” on a state.
  • We will NOT obey orders to invade and subjugate any state that asserts its sovereignty.
  • We will NOT obey any order to blockade American cities, thus turning them into giant concentration camps.
  • We will NOT obey any order to force American citizens into any form of detention camps under any pretext.
  • We will NOT obey orders to assist or support the use of any foreign troops on U.S. soil against the American people to “keep the peace” or to “maintain control.”
  • We will NOT obey any orders to confiscate the property of the American people, including food and other essential supplies.
  • We will NOT obey any orders which infringe on the right of the people to free speech, to peaceably assemble, and to petition their government for a redress of grievances.

 In other words, they are agreeing to live up to their oath of office. Our elected officials, who take a similar oath, should take this to heart. As unlikely as some of the above items are, how cold anyone be threatened by the statements being made above? The only way they could take these statements as a threat, is if they had some plan in place that would cause oath keepers to refuse their orders.

This is why it surprises me that a young man who calls himself an oath keeper has reportedly had his child taken away by child protective services because of this oath. Apparently, taking the oath of office required. Actually following it is cause for your child to be taken from you.

By Divemedic, ago

Who should Alan pay?

I got the following message today, in reference to my statements and rants against the fraud being committed by our banks:

Look, If someone isn’t paying for something, is it really theirs? I have a real hard time with this whole “free house” shit. I understand there are some complex issues to do with the paperwork, etc. but bottom line, if people aren’t paying for the house, WHY DO THEY HAVE THE RIGHT TO LIVE THERE? And if so, why the hell should anyone else pay their mortgage?

 What I am talking about here is not about giving a person a free house. What I am talking about here is the banks using fraud to take a home that they do not have the legal right to take. Let me break it down:

Alan loans $100 to Bob, who agrees to repay him $150 in 10 payments of $15. He uses his television as collateral and signs an IOU. The thing is, Alan doesn’t have $100 to spare for the next 15 weeks, so he tells Charlie about the deal, and says, if you pay me $110, I will give you all the money that Bob pays me. Charlie agrees, essentially taking Alan’s word that Bob is good for it. Alan pockets $10 just for making the deal. Charlie has assumed all the risk, but makes $40 on the deal.

Things go well, until Alan figures out that he can loan out that same $100 a hundred times, and sells the IOUs to Charlie. Alan’s money making scheme relies on him continuing to make loans to people over and over, and soon he runs out of honest guys to loan money to, so to keep the cash train going, he begins to loan money to everyone, whether they can pay it back or not. Who cares, Alan thinks, getting them to pay is Charlie’s problem. Alan pockets the $1000 in profit.

Charlie is now the holder of $10,000 worth of paper, but has $1500 a week coming to him. The problem is that he doesn’t have the cash to pay Alan, so he gets 10 of HIS friends to loan him $1,000 each using the notes as collateral, and agrees to pay them $1200 a week. Charlie pockets the $300 a week in profit. The investors split up the IOUs, and split the weekly money. They are promised a total profit of $200 each for the loan. In the shuffle, no one really knows who owns which IOU, but this is not a problem.

Until people stop paying. Now, Bob owes money to someone, no one disputes that. Who does he owe the money to? Who has the right to take Bob’s television? What if Charlie comes forward and has a photocopy of the note, and demands the television? Is that good enough proof for Charlie to take the TV?

What happens a week later when David (one of the investors, or so David claims) produces a copy with a signature on it that says, “Pay to the order of _______, signed Charlie”? David states that the original was destroyed when he washed his pants, but he has this copy to prove that he is the rightful holder of the IOU. The problem is that Alan won’t give anyone the television unless they can prove that he is paying the right guy, so now who gets the money or the TV? David decides to solve the problem and sends a friend over to break into Bob’s house to steal the television. After all, SOMEONE owes David money, right?

Then, to complicate things further, Edward comes forward and has the ORIGINAL IOU, and sues Bob. So, how do we untangle this mess? Bob has lost the TV, and now has three different people, each with a legal claim to the $150 he owes someone. Who gets the money, who gets the TV? Who gets the shaft?

That is what we are dealing with, but on a much smaller scale. Imagine that this is not 100 loans of $100 each, but 60 MILLION loans averaging $200,000 each. While my example is hard to follow, the real one is much harder.

Just because a homeowner owes SOMEONE money, it doesn’t mean that he owes that particular bank money, and before a bank can take your home, they should have to prove that they are the one who is entitled to it. The problem is that the banks can’t do it, because through dishonesty and ineptitude, they have created a paperwork mess. There are 600,000 pending foreclosures on backlog right now in Florida, a state of 16 million people. In some counties, one in ten homes is in some stage of the foreclosure process. Some of them are cases where more than one bank is foreclosing on the  same home, using the same mortgage and promissory note as evidence.

By Divemedic, ago