Mouth 2 Mouth

Today we witnessed the inauguration of President Obama our nation's 44th president and yesterday we honored someone who helped make that possible.  

Dr. Martin Luther King Jr. against powerful forces to expand liberty, justice and equality.  When my grandfather fought in the second world war, and when this nation's founders fought the British in The American Revolution, it was those same ideals that stood at the forefront of our national consciousness.

We enjoy the hard fought gifts of liberty,and justice, for all as a result of the sacrifices of many.  With that freedom comes our own individual burden of responsibility for the condition of our democracy. 

And while we vote in an exercise of our democratic ideals, that act alone does not satisfy our democratic obligations.

In the aftermath of the September 11th attacks, our nation was asked to open up our wallets and spend for the sake of the economy.  Consumerism became synonymous with patriotism.

It is a popular idea, that the economic decisions we make, can be a force for good in this world.  Undoubtedly the tactic of "voting with your dollar" can effect change, but it still cannot satisfy our obligations as citizens.  

Today this country faces tremendous challenges.  In the face of these challenges we must bring individuals to account for their actions, however we must not be victims.  

Consumerism cannot be allowed to replace citizenship. Our responsibility to does not end once our representatives are in office. And we must not simply surrender our freedom to victimhood. As citizens of this democracy we are responsible for our own fates and the fate of this nation. Our biggest challenges are not terrorism, or economic calamity, rather they are apathy and dogmatism.

Yesterdays celebration of Dr. King and today's presidential inauguration serve as inspiration, as we each take up action defending against the apathetic and dogmatic tendencies within ourselves.

It is on each of us to take up a cause.  It is on each of us to improve our communities. It is on each of us to listen with humility and empathy to those with whom we disagree.  It is on each of us to be critical and to petition our media and our elected representatives on a frequent basis.  It is on each of us to accept the responsibility of our freedom and to take on the task of making this nation better.

'Paulson's new 'Global Banking Corp.'

Federal ethics laws let him sell $484 million in Goldman stock tax-free when he left. Net worth, about $700 million...

First Goldman pays Paulson megabucks, then "lends" him to Bush, a virtual Trojan Horse. Now Paulson's preparing the way for his grand march back into private life by throwing billions of taxpayer dollars to his old buddies. So Goldman gets billions, and taxpayers get a pile of illiquid junk. Scam? Yes, and a classic case of moral hazard: Freed of risky liabilities, Wall Street dances off into the sunset, laughing at the stupidity of the American taxpayer. If Paulson did return to Goldman, his future bonuses would likely more than double his net worth. In short, his 30 months in government will undoubtedly make him a billionaire while costing taxpayers a trillion in new debt as a result of his inaction and incompetence.

Congress,

I'm writing you today on an issue that I feel is a part of a defining moment in this country's history.

There are massive shifts occurring in credit markets right now and those shifts are going to have a significant impact on our ways of life.

The Administration via Secretary Paulson has submitted a ridiculous bailout legislation plan that it appears many in congress are taking seriously. Senator Dodd has even crafted legislation that, while significantly cleaning up Paulson's proposal, still follows in lock step.

I've heard members of congress in hearings talking about how it's up to the administration to explain why this bailout is necessary, as if the throngs of angry constituents don't understand.

I want you to know, that I do understand. I understand and I am angry. I am angry as I was when we were lied to about the Iraq war, when we rushed into the patriot act, and when I saw that FEMA had been stripped of any competence to handle the aftermath of Hurricane Katrina.

I understand that our economy is in deep trouble. That a massive deleveraging event is taking place. I understand that this means we will be facing a lot of hardship in the years to come.

But I also can see that there is nothing that can, or should be done about his deleveraging, other than to take measures to make it orderly and to work to support our fellow citizens when the time comes.

Paulson's plan is flawed in so many despicable and obvious ways. But in one core way it is flawed that should stand out.

The plan is guilty of trying to keep "the debt party" going, when there is no reasonable cause to assume that it should.

The debt bubble has eroded much of our economy. While we enjoyed the temporary benefits of massive leverage much of our industry was displaced through movements to other labor markets. We've been lax in exploring new technologies in energy production, and energy efficiency. But it is that very sort of productivity that we find ourselves desperately in need of now to replace lost industry.

We are in trouble, and there is a way to deal with the trouble that helps us begin growing new and better institutions that can help us rise out of this decline. But the bailout proposal is not only thievery and economic terrorism on the Administration's part, it is also a denial on the part of others who would like to keep us in the dysfunctional state we've been in.

Congress, I don't think I'm the only constituent who understands.

Please filibuster any bailout proposal.

Thank you,

Caleb Mardini

contact your senator now.

contact your representative now.

Thank you Matt for posting this.

There is currently a horrifying proposal being fast tracked through congress by the President and Treasury Secretary Henry Paulson. Many members of congress have openly admitted they don't understand the situation and they aren't sure what to do.

I've called my senators offices and I was asked to organize people in a calling campaign. They want to hear what we have to say.

What's happening right now in our financial markets is a major event, regardless of what the government does, I feel it's going to have a major impact on us all. However I believe the proposal being fast tracked threatens to make things much, much worse.

I ask that you read the proposal yourself. It is very short. You can also read the analysis I've posted here.

The chances of preventing this are very limited . But after reading the proposal, please call and email your senator, NOT JUST ONCE, BUT A COUPLE OF TIMES A DAY, for all of this week.

Ask them to block or filibuster any bailout legislation. Ask them to vote no. Tell them you don't want to pay for a bailout.

Here's a link to the text of the plan. Click here for contact information for the Senate.

• The Foxes are in the henhouse. Prior to becoming the treasury secretary in 2006 Henry Paulson ran Goldman Sacks bringing the company to the position it is in now. Goldman Sacks stands to benefit a great deal from this bailout. Furthermore there is a tremendous conflict of interest as Paulson seeks to hire those who helped create this mess to help decide how to use the public's money.

  (2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts; (3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

• The budget is unlimited.

  Sec. 6. Maximum Amount of Authorized Purchases. The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.

  700 billion is greater than the Pentagon’s budget for 2009 which was record breaking. And that’s just the amount of purchases that can be held on the balance sheet at any moment.
• It doesn’t represent the tax payers. This deal is, in many respects, open ended with no safeguards for taxpayers. While the bill gives lip service to the idea of protecting tax payers it specifically avoids accountability and transparency.

  Sec. 3. Considerations. In exercising the authorities granted in this Act, the Secretary shall take into consideration means for– (1) providing stability or preventing disruption to the financial markets or banking system; and (2) protecting the taxpayer.

• Completely dubious. While it grants extreme powers, there is no review. (this one is really incredible)

  Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

• There are no stipulations for punitive actions. Instead for institutions able to move their bad debt to taxpayers, or able to buy debt at discounted rates this will be quite rewarding.
• The arbitrary nature of the bailout creates greater uncertainty in the markets. Furthermore some market watchers speculate that this could result in a greater devaluation of U.S. credit as there is fear we’ll nearly bankrupt ourselves trying to take on the debts of these failed institutions. The measure calls for raising the national debt for example.

  Sec. 10. Increase in Statutory Limit on the Public Debt. Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

• We already have an excellent solution in place Chapter 11 Bankruptcy.

  In Chapter 11, companies with a solid underlying business generally swap debt for equity: the old equity holders are wiped out and the old debt claims are transformed into equity claims in the new entity which continues operating with a new capital structure. Alternatively, the debt holders can agree to cut down the face value of debt, in exchange for some warrants.

  Luigi Zingales and Robert C. Mc Cormack the authors of the above quote maintain the process would have to be faster than chapter 11 normally takes. But passing a law, especially one of the magnitude normally requires much more investigation and vetting. If we can entertain passing a law of this magnitude this quickly, isn’t there a possibility that an expedited Chapter 11 program could be created.
• The Mother of All Bailouts. A measure of this level is unprecedented. You may have heard that this isn’t dissimilar to the Resolution Trust Corporation founded in 1989 to help us out of the S&L Crisis. But

  In 1989, there was no choice. The federal government insured the thrifts, so when they failed, the feds were left holding their loans; the RTC's job was simply to get rid of them. But in buying bad loans before banks fail, the Bush administration would be signing up for a financial war of choice. It would spend billions of dollars on the theory that preemption will avert the mass destruction of banks. There are cheaper ways to stabilize the system. (Sebastion Mallaby of the Washington Post)

  And they want to bailout whatever they decide. This will likely include bailouts for foreign businesses as well.

  The U.S. Treasury submitted revised guidance to Congress on its plan a ... Officials now propose buying what they term troubled assets, without specifying the type. (Bloomberg)

• It goes counter to the spirit of the American free system that maintains those that reap the rewards should bear the losses.

  The basic premise of a free economy is one governed by laws and not men, where property rights are respected, where individuals are free to make contracts with each other, and where honesty and transparency exist in the marketplace.(Mish)

Please contact your senator now and ask them to prevent, block, filibuster, and vote no for any bailout.

I’d also encourage you to drop me an email or a comment if you make the call.

Thank you.

This is a repost of something I wrote in another blog, but I thought it apt to share here in that it involves one of the investment banks involved very heavily in sub-prime lending and selling mortgage backed securities.  How does this affect you?  Credit (read: mortgage) markets are tight, there are many factors contributing to credit contraction, but one big one is lack of confidence in mortgage backed investment vehicles.  Actions like these taken by Lehman Brothers further erode market confidence, prolonging a downturn.

Lehman Brothers, a sort of Wall Street cousin to Bear Stearns (read: should have collapsed a long time ago), is showing that it finds Enron style solutions to financial inconveniences a usefull way to stave off pending disaster. The company spun off a hedge fund staffed by "former" Lehman executives.

R3 Capital Partners is a group that was essentially established to "buy" Lehman's risky investments, taking them off of Lehman's balance sheets.  Lehman is going out of its way to say that R3 is not a related company and deny that it has any "ability to exercise significant influence'' (Lehman Spokewoman Keri Cohen) over R3. But the evdidence shows otherwise:

1. R3's employees maintain their restriced Lehman stock as if they were still Lehman employees.

From Naked Capitalism
"the former employee charged, based on information provided by several people at Lehman, that the R3 employees' restricted stock was still vesting on its original schedule, as if they were still on the firms' payroll. If true, this is both highly unusual and costly."

2. Lehman assets could account for nearly half of the fund's investment base. According to Lehman's own advisor Felix G Rohatyn in an interview with Andrew Sorkin of The New York Times, money like that does buy influence:

“The big difference is the political element,” he said. Mr. Buffett is seeking the best return when he invests; that’s his only goal, Mr. Rohatyn said. For Dubai and China, whether the investment returns 10 percent or 20 percent — or perhaps much less — is almost beside the point, he suggests. What they really want is influence on the world stage, despite their insistence otherwise."

Yes the article and the quote are discussing a different idea, but Rohatyn's point is that money buys influence.  With a 48% holding in R3 could Rohatyn deny that Lehman has influence in R3?

3. Lehman is R3's Landlord.

The Empire Strikes Again

R3 allows Lehman to hide the truth from investors, creating and funding it's own buyer for potentially failing assets. This is very much like Enron's Chewco, created to hide debt off balance sheet and inflate profits. Chewco was named after Chewbacca, a Star Wars character, I have to say "R3" sounds similarly named considering the star droids R2D2 and C3PO.

[Naked Capitalism and Bloomberg News] 

Virtual real estate gets bigger and better?

As probably one of the biggest changes to come to the the Internet in a long time, ICANN, the body that that gives us .org, .edu, etc., is opening things up to a whole new range of names.

Looking toward 2009 ICANN plans to make it possible for the characters after the "."  like the com in ActiveRain.com to become any number of other names (.caleb .rainmaker etc.).

"Presently, users have a limited range of 21 top level domains to choose from — names that we are all familiar with like .com, .org, .info." ICANN Chariman,  Peter Dengate Thrush

It's a big change from 21 to ???, that's a lot of real estate opening up folks, I'm not sure if it's better, but it'll be interesting.

Donate to the Charles Richey Fund

Friend, husband and fellow REALTOR® was unexpectedly hospitalized read more

Please help Charles and Jacqulyn Richey.

I received an email today from Max Chirkov over at IBSTeam.net (you've seen his links at the bottom of AR's Directory pages) asking for help on behalf of Charles and Jacqulyn.  Charles has been diagnosed with Guillain-Barre Syndrome, a rare disorder that attacks part of the peripheral nervous system.  Over a period of days or sometimes weeks GBS causes muscle weakness and eventually complete paralysis.

The good news is Charles is currently in the ICU undergoing treatment, and while "GBS" can be life threatening, Charles was diagnosed early and patients most of the time recover with few ongoing issues.  While his recovery might take a while, it's my impression that he's going to be OK.

Now an ICU is an extremely expensive place to undergo treatment.  He's also going to need ongoing physical therapy.  Without medical insurance the need for support is going to be high.   Max over at IBSTeam.net  is taking up a Paypal collection, to help Charles and his wife Jacqulyn cover some of the costs of treatment.

I've known Charles for some time, he's a major impact on this community.  He went out of his way to help me work through things when ActiveRain was growing.  I know I'm not the only one he's helped directly or indirectly.  Given that he has touched so many of us, even a small contribution from the many people that know him will add up to a lot, and go a long way toward helping.  So if you can make a contribution even a small one please visit Max's page to do so. Max also has more information about what's going on if you'd like more information.

___

And please help yourself too.

For many of us that are self employed, I realize medical insurance is most often a low priority concern.  It seems if we're healthy now, there's no need for it.  In my own case, I grew up with entrepreneurial parents, and went into entrepreneurial work myself, medical insurance was never a priority. I've spent most of my life without insurance.

Through many medical incidents involving people I know, I've come to see that medical issues can suddenly hit any of us.  I now have my own "catostrophic" insurance plan.   I'm in good health and rarely need to see a doctor,  when I do I can pay out of pocket.  I have this plan for the unanticipated concerns.

I would encourage each of you without coverage, to take a look at what options might be available to you.  Even if you don't expect to need medical attention having a coverage plan in place is in my opinion a good idea.

Donate to the Charles Richey Fund

Friend, husband and fellow REALTOR® was unexpectedly hospitalized read more

Have you ever fumed, wondering why the replacement cartridges cost more than the printer itself?  If you have then this video might be satisfying.

Via Gizmodo