Ed's Blog

Wrong, It Is NOT the Most Important for Obama!

Ed Tse (richvalley) — Thu, 20 Nov 2008 15:30:58 -0600

Financials: Survival first
Barack Obama's most important task will be to save the financial-services industry. After that: More regulation and lower profits.

Wrong! Obama's most important job is to restore the "trust" and "confidence" of consumers. It is not a right approach to cure or solve the recent "recession" to bail out the big guys.

Looking at the bottom, those middle or working classes is trying so hard to make a living. Literally they are dying as a rotten wood. How can the branches survive with a sick and dying root? You guys in DC just concern about those big fats; and allow those automakers brag about themselves to claim they are the "Main Street". I agree that there would be a job loss disaster if we let them down. But it is very clear that it is not the way to make things right.

When I listened to the news that there is a huge inventory in Long Beach Port of California, about 5 miles long cars of Toyota and Mercedes, I believe, the most important is to move their 2009 models into their dealer's lot for a good sale. But How can we do that? Good question, an idiot knows the answer.

We can give fish to anybody, including automakers. But the better way is to teach them how to fishing, to give them a decent living and business. Is it the purpose for the existence of a government? Isn't it all the government about: to provide a healthy environment for people and business?

Yesterday, even I said I am sorry to see the stock plunge below 8,000. Since we overlook the right approach to cure the root, but keep ourselves busy in small perspective to give those branches a treat, I do expect its further falling. Now Dow went down for another 440 point to 7,552 today.

I have no further to say, but to have my mercy toward those futrure victims of our politicians if they are busy in the credit "supply" side, and don't realize what they are ignoring the "demand" side of the coin.

Who Says We Have Credit Funding Problem?

Ed Tse (richvalley) — Fri, 14 Nov 2008 16:46:37 -0600

Looking at those GWB boys crying to bankers begging for a loose-up lending, it reminds me of some strange things happen recently at my Yahoo or Google (I am not sure it happen to you).

As Paulson said, credit was supposed to have been very tight to a breakdown. That's why we American taxpayer have to accept the blackmail of his "$700bn" urgent plan. I don't know how urgent the situation is. But, I do know people outside the financial sector are suffering too much. Credit crunch is here or everywhere, isn't it?

In the past week, Google and Yahoo are losing its "search" function. I can't easily use it as I used to find my valuables information. In some cases, it seems to me they come up with all irrelevant useless results to a point that I gave up since nothing I can do with my terms. I don't know if their most recent job cuts have something to do with this.

Besides, even I set "block" filter on, there are recently a lot of junk mails get through to my attention. Much more than I used to get. I have no idea if that is incurred by a mill firm sold my email to some more "aggressive marketers."

Well, take it as a good chance to see what the fancy products are offered. Gee! dame it, at where the credit channels are clogged as Paulson said? All the NINJA (no job, no income application) loan are still alive out there, credit is so easy to get as the old days so long as you can breathe. Are those politicians lying?

Don't believe me? Take a good look at the emails I got in 2 days and enclosed here below. Did they tell you they would give you Tens of Thousands dollars loan with no question asked?

NO income check or NO credit score needed for you to get the money as they claimed: "All income and asset information is disclosed by the borrower on the application, however, there is no "verification" performed or required by the lending institutions." It seems like a liar loan promotion since everything is as you "stated."

Some programs even give you a "corporate loan" of half million dollars without PG (personal guarantee)? They claimed, "As with most of our programs this is an unsecured business line of credit, in which no proof of income or personal assets is required to be disclosed for loan approval and funding."

Well, you will say to them you don't own a corporation. Not qualified, period. Don't jump into the conclusion so fast. They are so eager in begging (scamming?) you to write a loan applications so that they don't take a "no" as an answer. They will do anything for you to say: "No problem" at all. They can sell you a well long-established corporation at a price, just adds a fraction to your loan amount.

How can they do that to make you the owner of a long existing company to put money in your pocket? Sounds too good to be true for your success, right? Seems there is nothing impossible by our imagination and the sky is the limit. Great, you are going to be the boss of a company, your America dream comes true. But what kind of corporation you can buy and all the money you can borrow without personal liability? Literally, it is like a no-risk grant from Santa!

As they said: "A seasoned corporation, also called an aged or shelf corporation, is a corporation that has had no activity. It was created and put on the "shelf" to age. This corporation is then later sold to someone who would prefer to have an aged corporation rather than a new one. A business entity that is created through a process other than incorporation (such as a limited liability company) is simply called a seasoned company or corporation." Get the idea? That's an expertise area of today's MBA graduates: everything in PAPER, like home equity.

Creativity is the most important ingredient to a capitalist market system. Can these loans really be done? I have no clue for their claims (for them to say no need for a FICO), Even I did personally see these stuffs really worked; and processed with a top 10 big bank 15 years ago. (NOTE: When I did this operation, I was working for a law office to know banking products and indeed do have a very good connection to a banker. At the time fund is approved, I had no problem to collect additional 10% fee with my banker's help, in addition to my advanced application fee. But I am not smart as they are, since I still need from my client his good FICO score to meet or get around the audit system or underwriting procedures.) However, with all these kinds of MBA new toy invention or bullshit scams, the financial world was moving smoothly in the past until the recent bubble came up.

Is it really a jungle out there in getting credit? There is no transparency in FED bailout at this moment. Is it easy for a bank to get billions of digital money (NOTE: it is no longer in "green paper", it is in "black and white" numbers in the electronic cyberspace) ? I have no idea. All I can say is "a mess create a fantasy that is either a risk or opportunity." But keep in mind: "be careful when you are dreaming."

*** Enclosure ***

	Underground Cash Invitation	10:33 PM	4KB
			grout	Say goodbuy to bad conditions	1:12 PM	3KB
Unread					1:12 PM	4KB
			Inman News Headlines		1:11 PM	32KB
Unread			YouCanBeDebtFree	No cost debt consultation

	Financial Services		Contact Me Please

Financial Services

Contact Me Please

No Personal Guarantee Seasoned Corp Program

$150,000.00 in Funding

No Credit Score Requirement

Contact Me Please  Tuesday, November 11, 2008 1:10 PM From: "Financial Services" a*** To: @yahoo.com
IMMEDIATE NOTICE

DOES YOUR COMPANY NEED CA$H TO OPERATE OR GROW?*

·       $200K within 45 days!

·       No Credit Requirements

·       No Income Verification

·       No Personal Guarantee Required

CONTACT INFORMATION

1-800-*-**

Dealing With a Shark, You Are Out of Luck!

Ed Tse (richvalley) — Fri, 14 Nov 2008 13:47:26 -0600

Who says no buyer and no sales recently?

Look at this in MOVOTO: "This home is no longer active on the Multiple Listing Service."

How many days it took for the listing off "active"? Less than ONE day in theory!

I have been providing my friends or clients info to find a good buy. I found out this property shall be very interesting to one of them. Immediately after a new listing notice of a website (NOTE: it is my outsourcing and they are free), I provided my study or consulting opinion. I asked my client go to take a look ASAP. My client went there the very morning (11/13) to find a Mexican American agent at the site (not the listing lady agent Marie who is supposed an Asian American) and was told that it was pending "Yesterday." The agent refused to accept his all cash over-priced $290K "back-up" offer (sounds to me like no matter whatever price he might offer).

My client complained that he wouldn't lose his dream home if I could act fast enough. Gee! he doesn't know what a "pocket listing" means in our profession. In the above statement, I said "less than ONE day," did I put one modification "in theory"? If you are a seasoned agent, you know my saying is literally equal to "no listing at all in PRACTICE."

In the past few days, I am too much into Macro-Economic or political observation on the current events. With more than 700 clicks, there is still nobody in AR want to make a comment on my topic. So, I will restrain myself not to talk big. But it is too difficult to ignore the big picture to see the trend for a good opinion.

Yesterday, our stock market had a big swing of 900 points from the lowest point of below 8,000 going all the way up in the final hours to almost 9,000 after GWB's speech. But what that supposes to say if you further factor in yesterday's bond market upswing? Very interesting for both going up at the same time, right?

Also, so surprising enough to hear a lot of "lip service" done by GWB boys after they mess up the world. Before G20 meeting this weekend, GWB has talked a lot about "free enterprise", "market mechanism", and "transparency." Sounds like they are not a politician, but a good intelligent scholar knowing what capitalism is? When I looked backward to the performance Secretary Paulson and Senator Schummer made on last Wednesday to beg the bankers do something in return of their favors done by FED, like more willingness to lend credit out, to help the economy. It is so funny to make me laughing at both of them all day long.

For example, when Senator Schumer, chairman of finance, pointed out, all the bankers are very cautious or reluctant in lending money out (sounds only interested in raking FED money into their vaults only for the expense of their compensation bonuses). He seems know the basic of market. However, I don't blame those bankers' reaction after they are beaten by "the past reckless lending deeds." They learned something on the trial and errors; and we should be happy to see their correction or improvement. It is not strange for them as a capitalist as we are.

Will you lend money out to a person with no profit (positive income) in sight, if you were them? Further, did we just recently ask a banker to have "responsible lending" (sounds familiar, right?) as his ethics? Do you consider it a prudent decision or responsible practice at this time that a banker lends money or renews the old loan to anyone with gloomy sales, negative profit and possible "bankruptcy" in 6 months or near future? With "infinite" resource, FED refused to do that for the Lehman Brothers, would it be too much for us to expect from a private banker with limited financial power?

How could both VIP politicians conversely suggest to adopt a LOOSE lending yesterday? Do they know what they are talking about? Or suggest a banker go out to start a second round of toxic loan? No wonder a lot of comments saying that they don't have a plan to work on, if they do have a brain. Ooh! a banker is not in charity and a politician is in robbery of the taxpayers to do public charity business. Good enough, that well explains the difference between them.

In what GWB said: "more regulation is worse than less regulation," Even I have to agree GWB is philosophically right. Because we are a human, not God or a machine. Take this house sale as example, I will be very surprised that any regulation can do anything about this real estate practice. As an agent, we are always told to build up our "client" base to accumulate as many investors as possible. How could we limit an agent explore or attract his offer from his "insider" group, even long before he formally puts his REO listing into MLS service and let its existence known to outsiders? It would be very difficult, unnatural or against traditional marketing wisdom of capitalism, right? (NOTE: In business, we call it "relationship" to ease the difficulty and keep contact; and we value it so much that we are used to say, "don't burn the bridge.")

Does it meet our professional ethic codes to do "pocket listing"? If it is not morally right, can it be a legal wrongdoing? I have no right or wrong answer if I look at the nature of our human beings and "creativity" needed for the capital market machine. Given the fact that the listing broker made this listing alive only one day, It would be safe for me to say it could be suspicious about the broker's operation. It maybe created not enough transparency, hardly reasonable, for the broker to perform his fiduciary duties toward the seller/ lender HSBC; let alone a decent fairness to the general public as a whole, in this case.

From this case, I am further reaffirming my belief that Paulson and Bair were wrong in handling the real estate bubble enough to create chaos of mess.

(Note: I made a forecast 2 -3 weeks ago that bankers would change their mentality to hold REO properties into pumping them into the market. Now, some banks are releasing their inventory at a very aggressive price and speed, say in less one month. Sorry, I don't want to mention a name of big bankers who do the switch here. But, allow me to say that GWB is right by saying that people expect and need a more efficient government and our bureaucrats have to listen. So far, after 4 months FDIC took over Indymac, I am still wondering what Chairwoman Bair has done to get rid of those Indymac's REO when she bragged about her loan reduction plan to troubled homeowners in front of our Congress. Probably nothing. A bureaucrat is very good in providing his lip service without a decent brain. Remember this house was foreclosed 7 months ago. Who has done what to make bankers keep those properties on the book, not on the market? )

Enclosed my consultation email and other information for your reference:

From: E T <e@yahoo.com>
Subject: 449 B***** WAY, ****** CA 9**** $284,900 REO
To: *****@yahoo.com>
Date: Thursday, November 13, 2008, 7:42 AM

http://www.realtor.com/***lid=1***024&lsn=6&srcnt=24

http://www.movoto.com/real-estate/homes-for-sale/CA/********.htm

449 B***** Way ****** CA 9****

3 beds, 2.0 baths, 1,288 sq ft

For Sale: $284,900

This listing is brokered by ***** Realty Co. Office: ***-***-2626 Presented by

Marie *****

Office: (***) ***-2626
Email Agent
Visit Agent's Website Agent's Other Listings

Sale History
04/25/2008:	$430,000 *
03/07/2006:	$535,000

Zestimate: $444,000 30-day change: $6,000 Value Range: $386,280 - $488,400 Last updated: 11/12/2008 Status: Active Bedroom: 3 Bathroom: 2 Year Built: 1984 Lot Size: 10506 Square Footage: 1288 List Date: 11/11/2008 Garage Spaces: 2

Investment Summary

This investment summary assumes a 30-year fixed loan, 20% down, 7% APR. It uses operating assumptions of 10% management fees, 9% vacancy allotment, 3% repairs. This investment summary assumes that rents increase each year by 5%. This property would need to be purchased for $241,680in order to generate a break-even cashflow based on prevaliing market rents.

	1 Year	2 Year	3 Year	4 Year	5 Year
Break-even Purchase Price	$241,680
Rents	$24,000	$25,464	$26,978	$29,571	$31,358
Cashflow Before Taxes	$-797	$345	$1,526	$3,549	$4,943
Cash-on-Cash Return	-1.65%	0.71%	3.16%	7.34%	10.23%

449 B****** Way
*******, CA 9****

$284,900 ($1,375 per month ) 3 Bed, 2 Bath, 1,288 Sq Ft on 0.24 Acres (10,506 Sq Ft Lot) |

MLS ID #P6****7

Request More Details | | Listing added 3 days ago and refreshed 8 minutes ago

0 Photos - too new for photos New listing - Photo Coming Soon. Save Listing to be alerted when photos are available. Property Informationfor 449 B******* Way

Property Features
Single Family Property Property Type: Single Family Residence, Detached Status: Pending Sale Area: County: Year Built: 1984 3 total bedroom(s) 2 total bath(s) Approximately 1288 sq. ft.	Type: One Level Style: Traditional Master bedroom Bedroom(s) on main floor Fireplace(s) Fireplace features: Living Room Fireplace, Uses Both Gas & Wood 2 car garage Parking features: Direct Garage Access Forced air heat	Central air conditioning Exterior construction: Stucco/Wood Roofing: Concrete Tile Lot is 10506 sq. ft. Approximately 0.24 acre(s) Lot size is less than 1/2 acre Utilities present: In Street Sewer, District Water School District: ****** UNIFIED SCHOOL DISTRICT

Related Property Transactions

We found 4 related property transactions in the last 3 years.

Transaction Date	Value	Buyer	Seller	Full or Partial	Arms Length	Document Type	Transaction Type	REO Flag
2006-03-07	$535,000	REYES,BAR***OME M SR	NI***SON,NORMAN	Full	Yes	Grant Deed	Resale	N
2006-03-07	n/a	REYES,BAR**OME M SR	REYES,CON***TA L	Partial	No	Grant Deed	Resale	N
2008-04-25	$430,000	FREMONT INVESTMENTS & LOAN	LES Z***E	Full	No	Trustee's Deed Upon Sale	Resale	B
2008-08-20	n/a	HSBC BANK TRUST 2006-A（香港匯豐銀行）	FREMONT INVS & LN	Full	No	Grant Deed	Resale	N

MLS Name	MLS ID	First Appeared	Listing Price	Last Visibility	Last Status
SOCALMLS	P6***7	2008-11-11	$284,900	Visible	Pending

McCain Could Be Elected "TWICE"

Ed Tse (richvalley) — Thu, 06 Nov 2008 15:44:46 -0600

Republicans vow to rebuild after big defeats

After the election was over, I have observed the historical moment; and read and listen as much as possible to find the forces in it.

The thread is very helpful to express "hope" and "angry." Sorry to say, most of them are emotional. They forgot or missed the core consideration of the topic, mainly to "rebuild": What the next constructive step or steps to take for GOP to get up?

Historically, the longest "honeymoon" is only 6 month long. So many elites pointed out two approaches for Obama, mainly focused on a broader and aggressive macroeconomic FDR-style program (socialist way, if you wish to call it) or one-at-a-time daily gradual problem-solving. It seems no third way out for those intellectuals. Incredible for my small brain to imagine. Yes, there is a third way.

I am sick and tired of reports or media saying that consumers "cut back." How come today's report of Walmart sales surged 15%? A poor can't cut back his spending even he has no money at all (sorry to say, he will go rob or steal if that's the case.) The last thing he wants is to be short of the stuffs to survive, or to starve himself to death. Why the general retail sales are dim? Simply, there is a fact that people has no money (those with some are prudent and scared to spent cash. They do the opposite: trying to preserve it). They are not in a position as a "ready, willing and capable" buyer in our professional terms.

Dame it! Don't try be so "smart" as the Banker Paulson to tell me the market is alive or rescued and all we need is just give sometime for the CEO George Bush to cook it. It should be a dead meat as a Zombie in which no deal made, no decent loan given out and no commission paycheck paid for your jobs (i.e. you are going to get in line and employed), I believe.

If Obama is ready and willing to solve the "recession", please don't try to play cute by your academic knowledge and complicated arrogance. Just go look at the bottom or basics, you will be amazed at how simple it is to cure, based on my "town hall" meeting experience of the last Saturday before the election, October 31.

(NOTE: I was invited by my neighbors Miranda and Shawn to their dinner party; and I turn it into a political forum to ask if McCain could do my AIP. The result: McCain was elected as President and "TWICE" shouted out by one of them. Sorry, I didn't mentioned it in my blog; and now I don't provide the details on their doubts, arguments, my answers; and how I connected it to the minds and their daily life experience of those ordinary young people in their 30s who I'd never met.)

It seems to me nobody talks here seriously about what precise programs GOP should take to restore its confidence from average Joe.

I believe the huge vote turnout says something very basic and vital that all politicians have to listen, particularly the GOP leaders. In a Democratic society like ours, the turnout usually is low, unless something bothered people so broadly enough to a point that they lost or disturbed their peace of minds. Look back, history told us that our people was not so crazy about voting except a crisis emerged as we were in 1908, 1960, 1968 recently. Asbestos is safe, stable and silent until it was disturbed to release its huge harmful elements.

There are so many concerns. I'd like to mention two here:
1. What dramatically changed it NOW? A urgency is here, right?
2. Why John McCain lost the election, judging by a poll fact that he was a front runner two months ago, particularly immediately after Gov. Palin delivered her acceptance speech at GOP convention? What caused the switch of voters' mind?

The situation left me an impression that anyone can defeat GOP no matter who represents DEM (sorry to Obama.) The core force that bring down GOP is social anxiety or economic angry toward GOP.
When we changed or destroyed the root of Capitalist Market function, how can we get a good result by using those so-called "free market" tools Paulson claimed (in fact, they are not)? In my mind, I have always had a question: Is it so difficult for GOP in power to solve the recent "recession fear", if not go bow to the neo-mercantilism the wall street upheld?

I am just wondering whether McCain would lose if GOP could stay in the right track of Adam Smith.

PS: I am a conservative capitalist and individualist so that, for now, I am self-restrained myself to say anything on the inflated "HOPE" our people has. I don't even want to say something like some columnists who said "it is just my hope, not my expectation." I believe our America is a great country so that let us be patient for what comes next in a very short time, say 3-6 month, to see if we can overcome and reach the goals as Obaman claimed the night he declared victory.

PPS: No surprise to me for the stock plunges immediately after election. I may post 2 drafts I stored in AR and release them to pinpoint the nature course of stock give-up.

Simple is Beauty: Mercantilism VS. Physiocrats!

Ed Tse (richvalley) — Wed, 05 Nov 2008 12:04:14 -0600

World hopes for a 'less arrogant America'

Catwing 13 hours ago

Naaa to change, I had enough tonight. Like above "the electoral vote goes to the winner of the popular vote anyways, so, in essence, we are already getting a popular vote president ..."
No real need.

*** ET's Comment ***

To Catwing,
Let's do the maths.
Let's further stop the clock and look at the point of time when McCain won 40 electoral votes.
Now, use your imagination. How Obama got the 165 votes at the time being?
In theory, we know the fact that it is a "zero sum" game.   The winner takes all the votes; the loser gets none. To the extreme, even he just has one more vote, say, McCain has a popular votes of 400,000, but Obama gets 400,001. Who gets all the electoral votes of 7 in that state? Here, 1 popular vote equals 7 electoral votes, am I right?
Further, all the states contribute 165 votes to Obama have in fact less popular votes since McCain won 50% of those votes at the time.   Hypothetically, let's assume Obama only gets those votes by a situation that he wins just one more voter in those states while McCain gets more than 400,000 votes in other 3-4 states to have his 40 electoral votes. In other words, less than 10 popular votes would have been weighted more valuable than 400,000 votes in other states.
Further, assume the situation is reversed.   McCain was able to manage to spread his votes into where he was defeated, just enought to have one more vote in those Obama's territories. What could happen? He would get all the 165 electoral votes, right?
Let's just assume 120 votes were so switched to McCain's side. The difference would be 240 electoral votes (120 "Obama's loss" + 120 "McCain's gains") . It would be impossible for Obama to win.   Now you tell me is it fair, reasonable or calculatable? Seems to me it is a gamble casino as all of us is up to the state of Florida to decide who the winner is and our fate in 2000. Bush won, we have the past 8 years of "luck."
Don't you think we deserve a better treatment? Common, dame it, please wake up to realize the electoral college is just a useless stamp to distort the whole picture and further input the uncertainty of the game.

Well, we are in a society which prefers "diversification" of everything to "simple is beauty." More complexity creates uneasy in our minds and makes more income possible to legal profession, since we are some sort of a slave whose brain is used to the tenet "talk to a lawyer before you make any decision."
Compared to other societies, no wonder American legal profession loves to make everything so vague and complex to make our society "lawsuit prone." No way to ask our politician (most of them are legal professionals) to adopt just one basic, classic "British principle" to dramatically reduce the burden of our courts and simplify our life.

FDA Is More Efficient Than FED

Ed Tse (richvalley) — Sun, 02 Nov 2008 22:05:56 -0600

Luckfish 8 hours ago

The original intent was that America was to be a grouping of States...each one a little bit sovereign in it's own right. They decided on the electoral college because they were interested in equalizing the power between the more populous and less populous states. The same thinking went behind having the Legislative branch broken into two houses, the upper of which had equal representation from each state.

Somewhere along the way, all of the states became homogenized together...since the Civil War the phrase "The United States" has meant a singular unit, where before it meant the grouping. Since doing away with the Electoral College would mean a further homogenizing (for better or worse), the question really boils down to "Do we want to maintain or decrease states power in relation to the federal government?" I'm still torn on this issue myself.

*** ET's Comment *** 37 minutes ago

No matter how you want to maintain or decrease state's power, it is a fact that now we almost have no "sovereign" state exists, except some occasions I know of. Situation is not the same as it was 230 years ago.

United States is so far intergrated (or internalizee) into one country. All I see is that the powers of 50 states are shrinking to almost no larger than a province in a centralized system. Using a "federal system" is at best like an autonomy in some formality, but its downsides are much much greater than its upsides to our general public as a nation.

For example, some crooks have use this system to get several driver licenses from many states to avoid their license "suspension" or "withdrawal" to stay on road in other states. That created much greater danger to public's safety.

Another example, one of my friends broke his heart by letting her wife go to California practicing dentistry. Since the state of Washington doesn't recognize California license, they were living in two states. Within 1 year, their marriage went sour for an affair incurred. As I know, they had been married for 9 years and loved their family. I believe that there is no way for them to divorce if we have a more consolidated licence system in our society or one country.

Third example is, in 2004, one of my friends visited California and got her first traffic ticket in her 30 years driving life. Why? She made a right turn on red. Gee! she didn't believe it and talked to her Californian family members and friends. None of those local people believe it too. I checked the webiste on traffic codes. Gee! she was out of luck since California made at least 150 changes in its traffice code in 2002. She would maintain her "perfect" driving record as a good citizen, if she didn't come to California without notice of the rules (It is perfect legal for her to made a right turn in her own state). The cases are endless and I can talk about them all month long, if you let me. Sorry, I just stop here.

Our society has been evolved so rapidly to let our political system far behind to meet the needs of a mdern society. Our federal government has become a incredible monster beyond the imagination of our national fathers. The first President Washington absolutely had less body guards than Michael Jackson. Because he doesn't have one. He walked on D. C. street freely, as opposed to Bill Clinton who has hundreds of safety officers shipped to China when he paid a visit to Peking, let alone 4 Boeing planes to carry all the security equipments.

All the powers derived from the 2 constitution rules for George Washington was no comparison to a govenor of a state at his time. George got so bored, due to nothing to do, no money to spend and no army to dispatch to "Iraqi", that he decided to not accept the 3rd term of presidency and went back home retired. Even President Jefferson went to have a "naked swimming" in Potomac river, and found out he couldn't do nothing but accept a blackmail waiting for him. A lady reporter were there sitting on his pants on shore; and demanded an interview or she won't leave. Poor Jefferson stayed in water until the interview satisfied the lady.

Have fun with all the change or progess we have made so far and think why we've never overhauled our vital political system. I believe you would agree that our FDA has more efficiency over our FED in terms of "Drug" or "Cure" control and professsional ethnics.

So Mad I Am!

Ed Tse (richvalley) — Sat, 01 Nov 2008 18:15:00 -0500

Prosper People-to-People Lending Marketplace

You don't have to be picky to know nothing is going to be perfect without fault.

If we don't believe in people and concentrate just on the bad side of people, nothing can be called "civilization."

I agree that some people are going to abuse whatever a system,you name it and play with it, we simply can't avoid it, just like a government that has been called "a necessary evil" for a long time. But nowadays, a lot of people are asking a more powerful government after subprime loan crisis.
We are going to lost our right track and direction to look down our human nature and ignore the good benefits of P2P lending if we just want to count on institutions or the Big Brother.

Please don't assume anything has no value, except money or return. How can we help those unfortunate invisible poor folks? If you don't mind, I will use an analogy of lottery system. You buy some lottery tickets in a hope to hit the Jack pot. How often you win and screwed up by our governments?

Now, look at how often you can help those poor get up. Besides the interests you may collect, there is one thing most rewarded to me: the joy and satisfaction to help others. What can be more valuable? In some cases I may take in a loss for some trash people, it will cost me some hundred bucks at most. It still be within my limits as a donation to charity. I believe it won't lose your arms or legs as those Wall Street big fats did to us.

So compare its bright side and ugly side of P2P lending. I believe in that most poor or working people are with honor and dignity. Last 10 days, I read reports enough to make me so upset to stop writing for a week. Clearly, the working or middle class are abandoned by those politicians who just provide lip service to saying so sweet that they are helping the Main Street when they are to give to the poor Joe those benefits of so-called "tax credit" they planned stingly, while throwing out billion dollars on the fat cats.

We have to extend our hands out to help each other, not just dependent on government programs, when the Main Street is desperately in need of help.

ps: Recently our Congress passed a law to encourage people to buy foreclosed properties by giving $7,000 tax credit. It is a baloney to me. Who is going to be benefited? I have to say to those politicians: " Congratulations! You guys are doing a good job to complicate the law and hide your intention again."

Anyone happen to know the law? Can you tell me what it is in it? Let me lead your thoughts in some fields?

1) what kind of properties qualified for the program?

2) who the buyer is qualified?

3) what the impacts it will create on "short sale" properties, normal seller's sale or general real estate transaction?

4) what the property tax consequence it will create?

5) in the name of rescuing the Main Street, who are going to really enjoy the benefit of it?

6) can the benefit of $7,000 tax credit given by the program be combined with the previous law giving the first time buyer $7,500 tax rebate? Or it is a no duplicated coupon?

7) in terms of administrative costs, does it put our government in a "better" position to deserve asking more manpower and a bigger government, after they inputed complexity to mess up the system ?

Gee! why those politicians have to make things so complicated? Unless they believe complexity can show others they're a well-educated genius, can they do something smart, better and easy to understand, without unnecessary interruption to business directly and create economic and social uncertainty as a whole? Or as Reagan wanted: simplification of tax?

pps:

Sorry, I can't help but release my anger after last night I watched the interview Charlie Ross had with Senator Schumer who claimed more money, more regulation and a bigger government were needed to deal with the recent financial meltdown. In particular, I am so mad at some people blaming what happened these dayspointing is all Pres. Reagan's fault.

	Detroit's economic Katrina (尚未發行)
	時事評論｜財經	2008/11/01 09:11 ｜瀏覽 1｜回應 0｜推薦 0｜引用 0


	Congress Passes Incentives to Purchase Foreclosure Properties (尚未發行)
	時事評論｜財經	2008/11/01 08:57 ｜瀏覽 1｜回應 0｜推薦 0｜引用 0

	Bailout beneficiary takes over Florida bank (尚未發行)
	時事評論｜財經	2008/11/01 08:44 ｜瀏覽 1｜回應 0｜推薦 0｜引用 0


	Banks borrow record $112B from Fed a Day (尚未發行)
	時事評論｜財經	2008/10/31 10:20 ｜瀏覽 1｜回應 0｜推薦 0｜引用 0


	a bigger economic disaster in the making: (尚未發行)
	時事評論｜財經	2008/10/31 09:42 ｜瀏覽 1｜回應 0｜推薦 0｜引用 0

( 時事評論｜財經 )

One Real Stone Kills All the Bad Birds?

Ed Tse (richvalley) — Tue, 28 Oct 2008 09:05:23 -0500

** Part I **

UN: Financial Inequality Rapidly Grows in US

http://community.marketwatch.com/groups/us-politics/topics/un-financial-inequality-rapidly-grows#comment919092

Mitch4484 9 hours ago

United Nations report has revealed major US cities, including New York, Washington, Atlanta and New Orleans, have levels of economic inequality that rival cities in Africa. The report found that the United States had the highest inequality and poverty after Mexico and Turkey, and the gap has increased rapidly since 2000. The life expectancy of African Americans in the United States is about the same as that of people living in China and some states of India.

http://www.democracynow.org/2008/10/27/headlines

Third world, here we come.

Mitch

** ET's Comment **

RockTexas 3 minutes ago
(your comment)

Third world? I thought it was "third thoughts."

Sorry, everybody in power is busy right now in rescuing the Wall Street or the rich. That's their first thoughts.

(NOTE: Sorry, I made a mistake here. Almost everyone in the game, no matter where he stands in our society, has a mind so programed to just narrowly concentrated on the immediate issue that the media talks about and being confused. Our mind and eyes are too shallow to see the root of problems. We are being chased around like a dog chasing his tail and exhausted. Don't believe me? Please see what happen in the stock yesterday: down, up and rapidly down in the last hour. Do you really think the investors have an idea for what's going on and know what to do? Clearly, the fever, or the fear some called, comes right back the moment FED "band-aid" medicine loses its effects.)

Then, here came out the 2nd thoughts to focused on something like the downfall of housing, who is next to rescue (automaker?) or the recession. They went or go to who cry loud and clearly in the upper classes.

Sorry, you have to wait after all the 2nd ones run out.

PS: Richard Nixon wanted to have "American Independence" when the oil war broke out in early 70', but we failed for 40 years. That's not too bad, only 40 years for a nation.

Something we failed even much longer years. Say, LBJ wanted to stay away from Vietnam by not sending our troop landing on Viet land. Without good advice from everyone around him, he failed to keep his mandate: his promise to people in 1964 election by sending out 600,000 young American soldiers out into the jungle when he made a bad decision by his advisors' mainstream opinion at the time by 15:1 in favor of war, as Wilson dumping his slogan "He is the man keeps us out of war (WWI)" or Bush Sr. changing his claim "read my lips (no tax increase)."

(NOTE: please see the mainstream advice is not always the right one. Now are we making a right decision to choose Obama over McCain?)

LBJ is so anxious to give his idea of fundamental reform into fact that makes himself the most busy president in signing bills into law. One thing he has is to dramatically fix and change the poverty the poor was in. Vietnam war and us failed the dream longer than the idea "American Independence (from fossil oil)."

Who cares the poor? Even before my moving into the countryside, I have lived in decent areas of city and have never known the serious situation of American poverty. People is really dying for help.

What can I say? Well, it is cruel but a reality that squeaky wheel gets grease. Do we have to wait for another Dr. Martin L. King fighting for the poor as the old one fighting for the civil right (so that we are going to have a black president in a month. It took 40 years since the civil right movement. Be patient for a new thing happen.)

You be the judge!

*** Part II ***

U.S. consumer confidence plunges to record low

Terrin Griffiths, economist and industry analyst at the California and Nevada Credit Union Leagues, said consumers are "rather pessimistic" with regard to officials' actions that are focused on financial institutions rather than families' pocketbooks.

*** ET's Comment ***

Finally someone's observation confirms my long-time belief in AIP (American Insurgence Plan) from the perspective of "cash demand" side.

Now you know what really the root?

If McCain adopts my AIP plan, what's going to happen?

Trust me, the situation stated bellow will be reversed immediately to give our economy the guts to rise in which the sentiment in turn lifts the stock market to the sky:

"The percentage of respondents with plans to buy an automobile within six months declined to 4.4% from 4.9%, while the proportion of those planning to buy a major appliance fell to 25.9% from 29%. Meanwhile, those with plans to buy a home rose to 2.7% from 2.3%."

(NOTE: the last item is of no surprise to me per our human nature and the basic of the science of Economy.)

I Would Fight for John McCain to Win, if He Could Speak out "CFPTB."

Ed Tse (richvalley) — Sun, 26 Oct 2008 10:05:36 -0500

Fed heads toward uncharted territory

Ben Bernanke & Co. are likely to cut interest rates again on Oct. 29. And some experts think rates could soon fall below 1% for the first time.

Beyond write-downsThe world's financial system is such a mess that no one is really quite sure where to begin fixing it. NEW YORK (MarketWatch)

****

Uncharted territory!?

Very true! However, not only FED heads to, but also the poor public as a whole has been forced into it, a man-made "black hole."

There is no way to play (or invest) in housing and do stock business (particularly option) recently on a calculated risk control basis, since FED and politicians change game rule almost everyday. There is no fair or safe rule except uncharted uncertainty when the one and only concern FED has in his mind is to just stick onto financial world, i.e. to fix the existing banking system.

Bernanke used to say that we "have to invite private investors back into the mortgage market." Don't just look what he has done or said on its face value, he is in fact driving them out. Let me put it this way, our private investors are being dumped into a financial chaotic jungle as a prudent international investor faced a risky insecure environment of an undeloveped country in the 3rd world. We lost the advantages a civilization has had to a barbarian power. What can we expect, except their taking cash out and putting it under mattress?

No matter how important a traditional wisedom is, every basic normal rule we used to have in our economic activities has to bow to this FED biased concern or love to a spoiled kid. Everything exists for one and only purpose: to serve the existing banks' need "unchecked" on a simple-minded premise that we can't survive if the bankers die. In other words, they are our boss and we are a slave or human hostage to them.

According to a pre-finding in a recent IBM study (or survey), reported by David Weidner in Beyond write-downs, a vital problem exists for FED. That is nobody knows how to begin fixing the banking system even it is broken. So far, 140 interviews made with banking executives in middle to high ranking positions have unveiled a fact or truth; 80% of them are not sure how to fix the problem and 20% are just sit there worrying. Nobody knows what's going on or what's to do next with a clear map in mind.

To me, it can be somehow interpreted as "it is broken so badly that it is truly beyond fixing." The only option is no longer "to fix it when it is broken", but "to replace (dump) it."

FED is a very skilled engineer or complex designer. He has the most sophisticated mind, knowledge and analysis technology to see or study a complicated problem as a scholar sticking his head into a Ivory Tower. Sorry, I didn't say like some bird burying its head into something. To a mechanic in a Main Street garage, it is just more economical to get a new parts and threw the broken one into a dumpster. And it is simple and has no time to waste.

John McCain has been acting like Bernanke, Paulson, if not a GWB. He tried to give us a very complicated explanation on his tax reform or plan if he has one. He just confused us. Common! give me a break. Why don't you take my mechanic's approach, just say something to the points like: "Boss, it is broken. We need a new parts in shop to save time and get job done today, without waiting and further interruption incurred to your normal daily life."

Folks, no presidential candidate shows me he knows who's the boss. Neither am I going to vote for until I am sure who is with the people. John McCain is as busy as Obama in attacking each other. I am not interested in it since nothing in it is for John or me. Can you see any chance that John has to knock Obama off balance by playing this sort of dirty low balls? NO way, Jose!

Sorry, I have to say John is very much in blindness to grasp his last chance to win by proudly and firmly saying: "CFPTB"slogan, doesn't he? That's my impression. You be the judge.

PS: Yesterday, Peter, a friend of mine who is a realtor came to my house. He told me that he lost 3 closings last month, so he ended up no sale, no commission and $1,000 behind. Business is getting worse so that he is worrying about the future income if he stays in real estate as an agent.

My friend is a very polite and smart guy in charging of public relations of his local real estate board. I asked him what the most concern he has had recently. We exchanged viewpoints on Paulson's "credit supply" side and my "cash demand" side. Finally, he said to me it could be the simple way to re-vitalize our economy immediately.

As I know he has supported John McCain even he has the same color in his skin as Obama. he further agreed that John McCain shoud take my "CFPTB" as his war jargon, because it is simple, easy to understand, very acceptable to average Mr. Joes and very effective with no more risk than other plans.

It seems too late now for John McCain who just loves to say "tax rebate", "tax credit" or "trust me I was tested," I believe John could have a much bigger chance to flip "53 against 40 nationwide" around if he starts to talk about "CFPTB." Well, I was encouraged by Peter to release my formula here before I regret for saying nothing to help John:

"I, John McCain, admits a big mistake I recently made. Firmly armed with my long time "Country First; People the Boss" belief, now I proposes my final and natural, truly effective plan: giving $20,000 cash, not tax credit or rebate, to each American Household who is our country's root and my boss, earning less than $60,000 a year. It is so pure simple, not something complicated, no need to calculate.

I promises you the plan will boost our sales, profit and job immediately, to stabilize the stock market next, and finally revitalize our economy and solve the recent global crisis. I, John McCain will ask a urgent fourth debate now if Obama disagree with my formula."

Consider this $20,000 cash a federal grant, no payment, no interest, no pay back is required. PERIOD! Just do whatever you want or dream as the Extreme Makeover coming to town to rescue. Don't worry, my boss, I John McCain will take care the rest as your public servant to uphold our "Country First."

Okay, now close your eyes; and imagine what could or would happen next after this John's speech?

Can We Say It Is a Piece of Cake, If We Are Able to Afford Simple Is Beauty?

Ed Tse (richvalley) — Sat, 25 Oct 2008 10:40:46 -0500

Wow! Joe Can't Spend Money? Only the Big Cats Can.

It is a pleasure for me to watch the following interview. A lot of great profound thoughts.

However, it is clearly not profoundly deep enough to me, I am too curious to satisfy myself to just agree for some points and disagree for others with James. In short, there are twofolds. James is more focusing at tactical field while, I believe, a larger strategical consideration is needed most. He is more inclined to government interventions, and I want the least of it. If more precisely, I am still in a strong belief in traditional wisdom of self-correcting capitalist market mechanism and favor a smaller government.

Well, what you think about Jame's good release of his viewpoint? I will work on my comment on this interview in detail if time is permitted; and tell you why my "cash distribution plan" is the first and basic simple tool we need now based on the observations they have. Those big swings happened at Wall Street recently won't stop until we take my AIP seriously.

James believed Sheila has a similar plan to rescue homeowners. It is not true. Look at what Sheila has in her mind when she disregard Jame's idea of dealing on"case-by-case" basis. On this case, I have to say Sheila is more right to say, ""We need a systematic way to do this, we can't continue to do this on a one-by-one basis" in terms of administrative costs.

But thinking her module idea further, I have my stupid question for you: Is Sheila still "more right" in facing the root of cause this time? I really doubt it, out of common sense.

PS:

Enclosed here is my abstract of Bill-James conversation. All the bold and emphases are added by me. I will take it down if there is a violation of copy right.

October 24, 2008

BILL MOYERS: Watching Alan Greenspan testify before Congress this week, I tried, I tried very hard not to keep thinking of Ayn Rand. I failed.

(Alan testified) meltdown is, "Much broader than anything that I could have imagined," a "Once-in-a-century credit tsunami." The wondrous glories of a free market with no need of pesky oversight had somehow gone wrong. Now you tell us.

ALAN GREENSPAN: I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms?

CHAIRMAN WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working.

ALAN GREENSPAN: Absolutely, precisely. You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.

...

James K. Galbraith is with me now. Professor Galbraith once served as Executive Director of Congress' Joint Economic Committee.

JAMES GALBRAITH:Fear is a factor. But we have an enormous advantage over our predecessors in 1929.. capacity to handle the crisis exists. What we need is a government that's willing to use that capacity, that believes in it...rhaps the way will be cleared for thinking afresh and clearly about the problems that we face and how to solve them.

BILL MOYERS: Well, they have been acting as born-again believers in government intervention.

JAMES GALBRAITH: ... We are going to hear a great deal in the next few weeks about the need for a stimulus package. And a lot of people will be talking about how they will be conceding that the government should get involved short term.

But what needs to be stressed is that we've seen a breakdown of an entire system. The consequence of the failure of regulation, of supervision of the banking system over the past eight years, has been to cause a collapse of trust, a poisoning of the well.

BILL MOYERS: Trust?

JAMES GALBRAITH: Of trust, yes. Banks -

BILL MOYERS: Between?

JAMES GALBRAITH:Banks no longer trust each other because they no longer know whether their counterparties are solvent. Customers no longer trust the banking system. Banks no longer trust the people who would like to borrow from them for commercial purposes. This is a poisoned well. It is going to take a fair amount of time for it to be cleaned up.

BILL MOYERS: Fair amount of time? What do you mean?

JAMES GALBRAITH: My feeling is, if it is done correctly, aggressively, effectively, we could begin to work out of it in three years. But it is not a problem that's going to be solved with a six-month program.

BILL MOYERS: What scares you most right now?...

BILL MOYERS: What's the worst-case scenario you think about late at night?

JAMES GALBRAITH: Right now the thing that troubles me most is not the United States. The thing that troubles me most is that the same ideas of deregulation, of free markets, were applied in the construction of modern Europe. And the Europeans don't have the institutions of the New Deal, a central bank that can lend as necessary.

...

BILL MOYERS: But we've seen Gordon Brown, the Prime Minister of Britain, step forward in a way that our own government hasn't and try to orchestrate a European-wide response to this.

JAMES GALBRAITH:That is true. And that is, you know, collection of the finance ministers getting together over the weekend to try and do this on an ad hoc basis. Mercifully, we have the institutions of government in this country that can act. The Europeans are winging it. They have to go against their charter of the Central Bank, against the Maastricht Treaty and its restrictions on government spending, government deficits. They- that problem is a systemic problem. Our problem is a policy problem. We can solve our problem.

MOYERS:Had a long story saying that Secretary of Treasury Paulson was behind the curve at almost every turn.

JAMES GALBRAITH: That's no doubt true. First of all, the crisis had been developing for a year. When it broke, he sent up a three-page bill to Congress. Many people said that's a power grab. My view was it was a punt. It said to the Congress, "You take this ball. You write the legislation," which Barney Frank and the other leadership of the Congress actually did do. ... All of these things which were unimaginable in mid-September are now policy, even though they were, strictly speaking, part of the bill.

So we are improvising very fast. The next problem is going to be that the economy needs to be dealt with, not just the financial sector. The fact is we have a million homes in foreclosure. That number's going to be rising. It could be two and a half or five million in a few months. We are going to have to take very significant steps to try and keep people in their homes, to try and minimize the amount of abandonment, the amount of blight, the amount of sort of permanent damage to the houses out there and to the people who live in them.

BILL MOYERS: Yeah, that's one calamity I wanted to ask you about. You own a home on which the value of it is far less now than the mortgage that you have to pay off. What do we do about that?

JAMES GALBRAITH: You renegotiate the mortgage. And that is something that has to be done on a case-to-case-by-case basis ( I added the bold size) with government help. That is what, in the 1930s, Roosevelt established a Home Owners' Loan Corporation to do. And we're going to need to go back to that model and do something similar. Sheila Bair, the head of the FDIC-

BILL MOYERS: Federal Deposit Insurance Corporation.

JAMES GALBRAITH: - has proposed something quite similar.

... No. It is going to require federal organization and federal funds. And the states have another problem, which is states and localities fund themselves from the property tax and the local economies.

BILL MOYERS: Right.

JAMES GALBRAITH: Those are collapsing. So they need support and help to maintain their public services, to keep their staff, their civil servants on payroll so that you don't complicate the housing problem, among other things.

BILL MOYERS: And since there's no private capital from that they can borrow now, where do they go?

JAMES GALBRAITH: Well, they have to - the federal government is going to have to provide both operating revenue and support for capital investment by state and local government.

BILL MOYERS: What about the other calamity? The other calamity is that people nearing retirement and the elderly, have really been hit hard in their pension plans. What happens to them?

....

It supports today about 40% of the American elderly population has basically no other income. It's more than half of the retirement of maybe 50 or 60% of that population. Social Security benefits, except for inflation adjustment, haven't been raised in a generation. We ought to think about replacing the losses to some degree in the aggregate that have occurred in the markets by raising Social Security benefits and particularly raising them for the poorest and most vulnerable.

BILL MOYERS: For a temporary measure?

JAMES GALBRAITH: Well, I'm in favor of doing it on a permanent basis.

BILL MOYERS: But, you know, you and everybody else have been reading or talking to or calling for more spending, more spending because that's the only way you say to get capital into the system. But where's that money going to come from, Jamie?

JAMES GALBRAITH: The government has no problem with money. What we're learning, first of all, is that the dollar remains the anchor currency of the world. The euro is the one, is the currency that's collapsing right now, not the dollar.

Uncle Sam's credit is excellent. Uncle Sam can borrow short term for practically nothing these days. Everybody wants to have Treasury Bills and bonds because they're safe. Uncle Sam can borrow for 20 years at 4.3%. That's the same rate that the United States could borrow at for 20 years in the last month of the Eisenhower administration. So from our point of view, we're actually well placed, I mean, as the government of the United States is well placed to take the lead in pulling the country and the world out of this crisis.

BILL MOYERS:But even Barack Obama's website calls the deficit America's "Domestic Enemy." Even he's aware of the fact that the deficit's beyond sight.

JAMES GALBRAITH: Well, the deficit isn't beyond sight. The deficits in the Bush administration in relation to the size of the economy were never all that large. They were certainly larger than they were under Clinton, but that was in part necessary because of the changed economic situation, the collapse of the dot-com bubble in 2000.

The United States government's credit is good. The deficit is a financial number that people are going to have to get used to because there is no way in these circumstances of avoiding an increase in the deficit. One of two things can happen. The government can take action and help stabilize the economy in which case we will have more spending but also more employment.

Or the government cannot take action and let the economy collapse in which case we will have much less tax revenue. The deficit is going to be larger either way. There is no way of avoiding that. The only question is do you work to have a good economy or do you accept a terrible economy?

BILL MOYERS: What are the negative effects of a soaring deficit?

JAMES GALBRAITH: Well, the one thing I would have worried about is that we might not find lenders who are willing to provide funds to the U.S. government,... But that's not going to happen.

It's not going to happen because, as it turns out, the major alternative, the euro, simply isn't viable as a reserve asset for the rest of the world. It's the dollar or nothing. So the United States basically can finance itself to the extent necessary to deal with this crisis. And I'm right now quite sanguine about that, quite confident that we won't face a problem.

BILL MOYERS: You call your book THE PREDATOR STATE, what do you mean predator?

JAMES GALBRAITH: What I mean is the people who took over the government were not interested in reducing the government and having a small government, the conservative principle. They were interested in using these great institutions for private benefit, to place them in the control of their friends and to put them to the use of their clients. They wanted to privatize Social Security. They created a Medicare drug benefit in such a way as to create the maximum profit for pharmaceutical companies.

They used trade agreements to extend patent protections for various interests or to promote the expansion of the corporate agriculture's markets in the third world. A whole range of things that were basically political and clientelistic. That's the predator state.

BILL MOYERS: You call it a corporate republic.

JAMES GALBRAITH: It is a corporate republic.

BILL MOYERS: Which means that the purpose of government is to divert funds from the public sector to the private sector?

JAMES GALBRAITH:I think it's very clear. They also turned over the regulatory apparatus to the regulated industries. They turned over the henhouse to the foxes in every single case. And that is the source of the decline in, the abandonment of environmental responsibility, the source of the collapse of consumer protection, and the source of the collapse of the financial system, all trace back to a common root, which is the failure to maintain a public sector that works in the public interest, that provides discipline and standards, a framework within which the private sector can operate and compete. That's been abandoned.

BILL MOYERS:We saw what Alan Greenspan said yesterday. ... Christopher Cox, said? I mean, it was one of the great recantings in modern American history. Quote, "The last six months have made it abundantly clear that voluntary regulation does not work."

Now, we all know that the government can screw up, too. We all know that government can make serious mistakes. What kind of regulation do you think we should have that doesn't poison and punish entrepreneurial talent but protects the public interest?

JAMES GALBRAITH: Well, first of all, anyone who thought, up until six months ago, that voluntary regulation could work was either being dishonest or delusional. Voluntary regulation is regulation that, by its nature, you can evade. And what happens is that the people, who are most intent on evading it, on not respecting the standards, come to take over the process. Their profits are better. And so they drive the complying firms and businesses to the wall. They out-compete them.

You need to have a mandatory system so that the firms which are more technologically progressive, which are safer, which are more complaint, which provide, which are prudent in the financial sector, which maintain credit standards so that those firms have a competitive chance. That's the first purpose of regulation.

It is a framework which it favors, when it's done properly, it's a framework which favors the more efficient, the more progressive, the elements that are prepared to work within the guidelines set by a larger public purpose.

BILL MOYERS: What kind of regulation do you think might be most effective?

JAMES GALBRAITH: The, well first of all, we need to clean up the mess that's there. And that's going to include a fair amount of legal intervention, criminal prosecution, malfeasance. There was a lot of fraud in the housing sector, ... And people need to be moved out of positions in the financial industry that they have abused.

The regulatory system going forward is going to have to be basically like a utility. It's going to have to treat banking like a utility with limitations on growth, on rate of return, and on credit in such a way as to be much more transparent, to make it much easier to evaluate financial products that are traded. None of this over-the-counter, occult, too complex to value stuff.

We need to end the offshore tax havens and other ways in which institutions have hid out from their responsibility to the country to pay their share of taxes. And we need to have a set of prudential standards that are reasonable and that basically can put the business of finance on a sustainable footing. It'll be a much less glamorous business going forward. But it will be more reliable for the country as a whole.

BILL MOYERS: You are such an experienced economist in your own right. But I hesitate to bring the spirit of your father to this table. ..., of course, one of his classic books is "The Great Crash of 1929". Is the situation today comparable to what happened when your father was a young economist?

JAMES GALBRAITH: It is. The situation today is very similar to the moment of panic and collapse that we saw in 1929. ..., in addition to being a great read, is really prescient in a very balanced way. But I will say that we're not going to go back to 1929 because in 1929 we hadn't had Roosevelt. We hadn't had Kennedy and Johnson. We had had them now. So we have a body of history to work with.

BILL MOYERS: There's a precedent, you're saying, that there are tools there if people want to use them.

JAMES GALBRAITH: Tools, not only precedent, there are institutions. There's a government structure. And if we use them, we can avoid, we can't avoid '29. But we can avoid 1930 and 1931, 1932, when-

BILL MOYERS: When-

JAMES GALBRAITH: -output fell by a third, unemployment rose to 25 percent of the labor force and a third or more of the banks in the country closed and people lost their savings. In fact, we are already in a position of moving to take steps to prevent that from happening. We need to recognize, though, that we can never go back to a system of this kind of buccaneering finance driven, Wall Street-led economy in which a group of people who are profoundly unqualified to run the country are, in fact, dictating policy from perches here in Manhattan.

BILL MOYERS: But there are capitalists like Steve Forbes, I just read a long article by him in the current issue of "Forbes Magazine," who argue that people like you are going to go too far and that it was actually the government's excesses and failures in the '80s and '90s that contributed to what began to happen in 2007 with the meltdown. And that if you have your way, people like you have your way, you will criminalize business. You will raise taxes and dry up the economy. You will take government unchecked into the same kind of catastrophe that unchecked Wall Street has carried us. How do you answer a Steve Forbes?

JAMES GALBRAITH: Well, first of all, I very much agree with him, that it was failures of government that were responsible for this. It was the actual failure, the abandonment, the neglect of the supervisory regulatory responsibility. That's at the root of this.

Just as you cannot prosper without a private economy, you cannot prosper without an effective autonomous government capable of thinking for itself, capable of balancing things out, of standing for other interests, of standing for labor and consumers and for the public interest as a whole. If you don't have that, you're going to get these pyramids, these bubbles, these epidemics of fraud and abuse, and ultimately the collapse of trust and the collapse of the economy itself. That's what's happened in the predator state.

BILL MOYERS: I wrote down something you wrote elsewhere, that struck me. You wrote that after World War II our American system wasn't imperial. Quote, "We spoke instead of community, of freedom, of common purposes and common values. And the world took us seriously because we had paid our dues." What's happened to those values?

JAMES GALBRAITH: Well, it's clear that world has lost its confidence in the responsible role of the United States. Iraq is viewed by the world as reckless and self-serving rather than being a necessary step to protect the mutual security.

In the financial sector, the world viewed us as a safe haven because they believed we had effective systems for legality, transparency and security. That's taken a hard knock. But we are rescued for the moment by the fact that other people's systems turn out to be even worse. I believe that you can turn a page and that you can rebuild the position of the country in the world community if you do so in a way which is fully credible. New people, new philosophies, new policies.

BILL MOYERS: The book is THE PREDATOR STATE: HOW CONSERVATIVES ABANDONED THE FREE MARKET AND WHY LIBERALS SHOULD TOO. James K. Galbraith, thanks for being with me.

JAMES GALBRAITH: Thank you.

Sheila's fix a success? Sure for a Zombie

Ed Tse (richvalley) — Fri, 24 Oct 2008 20:50:57 -0500

One failed bank gets the housing fix right

By Amanda Gengler Last Updated: October 24, 2008: 4:44 PM ET Money Magazine writer

When the FDIC seized mortgage giant IndyMac it was one of the biggest bank failures ever. Now the troubled lender just may lead us out of the housing mess.

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As I know, FDIC sent out 15,000 letters, two months ago, to invite Indymac's debtors/ homeowners to pay and accept the Bair's program. Well, now she claims it a success in front of Congress, remind you she is under oaths, and the media starts crying it out as a would-be role model of fixing the current mortgage mess.

Great! are we finally feeling a relief that our government finally have someone taken care of the shop to do something right. Hallelujah!

Ooh ooh? A success? Really! How many homeowners accept the Bair's offer? Only about 23% of the letter recipients. That's right, so far 3,500 homeowner did it. How about the other 77%? Good question, are they ready to hand keys out under the situation their payments are 90 days past due?

Well, below 25%? It should be graded below "F", per my kid's report card and no chance to get in college, right? How come it can be treated as a glorified "A", your honorable Congressperson?

Gee, Damn it, my instinct, illusion and stupidity! The best or worst really depends on whom we are talking about, right? Sorry, it shall be indeed a perfect "A" to a Zombie the Regulator. What can we expect from people who don't live as we live? It surely is "the best" we American people can get.

Please blame me for my eyes are so wide open, my nose is too keen. my blood is well circulated and my heart is dancing with our people.

Indeed, It is true all my fault to be a living human being.

McCain, Obama, or Zombi rule our economy?

Ed Tse (richvalley) — Thu, 23 Oct 2008 09:16:48 -0500

Is it really so ordered by the doctor Adam Smith or John Keynes?

Up this morning, radio news reports:

1. Unemployment is up again. 15,000 people got into the line for the benefits. Gee, we already had an aggregate of 9 million people lost their jobs in a year!

2. Foreclosure is up 70% this quarter. When the trend can be stopped?

3. Alan Greenspan is about to testify in Congress today to express his view that we have a once in a life time "credit" tsunami. (NOTE: Gee! Alan, are you out of your mind! What are you talking about? Who cares about a narrow "credit" while facing a broader gigantic "ECONOMIC" tsunami. See below to see a Alex's remark) The reporter John Delmare asked who can save us? John McCaiin or B. Obama?

I am just wondering none of them have a specific plan, let alone an effective plan to solve the difficulties we have faced today. All they talked about is any kind of principle. They are good in labeling each other: socialism or capitalism. The only thing I liked so far is the nuclear power plant John McCain supports when I dislike his recent "spreading the wealth." No, trust me, Obama is not so smart to come up an idea of "spreading "it, even he did say it is for us to "steal(ing) it" from the crisis.

In a comment on Irwin's article, I mentioned that there is a clue to the map for us to see the light of direction. Allow me to quote the comment here:

Gee, in this crisis of economy and presidential campaign, it seems we have a "Joe the plumber" without license and "the Henry the Secretary" without foresight.
Situation is somehow like if we ask a blind: "you told me we had an urgency to spend $700 billion today on the front of a war. How come everything went so wrong! Did you put it on the front?" I believe, the next question out of your mouth for him would be like this: "Can you tell me where the front is?"
Ouch, where is the front for us to fight? Gee, as Johnny the illiterate can't read, are you asking a Hankie the blind to see the front side of a coin?
Here enclosed is a hint to the map, can you see it?

October 22, 2008 12:20 P.M.ET
BULLETIN Dow falls as much as 700
INVESTOR ALERT
Earnings worries slam stocks

In the past two days, the frequent terms used in financial reports are "less earning", "no profit", "lower crude oil price", "job cutting" and "dim sales." What all these mean? To me, they tried to tell us one thing and one thing only: no incentive of profit. As to stock, we may call it a lack of reasonable calculated risk of profit.

Without incentive, we are transformed into a zombi (no wonder some called it "voodoo economy" recently.) No matter what it is in housing, financial, retailing or whatever you name it except crime, divorce and Ebay sale, the downfall can't be stopped until we infuse it.

There are so many symptoms to the distress and so complicated to blind us to see the main cause. Maybe the US economy does happen to have a heart attack and cancer at the same time as some people claimed. If we skip (or ignore) the complexity and clarify our thoughts (to run into a possible single-minded risk) as Dr. House in "Grey's Autonomy"; or let me put it this way, if we can be so decisive as the GWB gang found the one and only resolution to cure the crisis: to spend $700 billion on "bad assets," can we find the main cause and a real medicine to urgently turn the economy around and stop job losing immediately?

What's the main cause or the one and only medicine under this simplified consideration? I keep asking myself the question and try find an answer. I have to say the main reason that causes all the above terms so popular can be concentrated on "demand" side, not Paulson's answer of (credit) "supply" side.

Last night, I listened to Charlie Rose. The former CEO Alex of Bear Steam claimed that the concept of "investment bank" is now dead and has no way to work again, after its great contribution to this country for 100 years. A century notion can be vanished or abandoned overnigh, really?

Wow! new generation needs new toys. How can we make our society more fitter to survive or take new challenges? Ooh, well, we all hear our society have all kinds of problems, like a lawsuit-prone society or "well regulation" or "no regulation". Can we dump the idea of "lawyer rule" to have a much simplified society as Japan that a hot topic in 1980'? Can we do... It is too much for us to think for now.

Let's just pick this crisis dragging down everything financial and look at it very prudently. Can we find a quick fix except the Paulson's baloney that is not working?

Sure we can do it easiy. Am I kidding? Damn it, excuse me for expressing myself again. Yes, I am surely an incurable optimistic, a capitalistic one, but not a naive.

ps: No matter what kind of same old shits we put in today, tomorrow is still another different beautiful day with the Sun rising from the East as Annie's song. Who cares whatever damage the GWB gang is doing if I can't do anything about it and I have my cute American dollar under my mattress?

Is it really so ordered by the doctor Adam Smith or John Keynes?

Ed Tse (richvalley) — Tue, 21 Oct 2008 13:14:27 -0500

IRWIN KELLNER

Just what the doctor ordered

Commentary: Bernanke stimulus prescription exactly what U.S. needs

But a good dose of fiscal stimulus is also necessary to boost spending and create enough jobs to ameliorate the ongoing recession.
Yet more stimulus is needed.
For one thing, much of the funds mailed last summer went to reduce debt and/or replenish savings accounts.

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The above points made by Irwin are good to certain degree, but not good enough to tell the whole truth.

Yes, Irwin is right on the notion of "a good dose." How much is considered as "a good dose"? I have to say it is a critical judgment. Is it really so ordered by the doctor or just by a whole bunch of jerks?

Most media are concentrating on the quick fix: "spending" effects of so-called "stimulus" plan as they are eating a fast food or engaging in a instant "one night stand" to release their instinct drive; hardly will any elite talk about a long fix: a "investing" effects of it, to prolong our body health.

There is always two sides on a coin. Yes, some deadmeat spend or borrow recklessly as an insane person. However, as a rational person, nobody like to spend if he has no need to survive or have a good living. Nobody like to borrow if he has no need to make a better future or incentive to use leverage to make a better return of profit.

Saving and spending have the same weight for the healthy life of economy. Same is true for both lending and borrowing. It is usual and normal in our life, why we seem to think one is good while the other is bad? For our survival and prosperity, both are needed depend on a situation. It is not safe to say a saving is absolutely right all the time in all the circumstance.

I believe our people is not too crazy to make his own decision for good. It is not too late for our society to rescue itself.

All we need is just give it a "GOOD" enough dose as Irwin said and the doctor ordered. Last "tax rebate" of $600 is good for 3-4 months in terms of boosting consumer spending, but clearly not a good dose to economic recovery. A small amount of $600 of "stimulus" formula is enough to boost "consumer spending" for a short period, but it had no real vitalization to our people or the economy.

Now, let's be cool to face the Bernanke "stimulus" pill as we compare Tylenol to Advil. How many tablets we really need for temporary relief or fundamentally work out to cure the disease?

Well, my judgement is 30 tablets for a real cure, i.e. $20,000 in the current financial mess. What you think?

p.s. :

Folks,

I understand fully with your feeling and frustration. However, don't just express your emotion here, since I didn't do it.

Let's face the reality: we live in this system and have no muscle against those big jerks in DC or the Wall street who want to spend our taxpayer's money as their toys or hobby. Well, do you have choice if they insist on spending your money? It is very clear that our complaints mean nothing to them if they can pass the "$700 billion" bill into law. So just complain is of no use.

A bloody revolution as the Tea Party did? I don't believe it could be your choice, at least not mine. As Darwinism said: "the fittest survive", we have to cope with the real world or politics. Not just whinnnnning, whinnnnning, and whinnnnning all the time. No accomplishment can be made by that way.

So find a better solution like my young daughter said: "you don't like it, deal with it." That's why I am here to express what I disagree with most media's one-side perspective on "stimulus" plan. Is it just "spending, spending, spending", nothing else for them to talk about? I totally disagree and disapprove the formula by Paulson and Bernanke as you are. However, let's discover the false "doctor" formula and mine; and explore the truth and the real power of the "right doze".

Don't just give me a thumb down, please understand I love to see your points. Isn't it a reasonable communication that is all about why we are here?