Category: Money

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Is the US economy still stable?

Presidential Press Secretary Dana Parino would not commit to that statement today.

Since my last entry, just over 72 hours ago, my Grandchildren bought AIG, Bank of America swallowed Merrill Lynch (absent First Franklin which Merrill got rid of a long time ago) and Lehman Brothers is gone.  Barclay’s will be occupying Lehman’s building in N.Y.  What a week.

Now we get to listen to all of the analysts tell us what went wrong.  It’s not that complicated when you break it down to greed.  Corporate financial execs were forced to show an increase in revenues or lower than anticipated losses to maintain market share values.  To achieve this analysts and lawyers found or created loopholes providing short term gains while the bottom fell out because of bad lending practices.  The short term returns ran out and the reality of a pure debt economy caught up.  And we’re not done yet.  By the end of next week WaMu should be owned by another institution, possibly JP Morgan.

But let’s not regulate, oh no.  That’s “socialism”and infringes on the free market economy.  It’s still “buyer beware” as others gamble with your investments.  So the way to revive our economy, according to the GOP, is to increase tax breaks to the institutions responsible for this mess in the first place.  “It will create jobs”, they say.  Bullshit, I say.  I call for industry regulation with the same tenacity McCain used to call for domestic drilling.  Regulate here, regulate now!  Self-regulation is an oxy-moron in finance and industry.

Regulation does not interfere with, but serves to compliment and protect the free market.  Removing the intentional corruption, gouging, legal loopholes and fine print used by corporate think tanks to generate revenue at any cost to the consumer will reinstate the consumer confidence necessary to get the US economy moving again.  Any less than a complete resurgence of American consumer confidence will be detrimental to all global markets.

So the resounding and obvious answer is: NO Dana the US economy is not stable even though you did a good job avoiding the question.  Good little Press Secretary.  Your input and statements were as valuable as those from my desk lamp.

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You think things are bad now?

We could have a bigger storm heading towards the US than Hanna and Ike combined. We’re heading towards Hyperinflation. Know what that is? Most people don’t.

Well you’ve got your typical recession, that’s a mess. They you’ve got Stagflation: That’s where prices and interest rates rise faster than the average wages. Then you have Hyperinflation: This is when prices quickly rise beyond our ability to afford common goods based upon real wages.

It’s argumentative what can be done to stop the looming problem. But I assure, without question that once the Necon economic policies are continued we are in big trouble. What’s McCain’s plan for creating jobs? More tax breaks for corporations. Yes, his concept is the same as the Bush economic policies: give them tax breaks it will create jobs. Bullshit. Trickle down economics failed the mighty Reagan, it failed Bush and now it will fail McCain.

These tax breaks will be recorded as additional revenues for the corporations and the richest 10% of investors (many of which are overseas) will continue to profit. Almost none, zero, no jobs will be created under this strategy. The “bailouts” will continue, the banks will face no scrutiny and they will survive on the good intentions of an increasing federal deficit.

Who suffers? The middle class. Now I’m not saying that the Obama plan is much better. I’m not certain there is a government plan that could help short of repealing NAFTA, which would only be a start. To overcome this crisis we need a completely new perspective in socio-economics in America. And if there’s anything Americans hate, it’s change.

Americans need to understand that the unregulated Capitalist economy so many strongly endorse is in fact their demise. Now quick, someone point at me and yell SOCIALIST PIG! I don’t care if you do because I firmly believe that any company left to police itself will only have one interest in mind that being revenue. Companies do not have the best interest of children, the elderly or any of the rest of us at heart.  It’s the governments job to protect us from the ravages of profiteering when harm is being done to American families.  “Buyer Beware” is an outdated, 19th century, snake-oil philosophy that is useless in our modern, purposely deceptive economic environment.

For so many the idea of capitalism vs. socialism is black vs. white. Most true Neocon’s would love nothing more than to see all social services and social safety nets disappear. Who cares about homeless and the crime rate? Those who can’t find a job didn’t go to college for an advanced financial or technical degree so they don’t deserve a job. But when you’re homeless don’t loiter on our beautiful streets – go to jail. That’s more or less the Aristocratic perspective of most hyper-religious social conservatives who’ve never in their lives faced a true financial challenge. Those who can’t compete take their place on the food chain in the system of incarceration. God forbid capitalism actually needs a middle class. But not a “middle class” measured at income levels above $150K a year in 2009.

Instead of seeing any shades of gray or middle ground Liberals and Conservatives will battle on issues where there is no compromise. And it doesn’t matter if more jobs are lost, gas and food become unattainable, foreclosures continue and banks get bailed out more and more often (or fail) while the majority of people can’t eat. As long as people are going to church three times a week and gays can’t get married then the “good people” of America will continue to vote for Sarah Palin and crew. And face it Neocons, you’re not voting for McCain, you’re voting for the ideals of his running mate Rev. Caribou Barbie.  You were never decided on McCain.

Unfortunately the Democrats don’t have much of an economic recovery plan either. But it’s better than the “give to the rich” theme that is openly promoted by McCain and company. And Obama cannot and will not overcome this. The voting population of rednecks have their glory girl and regardless of how ridiculous she is they will vote for her.

I realize not many are going to read this, or care. I just wanted it on the record so that when all the self-proclaimed “intellectuals” out there ponder how in the world the Democrats lost to yet another round to the Aristocracy and corporate kickbacks I can say I told you so.   Obama can’t win.  Rednecks decide elections in America and they care little about foreign affairs or economics.  They only know “God and Country”.  Whatever that means to them at the time.  Usually a bona-fide redneck, Neocon in a cowboy hat can’t even tell you in specific terms.

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Putting bank fees in perspective.

A July report by the Federal Deposit Insurance Corporation showed that banks took in $38.6 billion in fees and service charges last year. This may not sound like much when some of the richest individuals in the world have that much under their control. But let’s put this number in perspective by comparison.

  1. The federal budget deficit is currently $168 billion. This deficit was created over the past eight years and is projected to be about $407 billion by the end of 2008. That’s an average accrual of $50.87 billion per year. So banks collect consumer service fees almost as fast as the government created the current federal deficit.
  2. Microsoft projects to earn about $40 billion in profit after operating expenses from June 2008 to July 2009. So the banks could collectively purchase almost all of the products to be sold by Microsoft next year using the amount they collect in customer fees in 2007.
  3. Banks will collect more in consumer fees from their American customers than the average annual Gross Domestic Product (GDP) of many countries including Syria, Kenya, Sri-Lanka, Tunisia, Panama, Jordan and even oil rich Qatar.

I could go on but I’m not. If anyone still thinks that consumer bank fees are not hurting this economy as a whole they’re living in denial. The big question is: What, if anything are banking consumers getting for this money? You’re providing the banks a reason to exist so they can continue to do what? Protect the money? The money that only exists in a virtual world of electronic transaction systems? I really hope China doesn’t ever follow the lead of the US and give up their cash and carry culture in exchange for a nation of consumer debt and fees for the banks. No, I won’t even wish that on our biggest economic threat.

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McCain is ahead.

The conservatives have found their girl in Caribou Barbie. Obama may have lost the south and could ultimately lose the election as a result. Sorry Dems, you haven’t learned: GOP spells GOD and unless you can win the south you cannot win an election. Very sorry to see all the support for Obama amount to nothing. The country will remain divided. But like I’ve said before, the idea of unification in America is a pipe dream. We are divided on the issues and as long as people vote based upon single minded agendas like abortion views, the plight of the Alaskan salmon, or the rights of homosexuals their will never be common ground.

There is and always will be two Americas and it’s not rich and poor. It’s conservative and liberal. Obama could win the popular vote and will still lose the election. The conservative states carry too many electoral college votes for the Democratic mindset to prevail. As for myself I think both parties suck and neither truly represent the issues most important to the majority Americans which do not include abortion and gay rights.

Neither party wants to enforce the laws on the books and handle illegal immigration, or change them. Neither wants to attack the source of health care problems, the cost. And neither wants to be responsible for imposing government oversight on out of control corporations and the financial sector, an issue that many Americans feel is a key factor in our current social and economic status.

I will tell you this: Republican’s are way out of touch with what needs to be done to fix America’s economy. The continued idea that if you cut corporate taxes it will result in job creation is way off track. We’ve tried this for eight years. McCain says we’ve got the second highest corporate tax rate in the world. I say why shouldn’t we? We have the largest number of corporations in the world. Any further tax breaks will only result in more profits for these companies, not jobs. Automation and technology will replace the manual workforce. We don’t need to give additional breaks to already established, highly profitable corporations. We need to give tax incentives for corporate innovation and increase the wages in the service and labor sector for LEGAL workers in the US. This may increase the cost of domestically produced goods but it should be balanced out by an across the board wage increase.

We are living in an era when 1950’s Capitalism has come to collect on the note and the debt is enormous. The model of Capitalism as we know it today needs to be changed, not to socialism, but to whatever form necessary to level the playing field. No longer is a college education and a positive attitude enough to compete when the rules are regularly manipulated by corporate, legal think-tanks so those with money can continue to take more and more from those without such resources to defend themselves. Case in point: Bank Fees, consumer enemy #1.

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I’m done with ebay.

I sold a product on ebay today.  They held all the funds for 21 days or “until the buyer leaves positive feedback” knowing very well a lot of buyers don’t leave feedback.  They consider this buyer protection.  I consider it misuse of my money as they are doing this under the guise of buyer protection in order to hold other peoples money to generate interest.  So I refunded the money to the buyer immediately and told him the product would not be shipped – it will be on Craigslist.

Through these actions against small, private sellers ebay has become nothing but a storefront for high volume resellers which comprise over 60% of their listing fees.  They require private sellers to use Paypal, again under the false pretense of “buyer protection”.  The reality is they don’t make any money through Paypal when a buyer sends a certified check or money order so they force sellers to use their revenue generating engine.

This is just like the banks telling their service reps to inform customers they process debit and check transactions largest to smallest for their own good. “So your car payment won’t bounce” they say.  Bullshit, pure and simple.  So it has nothing to do with the fact that this model generated an additional 17 billion in fees for the industry when adopted in 2006?  Right.

Until government starts acting to fight financial industry manipulation of consumer funds for their own benefit more and more consumers will suffer and languish while they wait for access to their own money.  No financial institution should be able to “hold” cash funds (note I did not say pending check deposits) or decide how and when to process payments and transactions when these actions result in a revenue stream or profit for the institution.  That’s using my money for your net gain and I resent it and will not allow it.  So, I’m done with ebay.

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Bank Fees: Another Fee Tactic

I’ve just been made aware of a new tactic being used by banks to generate fees.  I thought Bank of America was the absolute worst for engineering mechanisms to maximize overdraft fees.  It seems that WaMu (Washington Mutual) now holds this honor above BOA with a process that is simply evil at it’s core.  They will display a deposit in the accounts “Available Balance” but will then charge overdraft fees on any transactions that occur before the deposit actually moves to a posted status.  They have set this period between “pending” and “posted” at 24 hours.

So here’s how it works: You get a direct payroll deposit at midnight.  WaMu will show this deposit in your “Available Balance” on-line and through any other available inquiry method.  So you have the money to spend correct?  Wrong.  If you spend any money that exceeds the funds available prior to this deposit you will be charged an overdraft fee for each negative transaction.  WaMu explains this through their process of posting all debits before deposits.  But wait.  WaMu displayed the funds as available?  Doesn’t matter.  The funds aren’t actually available to be used until the deposit moves into “posted” status 24 hours after they’ve displayed the funds as available.

Let’s face it.   We’re getting way past the point where the bank is mostly a liability for consumers in todays economy.  These fee tactics and irresponsible lending practices have undermined faith in the banking system for a large segment of Americans.  In fact the number stands at about 36% according to the banking industry itself so we can consider that the most conservative estimate.  It’s actually probably more like 50% and growing.  The banks explain all of this through the repeated proclamation that they are a business intending to make money like any other.  So run, don’t walk to your local credit union and make it known to the banks that if their business is taking our money for nothing then we don’t want their product.

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Undecided…

I am personally undecided who I will vote for now. My personal opinion is irrelevant in my prediction. It should be John McCain who wins this election (provided that he lives that long). Why?

The American public could gradually lose it’s fascination with Obama. His “rock star” persona can fade. Not that it matters. What may ultimately lead Obama down the path to defeat is his position on oil. I’m a registered Democrat (in case you haven’t guessed) and I do believe big business and the banks are out of control and unchecked so I feel there needs to be more government oversight, I despise the situation in Iraq, and I don’t think the Republicans have a plan for a health care system that’s going to do anything but make the rich even richer. So why am I considering a vote for McCain?

Because he supports drilling in the US for oil. While I care about the environment I really despise hyper-tree-huggers. These are the environmentalists who will sacrifice our nations welfare and economy to save another damn species of snail. I know a lot of other Democrats who fall into the category of Independent by default in this election. Hell, let’s face it I might as well change my registration to Independent because I don’t fully support either party’s position on a number of issues.

  1. I want immigration laws enforced – not reformed. Neither candidate is supporting this position to the upset of the Republican party because I’m certain most conservatives want a candidate with a stronger stance on this issue.
  2. I want to drill for oil in America. Obama and the Democrats have made it clear they care nothing about saving our future by attacking the energy problems on all fronts including drilling at home.
  3. I want NAFTA repealed. Again, nothing either party has proclaimed interest in.
  4. I support the withdraw of troops in Iraq using a responsible time table. More Dems support this than Republicans.
  5. I believe we need comprehensive health care reform. From the top down including an attack on the rising cost of health care services. John McCain wants to put the hospital corporations in check but he’s also running the risk of angering big business supporters who believe hospitals and drug manufacturers, as corporations, should be free to profit as much as they like even if the cost is the lives of patients. This is actually an easy fix: price caps. Universal insurance coverage, a Democratic idea, is nothing but a windfall for health insurance companies. Neither side has even mentioned government price caps which would limit hospital corporation profitability but naturally drive down the price of insurance.
  6. I want to pay fair taxes. This is more of a Republican idea but only really benefits the rich and corporations under their model of tax breaks. Democrats will give no one a break here.

Basically I don’t fully support either party and choosing one side or the other is like choosing which foot to be shot in. I don’t want to be shot in either foot.

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Brightstar Communications in Raleigh, NC

Here’s a customer service story for you.  I just had to send this email to the CFO of Trimaco regarding an emergency service call I had to place with Brightstar Communications yesterday regarding a down fax line:

Drew,

Yesterday I contacted Brightstar Communications regarding our down fax line.  I was told to open a ticket through their on-line form which I did.  I was informed a tech would call me shortly to schedule a time for the repair.  I never received a call.  My follow up with Brightstar revealed that the ticket had been assigned to Tim Beach (Beech?).  I never received any communication from Tim Beech.  This morning I had to call and had to insist to speak with him.  It was apparently a big problem that I actually speak to the guy assigned to the call.

When I asked Tim why no contacted us to schedule a service time he went off explaining some big job they were all on at a hotel or something.  In a somewhat irritated tone, I admit, asked why someone didn’t communicate this to us because the service call was entered as an emergency.  He got irritated and hung up the phone.

I will be finding another vendor to handle this and any future problems with the phone system.  I know several with very good service records including Network South and Atcom.  I will not be conducting business with Brightstar Communications unless specifically directed to do so.  In over 13 years of phone system management and administration I have never seen such poor service or communication from a vendor and will quickly communicate this experience with everyone I know in the industry.

And I didn’t even get to wish him a happy 4th of July.  Mike Seibert, the owner of Brightstar, is listed as the Communications vendor and consultant for “The Business Clinic” in Raleigh which consists of “groups of local professional service firms experienced in offering and implementing fundamental business solutions for small and mid-size businesses.”  This is important because during the coarse of this saga Mike and his staff repeatedly implied the Trimaco was not big enough to warrent emergency service from Brightstar.  Never mind that Trimaco is several times the size of Brightstar with an annual revenue that dwarfs Mike’s.

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Back with a new look .

The conversion from Time Warner to AT&T DSL is complete.  It took a little more time than I anticipated because I didn’t realize their are no phone lines in my office where this server sits.  So the server’s on a wireless network adapter now and seems to be going strong – static IP and all.  I’m still hosting the DNS with No-IP.com because they’re paid for the remainder of the year.

The world’s focus is on the US economy now and so is mine. My rants in the coming months will focus primarily on this topic.  I won’t be watching my language because let’s face it, we’re screwed.  We’ve got job losses, banks are struggling because of loans that can’t be paid back, house values plummetting almost everywhere and gas prices that are through the roof.  Put $1000 under the mattress and get ready to ride out a depression that makes Grandpa’s look like fun.

The talk show pundits make it sound like it’s going to be alright.  The market is “correcting itself” they say.  I laugh at you sirs.  Please do your part to keep hope alive.  As soon as gas hits between $5 and $6 a gallon and the trucking strikes begin you better have food in the house because I hear there’s only 3 days worth on any grocery stores shelves at any time.  Gentelmen, start your gardens.

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Jad Mouawad and Mireya Navarro -or- 2 innacurate writers for the NY Times

These were the creators of an article that ran this morning titled: Teeth Gritted, Drivers adjust to $4 Gasoline.

Among a couple of inaccurate, opinionated comments one blatant distortion they provided was

“All this has led to a vast transfer of wealth from American drivers to domestic and foreign oil producers.”

Wrong. Or Epic Fail as it would be put on Digg. The transfer of currency to wealthy oil producers is occurring from Oil product companies world wide, not drivers in America. Specifically, Americans are paying current high prices to insure that the refineries (i.e. Exxon, BP, etc.) are going to be able to maintain their current profit levels 13 years from now. That’s right, the price of a gallon of gas today is set based upon the speculation of Energy Traders on 13 year futures. See my article a couple of days ago to learn what futures trading is.

With the media sworn to their own misleading, blanket statements it’s no wonder the population at large has no idea, zero, what makes the current price of gas so high. As long as our current prices at the pump are directly correlated to the current price of oil by these irresponsible writers people will still continue to think this is an issue of supply and demand. We are not in a situation where we need to pay this much at the pump or China’s going to take our gas to get to work.

We pay these prices so that the major oil product producers can continue to guarantee annual record profits to their investors many, many years from now. Should the international price for a barrel of oil come off it’s current record highs the excess in the price you’re paying at the pump today will be recorded as pure profit for the oil product producers, not the oil producers, years from now.

I said it in the previous post and I’ll say it again. Know this: Oil product producers (not oil producers) are going to make money or they are going to make more money. Under their formula there is no risk of loss.