Tuesday, March 31, 2009

Senator Burr: Where IS this man?

OK, another week has gone by. Another week where I've spent endless hours behind computer screens monitoring financial markets. I even got some trading done. And I've been actively watching the various news channels to educate myself as to all the political and business issues that influence the markets and determine the quality of our lives.

And it's also yet another week where I didn't see, or hear anything about, or from, my state's Republican Senator. Where is this man? What does he do? I really don't have a clue. He's AWOL. He's nowhere to be found within or around all the action currently going on within Washington DC. Where in the world is Senator Richard Burr?

I'm one North Carolina Republican who's fed up enough to boot this sorry Republican Senator Richard Burr out of office. The sooner, the better.

Monday, March 30, 2009

Senator Burr: Responsible for $150 oil

Now we know why oil hit $150. If you haven't read it, the reason is here. It's an unbelievable travesty. The American people will never understand this. It's too complicated for them to comprehend. But, if they did, the anger over this issue would dwarf the anger over AIG bonuses.

Put simply, Tom Kivisto and his SemGroup company made a $2.5 Billion bet that oil would fall in price. Traders at Goldman, Citi and Merrill found out about this bet. They teamed up on Tom and drove oil through the roof, in order to send Tom into bankruptcy and realize massive profits for themselves. As a result, oil was priced at egregious levels for far longer than needed. That led to as much as $500 Billion going right out of the world's collective pockets, and right into the pockets of Middle East Sheiks and Russian Oligarchs. Yes, it really is that simple, and true.

The Sheiks bought their personal, tricked out, $300 Million A-380 jumbo jets. And Russian Oligarchs plunked down $100s of Millions for mansions all over the world. The rest of us suffered. And why? Because our Republican President refused to acknowledge that the oil markets were rigged, and he stupidly sat back and allowed us to get screwed. Instead of using our nation's SPR to break the back of speculators, he allowed things to get completely out of control. We paid the price.

Let's be honest about another issue here. Republicans allowed the fox to guard the hen house. You have to understand that there are 3 distinct functions within an investment bank: Trading, Money Raising, and Investment Research. By SEC rules, these functions are required to be separated and aren't allowed to work in concert. Does that happen? Hell no. And if anyone in New York City or Washington DC looks you in the face and tries to convince you otherwise, call them a damn liar, turn your back on them and walk away. You'd be right, they'd be wrong.

Here's what happened. Goldman Sachs and Merrill Lynch investment bankers from their Money Raising arms tried to help Tom Kivisto raise $1.5 Billion in financing. During their due diligence steps in that process, they found out about Tom's $2.5 Billion bet against oil. They passed that information on to their trading desks. Goldman and/or Merrill talked to Citi. All three teamed up to gun against Tom. As they pushed prices higher, that forced Tom to cover at higher and higher levels. It was an artificial move. Even worse, the Goldman Sachs traders convinced their Investment Research arm to enter the fray by issuing extremely bullish opinions on the outlook for even higher oil prices. They worked hard to whip prices into a frenzy to break Tom and make massive profits for themselves.

This stuff happens on Wall Street. All the time. Day in and day out. It happens when we have a laissez-faire political party in power that does nothing to get in the way of capitalism. It happens when we don't have adult oversight and leadership in Washington. We can thank the Republicans for this mess. We can thank them for enriching the Sheiks and Oligarchs so we could pay for their egregious jets and mansions.

Personally, I intend to thank Republicans by working my tail off to punish every single one of them who served in office since 2000. And that includes free market, laissez-faire preaching Republican Senator Richard Burr. That man needs his walking papers as soon as possible. I'm one North Carolina Republican who's had more than my fill of idiot, do nothing Republicans in office. Kick 'em all to the curb.

Sunday, March 29, 2009

Senator Burr: Soft on tax cheats.

Have you been following what the IRS is just now doing to get the names of 52,000 wealthy Americans who have been hiding their assets in offshore accounts? I just read that article today. It made me feel good. Our IRS is finally getting aggressive with these wealthy tax cheats. But you know what? This angers me too. We've known about these offshore accounts for a long, long time. And we've done nothing about it. Why? It's perplexing. In the years that Republicans controlled both the White House and Congress, show me evidence that they got aggressive on this issue. You won't find any.

Why did it take a change from Republican to Democratic leadership to finally step to the plate and say, ENOUGH IS ENOUGH with these tax cheats and their offshore, hidden accounts? I'll tell you why. Very wealthy people are predominately Republican. And just like Republicans didn't want to put regulations on the derivatives markets, provide adult oversight to mortgage lending, do anything about rampant speculation that drove oil to $150, do a darn thing about excessive profit margins in health care, lift a finger to address the egregious profits made off private student lending, well, they also didn't want to aggressively go after tax cheats. They wanted to allow their rich buddies to avoid having to pay their fair share.

Where does Senator Richard Burr stand on this issue? Show me evidence where he's been willing to get tough with the Union Bank of Switzerland (UBS). You won't find any. Why? Oh, I forgot, one of UBS's senior executives was none other than former Republican Senator Phil Gramm. So, of course Senator Richard Burr wouldn't want to rock that boat. He'd rather make average North Carolinians pay more than they should in order to make up for all the wealth being stashed, untaxed, offshore in UBS accounts.

I'm a North Carolina Republican. I'm deeply ashamed that my party didn't step to the plate and drive UBS out of business for allowing 52,000 wealthy Americans to avoid paying income tax. I am deeply ashamed that a former Republican Senator became a senior UBS executive and did nothing to put a stop to this income tax avoidance mess. I am even more deeply ashamed that my state's US Senator has not lifted a finger to send a message that we won't tolerate companies who help tax cheats.

Fellow North Carolina voters, let's send a message to Senator Richard Burr. Kick this sorry, do nothing Senator, head first, out into the street. We've had enough. Vote the man out of office. North Carolina deserves better.

Saturday, March 28, 2009

Senator Burr: All talk, no action on medical costs

Senator Richard Burr is so out of touch with feasible solutions to our high medical costs that it makes me ill. I've been working for 30 years. And for 30 years I've been hearing my Republican party talk about applying free market principles to health care issues. And Senator Burr is no different. That's all the man talks about. Let's allow the free market to do it's work in bringing down health care costs. Yet, we're no closer to applying free market principles than we were 30 years ago. And in most ways, we're further away.

But it's even worse when it comes to Senator Burr. The man talks about applying free market principles, but our party recently voted in one heck of an expensive prescription drug bill for seniors, but refused to give the government the ability to negotiate pricing. Now why in the world does that make an ounce of sense? It doesn't. It goes against free market principles. And how about allowing us to import drugs from countries like Canada? Well, the Republicans put a stop to that too. Free markets? Baloney. Republicans like Senator Burr are only experts at talking out of both sides of their mouths at the same time and getting absolutely nothing done. Nothing.

I'm one North Carolina Republican tired of listening to talk about free markets as a solution, while sitting and watching health care costs rip higher year after year. Let's replace this do nothing, jaw flapping Senator Richard Burr with someone who will get something done.

Vote Senator Richard Burr out of office.

Friday, March 27, 2009

Senator Burr: How Republicans destroyed your savings

There was this really interesting interview on NPR about how derivatives were at the root of this financial crises. If you haven't heard this interview, you should take the time to listen to it. The link above has a stream of the entire interview. This one interview will make it clear how it was that our Republican party went about destroying your 401K, IRA, Roth, 529, Coverdale accounts.

Frank Partnoy, a lawyer and former derivatives salesman at Morgan Stanley was the guest. Frank wrote a book in the late 90s that was a bestseller then and is being updated and re-released now. The title is FIASCO: Blood in the Water on Wall Street. He basically outlines how derivatives came to cause the current crises we're suffering through right now. That book just moved to the top of my reading list.

I don't know why I've never thought this through, but there was a light bulb moment during this interview where Frank explained key problems with derivatives that I simply never got. We have about $12 Trillion in mortgage debt in this country. Only about $2.5 Trillion of it was sub-prime debt. And only about $500 Billion to a $1 Trillion of that was ever problem debt. So, why is it that our world has lost $50 Trillion in wealth as a result of this crises? How do you go from a $500 Billion problem to a $50 Trillion loss? I never understood that, until this interview. I should have gotten it. It was as plain as the nose on my face. But it's an issue that I simply overlooked. You know the answer?

Our problem was the result of companies like AIG underwriting insurance on these mortgages. AIG sold insurance to people who wanted to bet that mortgages would go bad. This insurance was packaged as a security called a CDS. The problem with this type of insurance though was that it was not regulated. Therefore two very bad things happened. First, the people who sold the insurance had no capital requirements to back up the insurance. They didn't have to set up any reserves for future losses. That caused a massive overstatement of profits in the early years of underwriting. And most of the profits leaked out as bonus payments to the hotshots who cooked up this insurance.

Most importantly though, and this is where my light bulb went off, there was no limit as to how much insurance one could sell or buy on each $1 of mortgage outstanding. So even if only $500 Billion turned out bad, there could have been 10x, 20x, 30x more than that in insurance sold. It'd be like owning a $100 K house, going out and buying 15 policies for $100 K each from 15 different insurance companies. Then when your $100 K house burns down, you walk away with $1.5 Million. There are laws that prevent that from happening. You can only insure up to the value of your home, not more. But there were no laws that prevented massively more insurance to be bought and sold on mortgages than there were mortgages outstanding. How ridiculous and reckless was that? Very.

It's even worse. To buy insurance on a house, you have to own it. It wasn't necessary for you to have any financial interest in a mortgage to buy insurance. So anyone with sufficient net worth and an ability to convince a counter party to write the insurance was capable of placing a bet that mortgages would go bad. How ridiculous and reckless was that? Very.

Because it's an unregulated market, no one knows how much insurance was outstanding. We knew there were $12 Trillion in mortgages. There could have been $30, $40, $50 Trillion in insurance written and bought against those mortgages for all we knew. Our Federal Reserve Board, our Treasury, clueless. Our Federal Reserve Board Chairman and Treasury Secretary, clueless. Our President, especially clueless. When this crises started to unfold, there wasn't a person in our government who had a clue as to how significant of an issue we were dealing with. How scary was that? Very.

The amounts sold got to be so massive and interlocking among the various banks, hedge funds and insurance companies, that it was like a domino. I understood the domino issue, I failed to comprehend the multiplier effect of selling multiple dollars of CDS for every $1 dollar of debt being insured. Frank was right. This was a time bomb just waiting to go off. I wish I had understood this earlier. And I would have, had our government regulated it, reported on it, understood it.

Why we allowed this to happen is simply beyond comprehension. But Frank did an excellent job in the interview outlining how this mess unfolded and who should be held accountable. His list of names, primarily Republicans. At the top of the list, Phil and Wendy Gramm. Wendy was instrumental in keeping the derivatives market largely unregulated throughout the 90s, as head of the government commission that oversaw the commodities markets. Phil was instrumental in slipping a last minute, unnoticed provision into a December 2000, 11,000 page budget bill, but laid the groundwork for a $50 Trillion destruction in world wealth. No one reviewed or debated Phil's handiwork. Not a living sole gave a passing glance to this pre-Christmas slight of hand by Phil Gramm. You'll be pleased to know too that Wendy Gramm served on the Enron Board of Directors when that company blew up. And Phil Gramm was to be John McCain's go to man for economic issues. Phil and Wendy Gramm, man and wife, did more damage to our world than any people in our lifetimes.

Also on top of Frank's list of those who we could thank was Alan Greenspan. Yet another Republican. See the pattern here? Republicans. Their laissez-faire, hands off attitude has been an unmitigated disaster. So the next time you hear a Republican, like Senator Richard Burr, spout off at the mouth about government staying out of the way of business, that's the person you can thank for the destruction of your 401 K, IRA, Roth, Coverdale and 529 accounts.

Republicans. They screwed us. They screwed us by allowing a $60 Trillion unregulated market to almost bring down our world's entire financial system. We can thank Republicans for this $50 Trillion world wide wealth destruction mess.

Personally, I intend to thank them by voting them out of office. It's the least I can do for all the damage they've caused in our world. Every Republican who served since 2000 should be on our hit list. They all need to be kicked, head first, out into the street. And that includes Senator Richard Burr of North Carolina. I'm one North Carolina Republican who can't wait to kick this sorry man out of office.

Thursday, March 26, 2009

Senator Burr: Spent us into a crises

Daniel Hannan, MEP, has done the most spectacular job imaginable in summing up not only the crux of the UK problem, but if substituting George Bush for Prime Minister, he provides the most articulate case ever as to why my Republican Party has been an abysmal failure. Take the time, listen to this video. It's a wake up call as to why every Republican who served during the Bush Administration needs to be booted out of office.

We need new blood in the Republican Party, from top to bottom. And anyone who tied their wagon to George W Bush needs to be kicked head first out into the streets. Senator Richard Burr was right there with his good buddy George W Bush. Senator Burr supported massive tax cuts on the wealthiest among us, and spent like a drunken sailor, to the point that we doubled our national debt from $4.5 Trillion to $9 Trillion. This man now lacks the moral authority to be whining about our problems, our deficits, or even making proposals to get us out of this mess.

Senator Burr was instrumental in creating the mess. I've had enough.

I'm one North Carolina Republican who sees a need to punish those who brought this financial mess to our doorsteps. I'll vote for anyone, and I mean anyone, who runs against North Carolina Senator Richard Burr.

Wednesday, March 25, 2009

Senator Burr: Where is your budget proposal?

Don't you just hate hypocrites? The news airwaves are just full of Republicans crying and criticizing the President's budget. Hypocrites. The Republicans are class A hypocrites. They got us into this mess. They cut taxes on the wealthiest among us when we were running a surplus, instead of acting responsibly and tucking that money away for the future. Republicans sent us into this death spiral of a budgetary deficit that we can't get out of easily. They spent like drunken sailors for 8 years. They put in place policies that led us into an 8 year stretch of a false economy. And now, they hand off the massive mess they created and are the first to cry and scream and yell like infants about the effort to get us out of this mess. And while casting stones, do they offer solutions? No. They just sit back and criticize.

Where is your budget proposal Senator Burr? You don't have one. Our party doesn't have one. And the American people have an answer for that. We can't wait to vote you out of office.

This is one North Carolina Republican just chomping at the bit to vote against Senator Richard Burr in the next election. It's time. Let's vote this hypocrite out of office.

Tuesday, March 24, 2009

Senator Burr: Out in left field

Senator Burr serves on the Senate Health, Education, Labor, and Pension Committees. Yet, our state is home to two of the largest banks in the nation. Or was. And while the nation's financial crises was raging, and our home state pride, Wachovia, almost went under and had to be bought out - where was Senator Burr? He was sitting on the Health, Education, Labor and Pension Committees, doing nothing to help North Carolina where it needed the help ... on the economic and banking fronts. Senator Burr - way out there in left field, doing nothing to help North Carolina. Nothing.

I've had enough. I'm one North Carolina Republican who can't wait to vote this sorry man out of office.

Monday, March 23, 2009

Senator Burr: Supports AIG bonuses

News is out that the Senate Republicans want to hold up the bill that proposes to tax the AIG bonuses. Look, the taxpayers got the short end of the stick on AIG. We injected value of $182.5 Billion into that company to keep it alive. And $40 to $50 Billion of that went through AIG and into the hands of many other investment banks to keep them alive too. And those Wall Street fat cats are rolling in bonus money as a result. What does Senator Burr and his Republican buddies in the Senate want to do about this? Nothing. They want to block action. They hope that public attention dies down and goes away. They want their Republican fat cat wall street friends to pockets Billions in taxpayer money.

Well, that's enough to convince me. It's time to send our sorry Senator packing. I'm one North Carolina Republican who just can't wait to vote Senator Richard Burr out of office. And his insistance of sitting around and doing nothing about AIG, and other Wall Street bonuses, is enough to convince me that it's the right move.

Senator Burr: Corporate greed is good

We're stuck in this interesting conundrum. People are mad as a hornet about outrageous compensation in corporate America. But some of these same people quickly jump to the defense of corporate America with a rebuke of government involvement because it's socialism. As an example of the support to keep government out of the salary debate, I just got this email:

"An economics professor at Texas Tech said he had never failed a single student, but had once failed an entire class. The class (students) insisted that socialism worked since no one would be poor and no one would be rich, a great equalizer. The professor then said, OK, we will have an experiment in this class on socialism.

All grades will be averaged and everyone will receive the same grade so if one fails they all fail and if one gets an A, they all get an A. After the first test the grades were averaged and everyone got a B. The students who had studied hard were upset while the students who had studied very little were happy.

But, as the second test rolled around, the students who had studied little studied even less and the ones who had studied hard decided that since they couldn't make an A, they also studied less. The second Test average was a D.

No one was happy. When the 3rd test rolled around the average grade was an F. The scores never increased as bickering, blame, name calling, all resulted in hard feelings and no one would study for anyone else.

To their great surprise all failed. The professor told them that socialism would ultimately fail because the harder people try to succeed the greater their reward (capitalism) but when a government takes all the reward away (socialism) no one will try or succeed. "

OK. I see the point of this example. However, when it comes to determining executive pay, we don't have a capitalist system. It's not socialist either. It's an abortion job chalked full of corruption and thievery.

Let's take an example. I'm not happy about Boeing CEO Jim McNerney being paid $15 M a year, while his shareholders have lost $50 Billion. If I own Boeing stock, can I do anything about it? No. I can't nominate anyone to the Board of Directors. I can't vote on Jim's salary package. Yet, I'm a shareholder. I'm an owner of Boeing if I own that stock. Is that a capitalist system? Far from it. It's not socialist either, but it's definitely not capitalist.

What really happens? Jim has a very heavy hand in determining who is nominated to the company's board. Those are Jim's friends and business associates. They are put on the ballot unopposed. They get elected to the board by default. And they use shareholder wealth to award their good friend Jim with egregious pay, even for piss poor performance. That sounds more like legalized theft than capitalism.

How are we going to get closer to a capitalist system from where we are now? If we were truly a capitalist system, then any shareholder would be permitted to nominate anyone to the board, even themselves. All key executives salary packages would be subject to an up or down shareholder vote. That's capitalism. I don't expect us to get that far. Entrenched corporate executives will keep that from happening. They're too powerful a force in Washington to allow it to happen. But, we could get closer to a capitalist system, but only if government steps in to force change.

My fear is that we won't allow government to make this change. Although we're mad as hell about egregious corporate compensation, some of us are allowing the theories of capitalism vs. socialism to cloud this issue and prevent the necessary changes to take place. If you're one of those people, relax. Examine this issue from a more objective standpoint. Don't allow corporate America to hijack this debate by clouding the issue with a cry of socialism. Otherwise, the corporate thieves will continue to steal our wealth, at will. And our 401Ks will never achieve the ample returns necessary for us to retire. But those corporate executives will sure be living the good life off our backs.

We need to allow government to step into this situation. And the best outcome would be a simple law. Any executive in a public company who makes more than 30x the average employee of that company must have his pay package approved by a majority vote of the company's shareholders. There. Simple. Easy. That's capitalism. And that would tamp down the theft that is rampant in corporate America.

Let's make this happen.

Will Senator Burr help us? Where does Senator Richard Burr stand on this issue? Easy. Senator Burr doesn't want government intervention to stop this theft. He takes the typical Republican line, the government should stay out of business. But what if business has so rigged the game as to steal egregious amounts of wealth from shareholders? Endlessly? That's not going to change Senator Burr's mind. He sides with the thieves and crooks.

There may be nothing we can do to move Senator Burr off his sorry tail on this issue. But, we sure can vote him out of office in the 2010 elections. And I'm one North Carolina Republican who can't wait to make that happen.

Sunday, March 22, 2009

Senator Burr: Where is he?

Senator Richard Burr has been in office for almost 5 years now. Where is this man? I never see him. Ever. Is he doing anything for us up on Capital Hill? I have my doubts.

For 8 to 12 hours a day, I sit behind a computer screen trading our nation's financial markets. I trade my own money, from a home office, in our state's capital, Raleigh. I've been doing this for over a decade now. It's stressful, but I can't imagine doing anything else for the remainder of my life. But as a result of what I do for a living, I watch the news, constantly. Each and every day I'm tuned into the primary investment channels, CNBC and Bloomberg. But in addition, I am often channel surfing to the nation's national news programs: FOX, CNN and MSNBC. In the 5 years that our Senator Richard Burr has been in office, I've rarely seen the man.

What is Richard Burr doing? I have no idea. The man isn't a presence on the national scene. He, his face, and his opinions are absent. How then is it that we derive any benefit from an absent Senator? We don't. He is hurting our state, by doing nothing.

It's past time to send this man packing. We've suffered enough from our do-nothing representation in Washington DC. We effectively sent that message to former Republican Senator Elizabeth Dole. Now it's high time to send the same message to do-nothing Republican Richard Burr.

Vote Senator Richard Burr out of office. It's time. North Carolina deserves better.

Republican arrogance

Yesterday was a day of working around my house. It's spring and spring always brings on chores. I enjoy it because it gets my mind off issues like the economy, the financial markets, and politics. That reduces my stress levels, which is something I need.

But then, a neighbor walked over and we talked. Mistake. He's a die-hard Republican. I am too. But lately, I straddle the fence, generally hating both parties. But he sent my stress levels to the roof with a constant pounding on Barny Frank, Nancy Pelosi, Harry Reid, and John Kerry. It's their fault. Everything's their fault.

A typical Republican.

I have to tell you, I'm just flat tired of hearing Republicans talk about our nation's problems. The Republican Party IS OUR NATION'S PROBLEM. These people were in control of the White House for the last 8 years. They were in control of Congress for 6 of the last 8 years. It was a total break down in government oversight and regulation that brought us to this point. And that was the Republican's fault. They were in control. I have a message for all Republicans out there who want to mouth off about Democratic leaders:

Just shut up.

Republicans did nothing about energy spiraling out of control. They did nothing about education costs that bankrupted families, and piled debt onto the shoulders of our young people. They did nothing about health care costs that were the single biggest factor in personal bankruptcies in our nation. They did nothing about the 45 million Americans without health care coverage. They did nothing about our broken education system. They sat on their asses while wealth concentration hit historical proportions, while the middle class suffered. They doubled our nation's debt by piling another $5 Trillion to the shoulders of our children. They were directly responsible for putting a leash on the SEC to the point it was a broken, toothless, total waste of money.

But Republicans were an accomplished party on some fronts. They made the rich even richer. They prided themselves on increasing home ownership to record levels, and we know how that worked out. They started wars. They spent money like drunken sailors. They allowed our investment banks to leverage up to 40 to 1. They stood in the way of the Federal Reserve providing adult oversight to the mortgage lending industry. And I could go on and on.

I am a Republican. I so deplore how irresponsible my party has been that I don't have a single kind word to say about my party or any of it's leaders. And I'm not a fan either of the Democratic Party. However, I'm smart enough to know who's a fault for this mess. Republicans. And I am smart enough to know that the only answer right now is to give the other guys a chance. And that means we need to push out of office every damn Republican who served during the Bush administration. Every single one. We need to give the other guys a chance to do better. And they need at least 8 years before we start giving them grief.

It was our fault. We screwed America. The Republican Party is to blame for this mess. And Nancy Pelosi, John Kerry, Harry Reid and Barney Frank deserve our silence right now.

So, a message to fellow Republicans:

Just shut up.