A dirty little secret

But first, my Republican debate recap....

What happened to the sniping, and the jibes at The Donald's hair, and Ben's days as a juvenile delinquent?  NOTHING!  It never came up.  So boring!

Actually it was a fairly respectful exchange of real ideas.  For that I give credit to the moderators from the Fox Business News channel for doing an excellent job.  They didn't try to blindside anyone, they asked meaningful questions, and when the candidates gave rather soft, squishy answers, they followed up, "So to make this clear, you're saying you're NOT in favor, is that correct?"  Bravo!  They didn't let anyone do an end run as most politicians will do if given a chance.

Mark O. Rubio is IMHO the slickest of the bunch.  He is an excellent speaker, has good hair, was never rattled, but seemed to use too much "politician speak" to suit me.  He often speaks in non-controversial terms like "promoting family values" and "my parents were working people who loved us and worked hard to provide for us".  Well duh....who isn't for that?  He's definitely the voice of the Republican Washington establishment.  He did have some concrete ideas for immigration reform, though.

Carly Fiorina came across as the most hawkish on a stage of (mostly) hawks.  I'm thinking Donald Rumsfeld and Dick Cheney were watching at home saying, "Damn!  She's tougher than either of us!"  But she was almost scary looking....properly erect, glaring eyes, not smiling, almost gritting her teeth when she spoke.  Her demeanor reminded me of one of those bad boy Germans from the 1930's.  Her proposal for a zero-based budget is good, but the crooks inside the Beltway are not about to give up their slush fund.   Not going to happen!

Jeb did his best, but he still fell short.  Dr. C seemed in control, if not break-out hot, Donald Trump managed to muzzle his mouth fairly well except for one jab at Carly, Rand Paul....or is it Paul Rand?....is still wearing his tin foil hat, and even Ted Cruz (I almost throw up in my mouth when I say his name) made some good points.  Being the pragmatist that I am, I liked John Kasich, but as he's not one of the "beautiful people", I don't see him going anywhere.  So be it.

Now for my dirty little secret....

The Repub's talked much about tax reform, the common thread being the popularity of a simple flat-percentage tax and doing away with most deductions and loopholes, except the home mortgage interest deduction.  They argue it promotes home ownership and therefore good citizenship.  The truth is "The American Dream" of home ownership doesn't need to be supercharged by the gubment.

Here's why:  Roughly 65% of Americans own their homes, the rest for various reasons rent or live in mama's basement.  Of those who own, approximately half itemize their taxes and take the mortgage interest deduction.  The rest either own their home outright and have no mortgage (and therefore pay no mortgage interest), or are at that point in the life of the mortgage that they are paying mostly principle and very little interest.  For them the standard deduction (short tax form) works best.  That means only about 33% +/- of us actually take the deduction.  The 2/3 of us who don't take the mortgage deduction are subsidizing the 1/3 who are.

It's rigged.  This whole scheme exists primarily to benefit the lenders (bankers).  When they make a mortgage loan, it is front loaded with the interest, the principle paydown (the part that builds your equity) not coming until the final few years of a 30 year (or 15 year) mortgage.  In other words the bank gets their profit up front, then if you pay the loan off early (usually by selling it to someone else who gets a brand new mortgage), they don't care.  In fact they love it....they can start their front loaded money making scheme all over again!

To help them sell this ripoff, Congress years ago (1930's) began actively promoting home ownership via the newly created FHA, necessitating new mortgages.  Cha ching!  (If you don't think it's good to have friends in high place, just look at the bankers!)

Congress isn't offering us a mortgage interest deduction to help us.  (But of course they'll tell us they are.)  They're doing it to help their banker buddies!

My industry, homebuilding, goes all ballistic when anyone suggests the home mortgage interest deduction be eliminated.  "But nobody will ever buy a house again" they squeal.  That's BS.  Up until the 1980's (?) we could write off the interest we paid on credit cards and auto loans, too.  Guess what?  When the IRS phased those deductions out over a number of years, people didn't stop using their credit cards or stop buying new cars.  Not at all!

If we were to, over a decade or so, phase this deduction out it would bring in hundreds of billions of additional dollars to the Treasury every year.  If that money could be used entirely to reduce the national debt and not be siphoned off by Congress to fund other pork projects (like the Social Security Trust Fund was), imagine the effect on our financial stability.  

Imagine how much less the government would have to spend on debt servicing.  Imagine how much our country's credit rating would improve.  Imagine how much lower interest rates would be.  WE WIN!

All of us except the bankers, that is.  That's why this will never happen.  *sigh*

S

Remember my words!

I see that our illustrious Congress has passed a $1.1T spending bill to keep our gubment up and running for a while longer.  So be it.  But what really chaps my hide is that the unbelievably powerful banking/financial services industry has scabbed on to it a provision that pretty much guts the Dodd-Frank Banking Reform Bill.  WE...ARE...SCREWED!!!!

Basically the banks have been given a green light to get involved in highly profitable, but highly risky investments that are likely to eventually blow up in our face.  I say "OUR face" instead of "THEIR face" because when it all hits the fan again the banks/Wall Street will simply form a line at the Taxpayer's Bailout Window.  Congress has just put us all on the line....we just co-signed a TRILLION DOLLAR note!  *how's your sphincter feeling now?*

Gamblers eventually lose, and these days banks are just glorified, and very highly paid, gamblers. But when these gamblers lose, THEY don't lose.  Their money is safely tucked away.  It's OUR piggy banks that will get robbed.

So when is the bottom gonna fall out again?  Three years?  Five years?  Eight years?  Who knows?  But I fear this next time, unlike the financial meltdown of 2008, the rest of the world will be in the tank ahead of us, with no strong player(s) to pull us through.  (In '08 Europe and China were doing pretty well, which helped absorb some of the carnage.  Today they are in trouble, too.)

I hate being the bearer of bad news, but please don't shoot the messenger.  Shoot Congress and the bankers*.  Please.

S

*figuratively speaking, of course  *Hi NSA*  :)

Jail the bankers!

What's a guy to do?  With your eye on a new truck and needing a fast buck, you decide to turn to crime.  You walk into a business, demand money, then walk out with $1000. You get caught and the judge fines you $200 and sends you on your way.  That's it.  

Hmm....at that rate you can net $800 every time you visit your local liquor store, 7-11, or Walmart.  If you need $1600, just be sure to steal $2000.  Need $3200 for your Black Friday midnight run?  Steal $4000.  The fine is just a cost of doing business.  

It's not your money....what do you care how much the fine is?  What's the downside, except for that pesky little part about eventually going straight to hell?  Sure beats working 40+ hours a week at the sawmill.

That's essentially the way our large, prestigious (?) banks do business these days.  Today's paper reported that a number of big banks have once again been fined, this time $3.3B for manipulating the foreign exchange (currency) markets while enjoying a windfall of untold billions of dollars in "profits" in the process.

In the last few years the "Too Big To Fail" banks, the ones you and I (the taxpayers) bailed out after their greed f__ked up the world's economy back in '08, have collectively paid $251B in fines for....let's just call it what it is....THEFT.  And they're still reporting record profits!  That's just a portion of what they made off their crime spree.  The rest they've already spent, some of it going to themselves as a thank-you bonus for their "hard work".

And to rub our noses in it, just know that it's the SAME banks that keep committing these crimes over and over again.  They've learned that crime DOES pay!

Wanna stop 'em in their tracks?  JAIL THE BANKERS!  Put them behind bars.  Put them on a bread and water diet.  Put them to work busting rocks in the hot sun.  Turn 'em over to that Hang 'Em High Sheriff fella in Arizona for a year or two. 

But as long as we keep electing politicians who are also profiting from this behavior (via political campaign contributions from the bankers) nothing will change.  We the sheep will still be led to slaughter. 

*this is insane*

S

The building crane is once again our state bird

Not sure what to think of this:  It was announced this week that Toyota would be moving all it's US divisions....sales, marketing, engineering, and manufacturing....to my neighborhood here in the Dallas area.  They will be building a 70 acre office campus on Headquarters Drive in Plano, just down the street from K's company headquarters.  Four thousand jobs will be moving here.

This on top of six thousand jobs State Farm Insurance is bringing to their new 1.5M sq ft towers now under construction.  There are also a dozen or more 10 story +/- office towers under construction for smaller clients, too.

They say they're coming here because of our excellent "quality of life" (true) and relatively low cost of living (also true), affordable housing, etc.  But as I see it they could quickly turn all those categories around for the worst.  

Our housing costs have gone up 10% in the past 12 months.  The next 12 months could make that look tame.  If these huge relocations were spread out over time they could all be easily absorbed, but all at once, I'm afraid they might overwhelm us.

Your sense of civic pride gets all "chest poundie", but your brain says proceed with caution.  Oh well, I guess it's a problem many parts of the country would like to have.

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This, however, I know exactly what to think of:

Two Giant Banks, Seen as Immune, Become Targets

 

'Bout time:   It seems the Feds are finally getting serious about slapping the big banks down after letting them run roughshod over us for a decade. 

 

What the country's best dressed bankers will soon be wearing?

Some have been laundering money for Iran and others, while others have been setting up tax dodges for wealthy Americans looking to skip out on their taxes.  And many more are still hiding under their desks, waiting to see how long they'll be locked up*.

 

Yes!  The Feds are actually going after them on criminal charges, and not for just some hand-slap paltry fines.  Good!

 

The banks that exist today are NOT like the banks that worked so well for so long and made America great.  Maybe....just maybe they're about to learn they're not "too big to jail".  Now if we could just break them up into parts not "too big to fail".

  

Without the taxpayers safety net (read: blank check) maybe they'll learn to make prudent loans to prudent borrowers again.

 

S

 

* I doubt anyone will personally be put behind bars. Darn! 

 

 

Do the Tea Party folks THINK? I have my doubts.

These Tea Party-types leave me scratching my head.  Can they really be as simple minded and gullible as they seem?  They're educated idiots.  Case in point:  

They say they want less government.  They say they don't want the government bailing out failing businesses.  Government bailouts = deficit spending.  Deficit spending = BAD.  They say, "Let 'em go broke!  Survival of the fittest." Fair enough.

So federal financial regulators finally got the Volcker Rule passed.  This rule prohibits banks from taking depositors money and investing it (gambling with it) in certain high risk ventures.  They've been doing this for years, much to their advantage.  Usually.  If all goes well, the bank's shareholders (NOT the depositors) make HUGE profits, and the bankers individually get HUGE bonuses.

But if things go badly, such as what happened back in 2008, they simply run to Congress asking for a few hundred billion (with a B) dollars or they say they'll close their doors and take the economy down with them.  

If things go well, THEY win.  If thing DON'T go well, THEY don't lose, the TAXPAYERS do.  Sweet deal, huh?

The Volcker rule is good.  It reduces the likelihood the banks will ever need a taxpayer bailout.  The bankers, of course, don't like it because in gets into THEIR pockets.  They were quite happy with things the way they were.

Give a guy a suit and a haircut and some little tiny glasses....

Enter The Honorable Gentleman *snicker* and Tea Party darling, Congressman Jeb Hensarling (R-TX).  He's the Chairman of the House Financial Services Committee, the folks that oversee the banks.  He will soon be proposing a new bill that will open up a HUGE loophole in the Volcker Rule, essentially allowing the banks to go back to doing business much like they used to.

Let's review: 

The Tea Party does NOT want to bail out failing businesses, including (presumably) banks.

The Volcker Rule makes banks act more prudently.

The Tea Party LOVES Jeb Hensarling.

Jeb Hensarling wants to open loopholes in the Volcker Rule that will allow banks to gamble again, increasing the odds banks will some day need another taxpayer bailout.

Does this make any sense?

I wonder how much the banks "donated" to Mr. Hensarling?  Wonder how many of his friends and relatives and supporters have received "sweetheart" deals, or maybe employment, from the banks?  (There are lots of ways to reward friends.)

How many times do I have to write about this?  Vote the bums out.  Or send really mean emails, or riot, your choice.  ;)  

S

Troubles in Europe

Apparently tourists are voting with their feet, and they're traveling increasingly to places other than Paris.  The stereotype at least is that Parisian service providers are crabby, so unpleasant the Paris Tourism Board had 35,000 pamphlets distributed explaining how to behave towards tourists.

"The British liked to be called by their first names.  The Japanese like to be reassured.  The Spanish just want people to be nice.  Americans are glued to their electronic devices and like to eat as early at 6 pm."

Paul Kappe, an owner of the renowned Brasserie de I'lsle Saint-Louis, perched behind the Cathedral of Notre-Dame, gave a Gallic shrug when he saw the brochure.

"In the United States", Mr. Kappe observed, "waiters can be fired at any time and must work for tips, so they have to be nice. In France, you can't just fire somebody if they're not doing a good job.  If you could, everyone would be friendly."

Ummm....

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And apparently HRH Queen Elizabeth II is having a tough time making ends meet, too.  The headline in today's paper read:

England:  Queen's Swan Is Barbecued and Eaten

(Maybe I should go back and read the accompanying article?)

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On a more serious note, I recently watched an episode of Top Gear (British car show) where the guys drove some exotic convertibles around sunny Spain.  The striking thing that was pointed out was how economically depressed things are there.  You can read about it, but until you see it you can't really comprehend it.

Spain had a building boom just like we did in America, their bankers throwing money at builders and developers and unworthy borrowers while raking off Mucho Euros for themselves in the process.  (Apparently we don't have a monopoly on crooked Banksters.)  In some areas, as far as you can see, tens of thousands of unoccupied high-rise condos sit abandoned.  

There was even a billion-Euro airport built, complete with a 15,000' runway (wildly excessive), that sits unused, rotting.  And long stretches of roads equal to our Interstate highways are totally empty.  There is no traffic.

The Spanish economy is in ruins.  Overall unemployment is 25%....youth unemployment (<24 yrs) is 56%.  It will take them years to pull out of this self-inflicted disaster.  Kinda makes our mess here seem tame, doesn't it?

Q:  And what have governments / regulators done to see to it that this can't happen again in the future?  A:  Almost nothing, here or there.  And don't bother writing your Congressman to complain.  They're probably on a junket somewhere with their sponsoring Bankster.  (They can probably get a helluva deal in Spain.  Just sayin'.)

S

Kickin' ass and takin' names

Transgender Navy SEAL 'Warrior Princess' Comes Out

Then and now....I think I've found the person who should be in charge of cleaning up the sexual misconduct scandal now rampant in our military.  ;)

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It's been five years since the banks rolled the dice one time too many and just about took down the world's financial system, and three years since Congress passed the Dodd-Frank bill that was supposed to bring the bankers back into line with sane, sensible practices.  (Note:  Isn't it ironic that the former Senator and Congressman the bill was named after were two of the banker's most egregious enablers on the way to their going over the cliff?)

Three years, yet only 38% of Dodd-Frank has been implemented.  According to today's USA Today, the bankers have so far been successful stonewalling 62% of it.  The fox is truly in charge of the henhouse. 

Think after the "Warrior Princess" kicks ass and cleans up the military she can go after the bankers?  

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Yesterday the Supreme Court hit a home run.  They've managed to piss off just about everybody.  They narrowly ruled 5-4 that people charged with a felony can be required to submit to a DNA swab.  The original argument for DNA testing was to prove the identity of the accused, but the dissenters say the test results will go into a database and be used to possibly solve other past, present, or future crimes.

The big outrage is that this is (some say) a violation of the Fourth Amendment which forbids searches without reasonable suspicion to gather evidence for an unrelated crime.  Ummm....hold on there Kemo Sabe.

How is this any different than people charged with serious crimes giving up their fingerprints to a database?  That's been used to solve crimes and is admissible as evidence in court for as long as I can remember and nobody seemed to get their knickers is a wad over that one.  Isn't DNA evidence just a newer, state-of-the-art version of fingerprinting?

To me the issue should be whether DNA swabs should be taken and entered into a database from those charged with a serious crime or only from those convicted of a serious crime?  Big difference!

Just something for you to think about.  :)

S

I'm pretty sure Freddie Kruger went on to be a prominent banker

When you were a kid did you ever do something you weren't supposed to and then get caught by your mom (or dad)?  Maybe you were told you could play in your yard or David's yard (next door), but nowhere else, then she came looking for you and found you six yards down the street playing with Tony?  (Or Toni? *wink*)

She was worried and mad, and she spoke to you firmly, or if she was really ticked she would take you home and give you a spanking.  You cried and/or were embarrassed, and you promised to never do it again.  And you didn't, 'cause you knew she was watching, and you certainly didn't want to get caught again.

Apparently today's Ivory Tower bankers were never disciplined as kids.  To this day they do things, get caught, then go back and do them again and again and....

Instead of saying, "I'm sorry, it won't happen again" and then cleaning up their act, they just pull together their top people and brainstorm better, more devious ways to cheat.  To them it isn't a sin to cheat.  It's only a sin to get caught.

Case in point:  The Federales (8 different agencies) are all over JP Morgan Chase bank for screwing over the public in too many ways to list here.  One of the more egregious was a scheme to turn some money losing power-generating plants they owned into powerful "money centers".

....under "pressure to generate large profits," the agency’s investigators said, traders in Houston devised a workaround. Adopting eight different “schemes” between September 2010 and June 2011, the traders offered the energy at prices “calculated to falsely appear attractive” to state energy authorities. The effort prompted authorities in California and Michigan to dole out about $83 million in “excessive” payments to JPMorgan, the investigators said. The behavior had “harmful effects” on the markets, according to the document.

Shades of Enron!  Oh, just FYI, the very senior Chase banker responsible for this fraud, Blythe Masters, was one of the original developers of those "credit default swaps" at the heart of the worldwide economic meltdown of 2008.  

"...and then we wring every last cent we can out of them.  Now, about my bonus..."

See why I'm so down on the big money-center banks?  They are NOT going to change their ways, I don't care how many eyes they have watching them.  That's why these big banks need to be broken up into smaller, more transparent, easier to oversee pieces.  

These guys are just gangsters in high-dollar three-piece suits.

S