NC State, that is.
We in North Carolina are blessed to have several Division I colleges who have enjoyed a great deal of success on the field and in the arena, for many years. One does not have to look far for a school to pull for any given Saturday afternoon, or winter evening when roundball season is underway.
When I was a kid, NC State was enjoying a great deal of success, and me and several of my friends became fans of players like Thompson, Towe, Burleson, and a coach named Sloan. Later when I was in high school, a crazy Italian coach with more ties to New York than Tobacco Road led a bunch of role players all the way to victory in the NCAA tournament, over a team from Houston that included two future NBA hall of famers. It was the stuff dreams are made of.
The last several years have been lean for State's big time sports programs, that is until today. The Chancellor, of all people, hit the equivalent of a three point shot when the chips were down, to score a victory for all of us!
In case you are not from North Carolina, and or do not follow politics like it was sport, let me fill you in: Several months ago the First Lady of North Carolina, Mary Easley, was awarded a $170,000 a year job a NC State. Her husband, the governor, was on his way out, having enjoyed his two terms as NC governor with such perks as tax payer paid trips to Italy and Europe, and, a personal real estate deal on the coast, in which he paid a price for a water front lot which was well below tax value, and well below what the people on either side of him paid for theirs. The posting, search, and hiring process for the job the First Lady filled was not handled exactly the way policy requires. The First Lady's job appeared to be a clear case of political pandering.
Fortunately for us the tax payers and other fans of doing the right thing, several newspapers have not let go of this story. Helping fuel their fire has been rumors, now confirmed, that the ex-governor is now under a Federal grand jury probe for multiple irregularities. My hunch is he will be ultimately convicted of tax evasion for the benefit of free travel, but that is a long way out.
Anyway, the newspapers are actually doing their job on this one, and last week two people, not one but two people close to this situation resigned from their taxpayer supported positions as a result of the Mary Easley hiring. The individual who hired Mary Easley resigned, and, the chairman of the NCSU Board of Trustees also resigned.
Those are two resignations that should proably have happened, but we are at least one resignation short: Mary Easley's. In a move that I and I'm sure others cheer today, the Chancellor of the university, James Oblinger, called for Mary Easley to resign, "in the best interest of the University". Way to go James, score one for State, and those of us who are paying the bills!
Look, I do not have a thing against Mary Easley. Maybe she was the best candidate for that job (she actually was the best candidate, since they didn't post it which made her the ONLY candidate!). Seriously, she should resign. If the position is actually necessary, and is going to be filled, let her post along with everyone else who might want a $170k a year state job with benefits.
If you think the Chancellor did the right thing today, do a favor and let him know with an email, or a call to his office. I'm sure the information to do that is on NC State's web site. When people in politics do the right thing, and the Chancellor's position at a major university is certainly a political position, we need to let them know we appreciate it.
Monday, May 18, 2009
Saturday, May 9, 2009
The Scam of the Century, which you probably won't read about in your newspaper
Scam: "a confidence game or other fraudulent scheme, esp. for making a quick profit; swindle" (dictionary.com).
To understand a scam, you have to be willing to connect the dots. You know, you have to be willing to trust your judgment, and add 2 and 2 and 2 and 2 and 2 to get 10, without someone telling you ahead of time 10 is the answer. YOU have to come up with the answer, and trust what you see, not what you are told. By the time conventional wisdom has come to the conclusion the answer is 10, the scam is long since over, and conventional wisdom lost.
OK here comes the first "2" in the Scam of the Century. The term 'bailout' has become synonymous with the TARP program in the media lately. That is really not the correct term, but it sells copy. TARP stands for Troubled Asset Repurchase Program, and simply put, it was designed, in the final days of the Bush administration, to purchase bad loans from banks. Why do that? Because when banks have a bad loans, it becomes more difficult from a regulatory as well as functional standpoint to lend money. Our economy is fueled by credit. So if banks can not or will not lend, that is potentially very bad for our economy.
As the Bush's were packing boxes, and the Obama's were pulling in with the Mayflower truck behind them, someone, I do not know who, decided rather than buy bad loans, which sounds fairly unappealing, to use TARP money to buy preferred stock in the banks who are hurting for capital. And that is what they did. The federal government has purchased billions of dollars worth of stock in mostly the largest US banks. Those of us in the audience who do not blindly trust an organization as large as the US government, were OK with this program, because the stock the government purchased is of a class that does not vote. Bush went on TV before he left to describe this. The government's money was in, but it was silent.
Here's the next "2". Several weeks ago the Feds (read, the current presidential administration) announced new "stress" tests for the banks which have taken TARP money. These were announced under the guise of protecting the American people. This seemed odd to everyone in the banking industry, because banks are already heavily regulated and tested for soundness. Considered on its own, the stress tests made no sense.
The next "2" is the feds alone decided what the components of the stress test would be. No industry input. This allowed the feds to in essence decide which banks need new capital, and how much. Keep in mind, the feds make the rules for the banks. If a bank does not meet those rules, it can be shut down overnight, with no warning.
The next "2" is results were announced recently for the stress tests, and all the biggest banks were deemed to have inadequate capital for a hypothetically created extended recession. Imagine that. All these banks were told to add capital, or else Uncle Sam is going to take over.
Ok here is the final "2", which gets us to 10. One of the ways the feds said the banks could add capital, is by converting the Preferred Stock the feds recently purchased with TARP money, in to Common Stock. This is significant because Preferred Stock does not vote, Common Stock does. If the fed's shares are converted to Common, they immediately become the largest shareholder; they own that bank. This is what Obama and many in Washington want. This makes government bigger, much bigger.
Not convinced this is a Scam yet? Well here is the dead giveaway: If you convert Preferred Stock to Common Stock, how much money does that add to the balance sheet of a bank? I mean, the government is going through all these steps for the sole purpose of making sure banks are sound and have enough capital, right? Wrong. The answer is zero. Converting Preferred to Common is like converting green dollars in to silver dollars. It adds zero new capital, zero new money to a bank's balance sheet. For accounting purposes only, Common Stock counts as capital, Preferred does not. This game has been in the works since Obama was elected. Its only now become visible, and unfortunately, to only a few who are awake and love liberty.
The feds now own Chrysler, they took it over in a similar Scam to this, and gave it to their best friends forever the unions. They now own Citibank, because Citi agreed to convert the fed's preferred shared to common. Is your company next? Is your industry next? Wake up. Trust what you see not what you are told. Contact your local Totalitarian in Washington, and tell him or her enough is enough, before it is too late.
To understand a scam, you have to be willing to connect the dots. You know, you have to be willing to trust your judgment, and add 2 and 2 and 2 and 2 and 2 to get 10, without someone telling you ahead of time 10 is the answer. YOU have to come up with the answer, and trust what you see, not what you are told. By the time conventional wisdom has come to the conclusion the answer is 10, the scam is long since over, and conventional wisdom lost.
OK here comes the first "2" in the Scam of the Century. The term 'bailout' has become synonymous with the TARP program in the media lately. That is really not the correct term, but it sells copy. TARP stands for Troubled Asset Repurchase Program, and simply put, it was designed, in the final days of the Bush administration, to purchase bad loans from banks. Why do that? Because when banks have a bad loans, it becomes more difficult from a regulatory as well as functional standpoint to lend money. Our economy is fueled by credit. So if banks can not or will not lend, that is potentially very bad for our economy.
As the Bush's were packing boxes, and the Obama's were pulling in with the Mayflower truck behind them, someone, I do not know who, decided rather than buy bad loans, which sounds fairly unappealing, to use TARP money to buy preferred stock in the banks who are hurting for capital. And that is what they did. The federal government has purchased billions of dollars worth of stock in mostly the largest US banks. Those of us in the audience who do not blindly trust an organization as large as the US government, were OK with this program, because the stock the government purchased is of a class that does not vote. Bush went on TV before he left to describe this. The government's money was in, but it was silent.
Here's the next "2". Several weeks ago the Feds (read, the current presidential administration) announced new "stress" tests for the banks which have taken TARP money. These were announced under the guise of protecting the American people. This seemed odd to everyone in the banking industry, because banks are already heavily regulated and tested for soundness. Considered on its own, the stress tests made no sense.
The next "2" is the feds alone decided what the components of the stress test would be. No industry input. This allowed the feds to in essence decide which banks need new capital, and how much. Keep in mind, the feds make the rules for the banks. If a bank does not meet those rules, it can be shut down overnight, with no warning.
The next "2" is results were announced recently for the stress tests, and all the biggest banks were deemed to have inadequate capital for a hypothetically created extended recession. Imagine that. All these banks were told to add capital, or else Uncle Sam is going to take over.
Ok here is the final "2", which gets us to 10. One of the ways the feds said the banks could add capital, is by converting the Preferred Stock the feds recently purchased with TARP money, in to Common Stock. This is significant because Preferred Stock does not vote, Common Stock does. If the fed's shares are converted to Common, they immediately become the largest shareholder; they own that bank. This is what Obama and many in Washington want. This makes government bigger, much bigger.
Not convinced this is a Scam yet? Well here is the dead giveaway: If you convert Preferred Stock to Common Stock, how much money does that add to the balance sheet of a bank? I mean, the government is going through all these steps for the sole purpose of making sure banks are sound and have enough capital, right? Wrong. The answer is zero. Converting Preferred to Common is like converting green dollars in to silver dollars. It adds zero new capital, zero new money to a bank's balance sheet. For accounting purposes only, Common Stock counts as capital, Preferred does not. This game has been in the works since Obama was elected. Its only now become visible, and unfortunately, to only a few who are awake and love liberty.
The feds now own Chrysler, they took it over in a similar Scam to this, and gave it to their best friends forever the unions. They now own Citibank, because Citi agreed to convert the fed's preferred shared to common. Is your company next? Is your industry next? Wake up. Trust what you see not what you are told. Contact your local Totalitarian in Washington, and tell him or her enough is enough, before it is too late.
Wednesday, May 6, 2009
Who is naïve, you or Obama?
Yesterday Sir Taxalot (aka B Hussein Obama) announced a plan to "save" you and me, the American tax payer, over $200 billion over the course of the next 10 years, by raising taxes on certain companies who are participating in legally avoiding taxes. $200 billion over 10 years is $20 billion a year according to my public education math. Let's all be thankful our President, who in the past 100 days has spent trillions more dollars than his predecessors ever thought about, wants to save us $20 billion a year. Be still my beating heart.
By the way, $20 billion a year will almost, almost, cover the interest expense on his $750 billion porkulus, err stimulus plan. The annual interest bill for that, assuming 4% interest, is $30 billion. A year. Every year. For a long time.
$20 billion a year is the approximate amount of my state's, North Carolina's, annual budget. It is hard to believe that the interest expense on only a portion of this president's deficit spending is larger than my state's budget. I hope that helps you understand the size of some of these numbers, and how hard it is going to be to pay all this debt off.
Maybe you are OK with this. Possibly you like seeing large companies having their tax loopholes closed. Its very popular in Washington and with the press to attack big companies and tax loopholes. By the way, do you deduct home mortgage interest on YOUR tax return? Do you deduct for charitable donations, for medical expenses, for education expenses? If you do, then you are engaging in the same kind of "loophole" participation these big companies are. Does that change the way you look at this?
What Sir Taxalot either does not know, or thinks you do not know, is that those companies he is raising taxes on are not going to just sit there an say OK, we're glad to pay more taxes. No, they will either cut jobs, or raise the price of their products, or both, in order to help fund as much of those tax increases as they can, without hurting their bottom line. Either he is naive, or he is playing you for a sucker, thinking he can continue to divide us in to groups who hate, or at least don't much like, each other. He is not "saving" you anything, he is costing you something.
This is a very calculating, but misguided, man. He knows exactly what he is doing. He is increasing the size of government by raising taxes. That is his #1 objective, make no doubt about that. He is attempting to punish companies who move jobs oversees. He is doing that to potentionally help his best friends, the unions. If that is not his #2 objective, its close. Finally, he is continuing to attempt to exploit what he sees as a naive US population, by hoping you do not realize tax increases on companies eventually cost you, the customer, in the form of higher prices. Don't be a sucker. And don't forget.
By the way, $20 billion a year will almost, almost, cover the interest expense on his $750 billion porkulus, err stimulus plan. The annual interest bill for that, assuming 4% interest, is $30 billion. A year. Every year. For a long time.
$20 billion a year is the approximate amount of my state's, North Carolina's, annual budget. It is hard to believe that the interest expense on only a portion of this president's deficit spending is larger than my state's budget. I hope that helps you understand the size of some of these numbers, and how hard it is going to be to pay all this debt off.
Maybe you are OK with this. Possibly you like seeing large companies having their tax loopholes closed. Its very popular in Washington and with the press to attack big companies and tax loopholes. By the way, do you deduct home mortgage interest on YOUR tax return? Do you deduct for charitable donations, for medical expenses, for education expenses? If you do, then you are engaging in the same kind of "loophole" participation these big companies are. Does that change the way you look at this?
What Sir Taxalot either does not know, or thinks you do not know, is that those companies he is raising taxes on are not going to just sit there an say OK, we're glad to pay more taxes. No, they will either cut jobs, or raise the price of their products, or both, in order to help fund as much of those tax increases as they can, without hurting their bottom line. Either he is naive, or he is playing you for a sucker, thinking he can continue to divide us in to groups who hate, or at least don't much like, each other. He is not "saving" you anything, he is costing you something.
This is a very calculating, but misguided, man. He knows exactly what he is doing. He is increasing the size of government by raising taxes. That is his #1 objective, make no doubt about that. He is attempting to punish companies who move jobs oversees. He is doing that to potentionally help his best friends, the unions. If that is not his #2 objective, its close. Finally, he is continuing to attempt to exploit what he sees as a naive US population, by hoping you do not realize tax increases on companies eventually cost you, the customer, in the form of higher prices. Don't be a sucker. And don't forget.
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