Words

Let's not call it a bailout, although that's what it is. I prefer economy rescue. Pelosi says it's a buy in. We will take over the mortgages - mostly bad ones, I'm afraid. As they are paid or the houses change hands, we will be paid for the paper.

Last week in an effort to sell this bill, many were saying the taxpayer would be protected and these mortgages would be paid back to the taxpayers. Let's be clear. You and I are not receiving any of that money. Any in-flows will go back into the treasury to off set the $700 billion pay out.

Now, we will watch the market. We will listen for stories of loosening credit. We will listen and watch for the costs of credit. Will any of this affect interest paid on deposits at banks and into money market funds?

Today is a new day and this is a new week. Let's hope we can all get on with our business. I pray the nation will return to work with a better understanding of how the credit situation in this nation works. Let's all save more. In the past week, money was king. Those with it had many purchasing opportunities. WaMu had to sell assets at a big bargain to Chase.

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Baseball

The Chicago Cubs won the World Series in 1907 and 1908! It's been 100 years and many think they are due.

In 1907, the U.S. financial system faced disaster and the banks were choking on unwise loans. True fact. It took a federal bailout and the influence of J.P. Morgan to steady things.

Last year after the Cubs won their division and again this year as we face the near collapse of credit availability due to new accounting regulations and unwise mortgages thrust down the throats of banks by good intentions. Longtime Cub fan, Joel Solomon of Rothchild Investment Corp., is quoted, "The worse the problem, the better the Cubs' success."

This morning we know the Feds are near voting on the credit rescue bill. Recently J.P. Morgan Chase (Chase Bank) took over Washington Mutual Bank. By all accounting methods, this was a sweetheart deal for Chase.

This week we will know more about the future of credit flows. I'm so glad President Obama made it to Washington and straighten things out.

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Obama Wins

It's over. I concede. President Obama will be sworn in January 20.

Let's leave McCain in the Congress to fight for us. Let's get rid of the likes of Shumer, Rangle, Frank, Pelosi, Dodd, Durbin. Let's clean house. Let's find some smart people who are rich enough already and don't need the $. Let's find people who already have enough power so they won't be throwing their weight around but care what happens to every American.

Let's put in Aaa-nold, Trump, Gates, Gingrich, Buffet. Plenty rich. Plenty powerful. Plenty seasoned. Let them run us like a business - efficient and focused.

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It Stinks

If this "bail out", rescue mission, so very wonderful, what is the problem? Bush is behind it. Hank Paulson wrote it. The Republicans control neither house.

If this legislation is so perfect, timely, crucial, and important, why hasn't it sailed through and landed on President Bush's desk?

If it's the saving move, the Dems should be all over this and taking credit! They will have saved the financial world as we know it. They would take a cake walk back into office if they are up for election. They would clinch the presidential position for Obama. They would each be saviors.

This bill stinks. Possibly on many fronts. Otherwise, there's no reason we have been stalled all week. It would be law by now. There's something rotten here and no one is talking.

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Retirement Planning

We are not sure how much income we will need in retirement. Will we need 70% of our normal income? 80%? Less? I think it must all be effected by how long we live.

A quote recently seen: "Some working people spend only 30 percent of their income, while others spend 150 percent. It is your preretirement spending, not your income, that affects the predicted cost of retirement."

Interesting thoughts. How much of our income are we spending? Saving? Giving? Soon the quarter will end and we will examine our monthly expenditures. We can say our budget has been blown with the costs of fuel for the car and the utilities.

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Tick Tick

There are three weeks left if you have not yet filed your 2007 tax returns. An extension requested in the spring was good for 6 months. Your tax returns must be signed and postmarked on or before October 15.

Three weeks, three weekends.

The reward for filing this year was the stimulus check. After your taxes are received, it will take Uncle Sam 8 to 12 weeks to process your stimulus check. Hopefully, this will be just in time for Christmas shopping.

Time is running out and soon 2008 will be over as well.

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Restful Feeling

It's Sunday, a day of rest. I know most of us don't really rest. There are lawns to mow, meals to plan, groceries to purchase, cars to fill, football to watch, and family to visit.

It's Sunday, a day of worship. Time set apart to gather with believers to praise and thank God.

What will I do with this set-apart day? What about you?

A moment to say thank you. A moment to count your blessings. A moment to breath in the air and let go of tomorrow.

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Busted Dollar

This whole week has been confusing and maddening. I'm not sure I will ever understand why the government is bailing out businesses that are about to go bankrupt. How do they decide to bail out AIG and not Lehman Brothers? How could government tied businesses Fannie Mae and Freddie Mac suddenly need help.

I suspect these did not happen over night. I am not convinced we need more government, more watchdog regulators, more policing to keep things in the black. When has the government run anything more efficiently and cheaper? Never.

Economic entanglements are beyond the comprehension of my simple "regular joe" experience. I think this is true of millions of hard working people.

Over $170 billion have been withdrawn from money market accounts this week. People are worried about their safe nest eggs. Money markets are not covered by the government FDIC. One money market fund (I can not remember the name) had their dollar busted.

Shares of money market funds are $1 par. A share is valued at $1. Earnings paid in shares are all at $1/share except when the dollar is busted. This fund reported their money market funds valued at $.97 a share.

These worries have the potential for panic like the run on the banks back in the late 1920s and early 1930s. So maybe it is vital that the government bail out the financial institutions.

I am bothered by the lack of transparency. Who knows what's been really going on? President Bush called for an investigation into F. Mae and F. Mac back in 2003 but it never happened. Evidently the underlying problems have been festering for years.

Greed and power. The government demanded that more mortgage $ be available to the low income families. In fact one place said what was once 5% of mortgages was changed to 20%. This was dictated by the Dems in the 1990s and reinforced during George W.'s first term.

This triggered home financing with little or no down payments and little or no credit history or even income records. Some mortgages were obtain without tax records or even a W2.

Subprime. Zero down. Interest only. Taking equity out and refinancing. All terms used more commonly in the last 15 years. Mortgage rates were low. Housing saw huge increases. More banks and lenders wanted a piece of the pie. Creative financing.

Maybe it was all doomed. A house of mortgage papers only. No real equity. No real value.

Then the cracks began. The banks did not want to foreclose and take back ownership of houses that were worth less than the loan balances. People who were "given" a piece of the American dream were shocked and outraged that it was taken away.

Who won in all this? The greedy top men. CEO's salaries and politician's purses. Greed. One of the loud voices crying for subprime mortgages for the underprivileged was Acorn. One of Acorn's community organizers, B.H. Obama, was pushing and pushing for "fairness" and he reaped the benefit of political contributions as well as mortgages for the poor.

The poor lost. The American regular joes are picking up the pieces and are counted as losers. Generations after us will be paying the price. Most of us who will pay for this house of cards had to have 20% down to buy our homes and tax returns for the last few years and proof of insurance and a credit rating that was more than healthy.

In the end, we did not help the poor. In fact, there will be less and less aid $ and charity $ because regular joes will be paying higher taxes, paying for social security they will never enjoy, and living under the socialist President B. Husein Obama. Democracy will give way to socialism.

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Prediction

Now that "We The People" own a huge insurance company and we back up most of the mortgages in US, I predict the government will be printing more $.

So? Our green backs were at one time backed by precious metals. Silver but mostly gold. The gold standard gave value to our printed bucks.

No longer is our money backed by world standards like gold. Our money is backed by our good name only.

The more money printed, the less value in each bill.

The American dollar will be worth less and less. It hasn't been strong in the last few years but I predict it will take two American dollars to buy a Canadian dollar's worth of goods. Not a good thing.

Also, the value of our homes and other real estate will decline even further. It's time to change Washington and elect McCain/Palin. Obama took over $80 million from Fannie Mae/Freddie Mac which has been run by some of his Democrat cronies over the last decade.

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Fight Is On!

Bob and I are on the road in Indiana. This must be a state "on the fence" because the Obama and McCain ads are all over the place. I have to duck to avoid getting hit with the mud they are slinging.

It is getting ugly. I sense Obama is reacting as if he's sensing McCain gaining and it scares him. I think he thought it would be a cake walk to November after he eliminated Hillary Rodham.

I hear both camps saying that the government should safeguard us from all these financial failures. More government. More bail outs. Since when has the government done anything more efficiently or cheaper than private business?

Why are they not pointing fingers at Congress and Clinton who back in 1999 decided money had to loosened up so everyone could afford a house. Looser money was mandated by the government. So, the government set this up. The government follows that with throwing our (we the people) money at it.

Are we self destructing from inside? Who wins then?

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Rates Change?

The Feds meet today. Will what happened in the market yesterday and the concerns about AIG and other insurance/banking giants affect their decision? Will they lower rates again? How much?

How low can they go?

Who is watching and regulating the insurance and banking industries? Are balance sheets released to these governing bodies? Is there creative accounting going on like we learned about at Enron?

Economics is a science and a complicated one.

Today I have more questions than ever. It's difficult to sift through to the truth with all the political mud slinging going on. The finger pointing and the blaming are not helpful.

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Bail Outs

The government has been bailing out businesses for decades. Do you remember the bailout of Chrysler? The bailout that created AmTrak? Nixon bailed out some jet maker in the 70s. There were the savings and loads back under George Bush the elder.

Many talking heads recently have, with the clear 20/20 vision of hindsight, declared that Fannie Mae and Freddie Mac were doomed from the beginning. They say the mix of government guarantees and private stock ownership was doomed.

Now we are all watching large banking interests. There are a few who hold large amounts of bad "paper." They have made bad loans and may never recover from the write offs.

I suspect the market will take another hold and wait and see attitude. Lehman Brothers may be going under. I will hold on and wait myself.

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Red Cross

Watching the destruction in Texas yesterday on the news and having watched similar havoc in Louisiana just days before, I felt moved to contribute.

The Red Cross reported that week that they had to borrow funds to cover the $8 or $9 million they estimated they would send in aid to Louisiana. I'm sure they will need more than that to cover for Ike's damage.

It's easy to contribute. Just visit redcross.org. Donations are tax deductible for those who itemize on their tax returns.

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Gas Costs Rising

Hurricanes have battered the Gulf of Mexico in the last 2 weeks. We will soon feel their hit at the gas pumps. Refineries and drilling have been interrupted at best. An assessment following Ike's hit over night will better detail the damages wrought.

While in Indiana and central Illinois earlier this week, Bob and I saw gas at $3.52 a gallon. By the time we got home, the prices here were over $4. I'm not sure what the differences are, if they are taxes or refining specifications.

Meanwhile, our monthly Visa statement has arrived. We spent just under $400 at the pump last month! So we've decided no eating out this month.

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Another Payment

Your third payment toward your 2008 tax liability is due September 15. Your payment must be postmarked on or before Monday.

For those who are self employed and/or remit to the government outside of withholdings on payroll checks or investments, they are required to make 4 tax payments to cover their liability.

After working 3 months, the first payment is due 4/15. Then after working April and May, another payment is due 6/15. Then after three more months of earnings, a payment is due 9/15. Then after working September, October, November, and December, the final tax payment is due January 15 of the following year.

Most Americans have taxes withheld from each paycheck so the flow is even over the year and tied directly to earned income. Some Americans who are retired and/or have investments that create income make these four tax payments over the calendar year.

Just a reminder that Uncle Sam (and most states) want their cut of your last 3 month's of income on Monday. Then they'll let your work for 4 months before demanding their cut just weeks after Christmas.

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Bombed

We were bombed. Attacked. Very much like Pearl Harbor.

It was not an incident. It was not a tragedy. It was not a day that will soon be forgotten.

There are some who discount the bombings. There are websites that claim it was a US conspiracy.

No. We were bombed. War was declared on us. On us. We are not the aggressors. We were attacked that December morning in Pearl Harbor. We were attacked that September morning in New York, Pennsylvania, and Washington DC.

The war goes on. We need to prevail. The enemy must be squelched. We must win this war.

As things are "remembered" today, let us not forget that war was declared on us. We were bombed.

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More Federal Deficit

Sunday the US government (we the people) took over Fannie Mae and Freddie Mac. They were established in 1938 and 1970 respectively and were always touted as "too big to fail". Sunday's action was the desperate action to avoid failure of the corporations (yes, privately held) who carry and hold private debts - mostly home mortgages.

"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe," said Treasury Secretary Henry Paulson. "A failure would affect the ability of Americans to get home loans, auto loans and other consumer credit and business finance."

The officers who ran these corps are out and the feds are in control. They are expected to clean house - reduce the number of employees. We can guess that as efficient as the government does things, they will soon have more employees on payroll soon. On the federal payroll. There are probably very nice benefits with those jobs.

They, the feds, will have easy access to federal funds in an effort to stay afloat and continue to back and lend. This will keep rates quite low - possibly artificially low. This action will save the housing market from disaster including contractors, building supply companies, REITS, and realtors.

Check your mutual fund holdings. Chances are you like us hold some stock from these giants. Dividends to shareholders are suspended. And if losses continue, common shareholders, in two of the most widely held stocks in the United States, could find their stock worthless. However, holders of Fannie Mae and Freddie Mac mortgage securities and other debt will be paid in full.

The Treasury Department will buy up to $100 billion in preferred stock from each of the companies to ensure they have capital and are able to pay off their private debt. Preferred stocks are a step above common stock.

In the case of a corporation going bankrupt, debtors are satisfied first and then leftovers go to preferred stock holders and lastly to common stock holders.

I believe we the people will get the biggest hit having to carry and eventually pass on to our children this huge federal debt plus we may personally take a hit soon in our investments.

Will we get thank you cards from the housing industry? Mortgage holders?

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Community Organizer

B. H. Obama has a slip resume. He taught law - well, exactly what he taught hasn't come to light yet. But before he was elected to state legislation he was a community organizer. On Friday Investors Business Daily ran an article looking at his experience organizing and the organizations that paid him. I found the article interesting. I know more about what the very very junior senator stands for.

"Let me clarify something. Nobody is mocking community organizers in church basements and community centers across the country working to improve their neighbors' lives. What deserves ridicule is the notion that Obama's brief stint as a South Side rabble-rouser for tax-subsidized, partisan nonprofits qualifies as executive experience you can believe in.
What deserves derision is "community organizing" that relies on a community of homeless people and ex-cons to organize for the purpose of registering dead people to vote, shaking down corporations and using the race card as a bludgeon.
Obama's community organizing days involved training grievance-mongers from the far-left ACORN (Association of Community Organizations for Reform Now). The ACORN mob is infamous for its bully tactics (which they dub "direct actions"); Obama supporters have recounted his role in organizing an ambush on a government planning meeting about a landfill project opposed by Chicago's minority lobbies.
With benefactors like Obama in office, ACORN has milked nearly four decades of government subsidies to prop up chapters that promote the welfare state and undermine the free market, as well as some that have been implicated in perpetuating illegal immigration and voter fraud.
The group continues to garner scrutiny from law enforcement.
Last week, Milwaukee's top election official announced plans to seek criminal investigations of 37 ACORN employees accused of offering gifts to sign up voters (including prepaid gas cards and restaurant cards) or falsifying driver's license numbers, Social Security numbers or other information on voter registration cards.
Last month, a New Mexico TV station reported on the child rapists, drug offenders and forgery convicts on ACORN's payroll. In July, Pennsylvania investigators asked the public for help in locating a fugitive named Luis R. Torres-Serrano, who is accused "of submitting more than 100 fraudulent voter registration forms he collected on behalf of the Association of Community Organizations for Reform Now to county election officials." Also in July, a massive, nearly $1 million embezzlement scheme by top ACORN officials was exposed.
ACORN's political arm endorsed Obama in February and has ramped up efforts to register voters across the country. Meantime, completely ignored by the mainstream commentariat and clean-election crusaders, the Obama campaign admitted failing to report $800,000 in campaign payments to ACORN. They were disguised as payments to a front group called "Citizen Services Inc." for "advance work."
Jim Terry, an official from the Consumer Rights League, a watchdog group that monitors ACORN, noted: "ACORN has a long and sordid history of employing convoluted Enron-style accounting to illegally use taxpayer funds for their own political gain.
"Now it looks like ACORN is using the same type of convoluted accounting scheme for Obama's political gain." With a wave of his magic wand, Obama amended his Federal Election Commission forms to change the "advance work" to "get-out-the-vote" work.
Now, don't you dare challenge his commitment to following tax and election laws. And don't you even think of entertaining the possibility that The One exploited a nonprofit supposedly focused on helping low-income people for political gain. He was just "organizing" his "community."

I'm thinking more about this man's "work" and his work ethic will come out. I'm wondering when his affiliation with Bill Ayres will emerge and why we haven't heard more about how he was indicated in the Tony Rezco trial. This man is blanket and protected from the spot light. A true messiah would stand in the light.

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Stock Market GPS

Where is the market headed? Too much southern action for our portfolio.

Some indicators are positive and gas has remained less than $4 for a few weeks and yet things are loosing value. Even our bonds are slipping.

I'm hearing mixed messages from the talking heads. Some say "things are shaking out", "businesses are slimming down", "fuel costs are the culprit", and "small businesses are not hiring".

I am not smart enough to understand it all. Maybe it's tied to politics. I do know the market is fickle, easily influenced. I still believe there's great potential and we are holding our positions.

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WalMart Scripts

Bob has new prescriptions for the medications he takes for high blood pressure and high cholesterol. We have a drug plan through his retirement along with medical coverage that costs us about $5,000 per year with a $1,500 per person deductible.

It costs us over $300 for a 90-day of both medications supply through the mail. He mentioned this fact to the doctor last week and she suggested he try WalMart.

So he drove out near the mall and dropped off his 'scripts. When he picked them up, the pharmacist said if WalMart submitted these to our drug plan, it would be less than through the mail to MedCo; however, if Bob was willing to pay cash it would be far less than that.

Bob paid $10 for each 90-day supply of his meds! $20 for what used to cost us over $300. Thank you, WalMart.

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News or Opinion?

Friday upon McCain's announcement and introduction of Sarah Palin has his running mate, MSNBC broadcast this "breaking news" with what can only be identified as an editorial comment. Can you convince me that this station is not run by the DNC?

Journalism, editorials, facts, fiction, opinion. Do you not just want the facts when tuning into a news station like MSNBC, CNN, Fox News, etc.?

Just the facts. Leave the opinion to me. Does anyone else see this and other commentary-ridden news broadcasts as unevenly liberal? And yet there's a push for the fairness act where every venue will need to provide equal time to both sides of an issue. Is there fair time on the "breaking news" at MSNBC?

Note: This picture was provided via Fox News as reported on O'Reilly's show.

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Labor Day

The U.S. Department of Labor says this about the holiday we are observing today:

"Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

More than 100 years after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers."

These days the holiday marks the end of summer. Many school districts begin classes for the new year tomorrow. This last 3-day weekend of the summer brings many out on the roads, off to community events, or grilling in the back yard.

However you mark this day off work, let it be relaxing, refreshing, and safe.

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