Democrat, Republican, Conservative, Liberal, it doesn’t matter. On a day when oil prices rocketed to $140 a barrel based purely on speculation of future oil prices it is time to let your Congressmen know how you feel about this issue. You can guarantee I will be sending out some letters tonight.
WASHINGTON (MarketWatch) — The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.
Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.
Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters’ assessment at a hearing on proposed legislation to limit speculation in futures markets.
Last week we saw McCain, Clinton and Obama all speak before AIPAC (American Israeli Public Affairs Committee). As a Presidential candidate, no matter your true feelings about Israel, it is imperative to have the Jewish lobby on your side. It is very similar to the fact you must proclaim to be Christian to be President of the United States (or hold significant office anywhere in the US). So there they were, all three, telling the group before them their intent to protect Israel. Even Obama promised to maintain Jerusalem in Israeli hands, an issue the Palestinians (and all Muslims) have a tough time swallowing. Jerusalem is, after all, the third most holy place in Islam. I have always contended that our marriage with Israel is bad foreign policy. By no means do I believe we should abandon the Jewish nation, but our overt support of the state over the Palestinians makes us less safe. Other than regional intelligence provided by MOSAD (the Israeli version of the CIA) Israel doesn’t offer much in the way of a strategic advantage for our support.
The danger of our commitment can easily be seen with what happened on Friday. Friday was a nexus of events and history that renders it significant. First off Friday was June 6th and for anyone who is worth their salt knows the day has historical relevance. June 6th was D-Day, the date the Allies stormed the beaches of Normandy in 1944 which began the liberation of Western Europe. D-Day is perhaps a pertinent phrase for what happened in terms of the economy yesterday. I’ll let Steely Dan provide some appropriate background music.
Yesterday could be labeled a nouveau Black Friday. Gas prices shot up $10 per barrel on Friday in the wake of a $6 increase the day before as the price topped $138 at the end of trading Friday. This sent the stock market tumbling 400 points. What caused these events?
This leaves us with a couple questions. First, what would be the results of an Israeli attack on Iran? And second, why are we, the most powerful nation on the planet, in a position where a second rate Israeli minister can affect the US economy in such a way?
These days, a true patriot drives a small car. Current gas prices are now making this not just an option but a necessity.
"I don’t need this much space," McHugh said of his SUV. "It just seems ridiculous."
——Did it take a spike in gas prices to realize this?
Frustrated Owners Try to Unload Their Guzzlers
—Boston Globe—
After paying $75 to fill his black Dodge Ram pickup truck for the third time in a week, Douglas Chrystall couldn’t take it anymore.
Feeling pinched at the pump, and guilty as well, Chrystall, a 39-year-old father from Wellesley, is putting ads online to sell the truck, and the family’s other gas-guzzler, a Jeep Grand Cherokee. He knows it will be tough to unload them because he is one of a growing number of consumers downsizing to smaller, more fuel-efficient cars.
Americans are turning away from the boxy, four-wheel-drive vehicles that have for years dominated the nation’s highways. Sport utility vehicles and pickup trucks - symbols of Americans’ obsession with horsepower, size, and status - are falling out of favor as consumers rich and poor encounter sticker shock at the pump, paying upward of $80 to fill gas tanks.
This part of my blog appeared before under “Burning Sage” but after realizing that Jim Rome has a TV show entitled Rome is Burning I decided to change it. I can’t stand Jim Rome. Also, I like the title Raging Sage better.
Worthless Degree
The country is most likely in a recession. The components of today’s financial mess are complicated. From the mounting debt which has devalued the dollar to the mortgage crisis which has caused Wall Street to retreat. Of course this is just a quick summary but what is interesting and most people aren’t talking about is the fact that our current President holds an MBA from Harvard Business School. Not only has this MBA recipient done little to forestall the recession he has failed to articulate the nature of the woes to the nation. I wonder how drunk Bush actually was during his years at Harvard. Here is a list of classes that one is required to take at HBS along with the list of electives:
Sounds like Hillary might just know what it is like to be poor in America after all. It seems her campaign is stiffing some on the trail. How do you recover your money when the person that owes it to you is never in one place for more than two days? Will this affect her FICO score? For some reason I think not. The big question , however, does Hillary have to stay in the race to acquire enough money to pay off her campaign debts?
Why are Republican Congressmen hindering witnesses in the latest hearings on credit card abuse? Representative Carolyn Maloney (D-NY) has proposed a bill that would protect credit card holders from their interest rates skyrocketing for the slightest infractions. Several consumers who have had their interest rates go from a fair rate to 23% overnight due to one late payment had agreed to testify before Congress. Republicans found a way to silence many of these witnesses. The panel’s Republicans insisted the visitors allow their lenders to discuss their financial histories publicly-in any forum, at any time. This did the trick for four of five witnesses who were fearful of the one part in the waiver that would allow their history to be fair game at anytime. The credit card companies and their lobbyists were there in huge numbers during Thursday’s hearings espousing the virtues of their consumer relations while the those who had been unfairly treated sat in the audience, successfully gagged.
Maloney’s proposal, called The Credit Card Holder Bill of Rights serves as a check on the companies that give out credit cards. Their power has become increasingly one sided in the past ten years. This should be a signal to everyone just who the Republicans cater to, and it isn’t us.
If you haven’t seen the Frontline special on the abuses of credit card issuers see it here. It is an outstanding piece of journalism.
For more on the Credit Card Holder Bill of Rights (HR 5244):
The free world community made a big mistake when they agreed without reservation to allow Beijing to hold the 2008 summer games. If China wishes to be an equal economic partner they must play fair. China’s currency is artificially deflated to the tune of 40%. The reality is China’s fiscal policy is not only hurting the United States, the European Community is also deeply affected by it. In 2006, the EU imported 191 billion Euros from China and exported 63 billion Euros and the deficit is trending upward. Not only is China undervaluing its currency but they are also pursuing protectionist policies to prevent foreign nations from selling certain products within China. The current dilemma, however, is how to go about punishing China for practicing unfair trade. The logical solution would be to simply place a tariff on imported Chinese goods, say 40%, which would decline in kind with the revaluation of the Yuan. The problem is many Western companies have moved their factories overseas to take advantage of kinder profit margins. To impose a tariff would hurt these companies. So what, you say. They are traitors anyway, right? Well, many Americans own these companies’ stocks and such punitive measures would cause a ripple through the market. Even if we were prepared to aggressively go after the unequal trade situation, lobby groups would push back hard against such laws. The one area where the West could start to show how serious we are about the situation would have been to stop the Olympics from going to China until fair trade was a reality. Too late now. As we continue to hoard goods on our walls, in our kitchen cabinets, on our feet and in our clothes closet it should not be lost that most carry the label “made in China”. There is no doubt the movement of manufacturing jobs began with adjustment by Walmart to go from their famous slogan of the early 1980s “Made in America” to one in which nearly every product sold there today is made in China. Some say the natural byproduct of globalization is the transfer of manufacturing jobs. I’m fine with that as long as everyone is playing by the same rules.
For a good analysis of Walmart’s role in the loss of manufacturing jobs watch PBS’ Frontline special online: Is Walmart Good For America?
For the past several years there was always the looming question, “How can people afford all these large houses that are going up everywhere?” The answer always were in the form of a shrug of the shoulders. Now we are finding out the real answer. They couldn’t afford these houses.
When I moved into my current home, the house to my south was owned by a napoleonic fireman and his wife who were very good homeowners. He didn’t care much for living here but was required by his job to live in the city limits. So he found a lot on the fringe of the city and staked his claim. About five years ago he retired and moved away. The next owner was a thirty-something with a wild streak and a girl friend in tow. She apparently didn’t care all that much for his wild streak and left him. It wasn’t long after that he foreclosed on his home and the home lay dormant. Last summer a house speculator, obviously inspired by all those flipping houses shows, bought up the property and put it on the market hoping to make a quick buck. But unfortunately the housing collapse emerged in the middle of his gambit. The house never sold. He brought in contractors to try to inspire buyers but the buyers weren’t inspired. The for-sale-by-owner sign was replaced by a realtor sign which was replaced by a renter sign. A couple weeks ago three twenty-somethings moved in. We know when they are returning from jobs by the boom booms emitting from vehicles. The housing crisis has come home to roost on the edge of my lawn.
Economists say so much can be discerned by the number of new housing starts. These indicators are linked to such things as employment, to retail sales, to the success of large box home improvement chains. The current mortgage disaster is a foreteller of bad things on all counts. The job of government is to protect homeowners from such practices as predatory lending and they have failed dismally. The impact this will have on the future of the US economy may stretch beyond just an ordinary cyclical recession. The unintended consequences of the government not intervening in bad economic policy will be just one more legacy of the Bush Administration. Now I’m forced to live with idiots next door and idiots in the White House.
Anyone who watched the Dems debate tonight will quickly understand why it is difficult becoming the president from Congress. Defending votes in the legislative branch is like grabbing and holding sand. You can make a hundred great votes but it is that one you regret that gets you. The sharp exchanges by Hillary and Barack were entertaining and I for one liked to see them. The depth of the dialogue is more detailed than you see in the Republican debates. The one issue where the Democrats are wrong is Iraq. They are not capable of altering their position with what is transpiring on the ground. Granted, Iraq is a difficult issue because George Bush has made it so. The course of the war has taken turns that are unpredictable because Iraq has proven inconsistent. Pulling troops out now would be folly. If the situation takes a turn toward chaos then it will be time to leave but it is time to make hay as the sun shines, as they say; and the Democratic candidates need to be pragmatic. Pragmatism is a liberal virtue and they should not shy away from that strength now. When they debated Iraq tonight their stances seemed dated.
Another aspect of the debate this evening was how much this election season is so much unlike the 2004 campaign. Most people coming into this election believed it would be Iraq that would frame the race. This campaign will be about the economy. As I write this we have seen foreign markets lose between 5% and 7% of their value in a single day of trading (a seven percent drop in our stock market would be about 900 points). When the markets open tomorrow there could be dramatic sell-offs. Most experts believe that we have been in recession since December. Whereas the 04 election was a referendum on Iraq this election will be about the economy and I don’t believe it is one the Republicans can win. If McCain captures the GOP nomination where will his acumen to resolve financial matters come from. In fact most Republicans want to keep the debate in the realm of national security. The Republicans on national security, like the Democrats on Iraq, haven’t moved with the times. So as the day progresses tomorrow and we watch as the stock market reacts, we will see if the candidates campaigns move with it or continue to talk as if the topics of yesterday are still the most important issues. Many have talked about change. Well, we will see if they are in fact “change” candidates.
When I was a kid if we didn’t eat all the food on our plate our parents would say, “Don’t you know there are people in China that are starving.” That doesn’t apply much anymore.
How much do you think you know about the world? On this Christmas Eve I’m going to start out with a quiz. For each pair tell which nation has the highest infant mortality rate.
Sri Lanka or Turkey
Poland or South Korea
Malaysia or Russia
Pakistan or Vietnam
Thailand or South Africa
Professor Hans Roslings will give you the answers in a fascinating speech about the changes occurring in the developing world. It is about 20 minutes long and divides the Third World into winners and losers. It culminates in a graph that compares the US and China and tells us what we know is transpiring, except in graph form it seems more menacing.
When I teach I often tell my students how national, even international, situations often mirror what occurs with the individual. No clearer case can be made than with the debt. The national debt roared past $9 trillion and the runaway spending continues without check. In essence, the federal government is using its credit card. The sad reality is Americans are choosing to spend like the government is spending, by pulling out the plastic. For the first time since the Great Depression, Americans have a negative savings rate. Credit card debt averages about $10,000 per household today.
(Click the graph to see a larger image)
The federal government continues to struggle with spending. As I mentioned in a prior entry, the debate over the Alternative Minimum Tax (AMT) reveals many in Congress would choose to continue the tax cuts and not require there to be offsets for them. There is also the illusion that the wars overseas are necessary and thus do not need to be balanced with taxes. Just like with those who took out adjustable mortgages in the last half decade, when interest rates are low the debt is manageable but once interest rates rise the result is catastrophic. Such is the case with the national debt. If interest rates rise the amount the government is required to pay rises with it. Making this even more troublesome is the fact that many of our creditors reside overseas and possess forms of government that our current president would rather overthrow than borrow from (if the Neo-con playbook were in force everywhere). Combine all this bad news with the crisis looming over entitlement programs such as medicare, medicaid and social security and it does make for a nasty fiscal cocktail.
Since taking control of Congress, the Democrats are trying to get Republicans to utilize what is known as PayGo, or Pay-as-you-go, on such issues as the AMT relief and the war but the GOP, usually the party of fiscal responsibility, is running away from their mantra for either reasons of political expediency or to endear themselves to corporate sponsors.
These are issues our nation faces as the election nears. It is time for us to get our fiscal situation in order, whether it be personal or national.
Of course this is just a quick summary but what is interesting and most people aren’t talking about is the fact that our current President holds an MBA from Harvard Business School. Not only has this MBA recipient done little to forestall the recession he has failed to articulate the nature of the woes to the nation. I wonder how drunk Bush actually was during his years at Harvard. Here is a list of classes that one is required to take at HBS along with the list of electives: 
The panel’s Republicans insisted the visitors allow their lenders to discuss their financial histories publicly-in any forum, at any time. This did the trick for four of five witnesses who were fearful of the one part in the waiver that would allow their history to be fair game at anytime. The credit card companies and their lobbyists were there in huge numbers during Thursday’s hearings espousing the virtues of their consumer relations while the those who had been unfairly treated sat in the audience, successfully gagged. 
The problem is many Western companies have moved their factories overseas to take advantage of kinder profit margins. To impose a tariff would hurt these companies. So what, you say. They are traitors anyway, right? Well, many Americans own these companies’ stocks and such punitive measures would cause a ripple through the market. Even if we were prepared to aggressively go after the unequal trade situation, 
