Archive for January, 2011

Decline and Fall (Maybe) Jan 31 – Egypt and the False Dilemma

By Michael Collins

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to  petition the Government for a redress of grievances. Image: Cairo, January 2011

The people of Egypt have had enough of a failed dictatorship masquerading as a democracy.  As events unfold, we’re seeing a cautionary message entering the corporate media coverage of this event.  Having never exposed the dire conditions that prompted the massive protests and demands for change, we’re now told that this could negatively impact oil supplies, the stock market, and anti-terror efforts.  No foundation for the claims was provided but they’re repeated regularly on CNN, the NBC’s, Fox, and the print media.

Thus a false dilemma is created for the public:  support the right of people to determine their own fate or protect your safety and the current standard of living, as it were.
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Deadbeats Bush and Gingrich Say “States Better Off Bankrupt”

Michael Collins

Not if a state owes you money!

Jeb Bush and Newt Gingrich just published an OpEd in the Los Angeles Times arguing that states would be wise to consider filing bankruptcy to relieve their financial troubles.  They cite three states, California, Illinois and New York, while failing to mention the angry elephant in the living room with similar problems, Texas.

Texas faces a $25 billion shortfall for a $95 billion two-year budget.  That equals California’s 18-month deficit inherited by the recently inaugurated Governor Jerry Brown.

“So why haven’t we heard more about Texas, one of the most important economy’s in America? Well, it’s because it doesn’t fit the script. It’s a pro-business, lean-spending, no-union state. You can’t fit it into a nice storyline, so it’s ignored,” said Business Insider

Texas is a major inconvenience to Bush and Gingrich. They lay the financial problems at the door of unions and state employee pensions:

“The lucrative pay and benefits packages [read pensions] that government employee unions have received from obliging politicians over the years are perhaps the most significant hurdles for many states trying to restore fiscal health.”  Jeb Bush, Newt Gingrich, January 27

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Appendix: Healthcare Reform – Abandoning the Self Employed

Appendix for

Healthcare Reform – Abandoning the Self Employed

By Michael Collins

I.  Tax breaks to very small business

The tax provisions of the health care act were supposed to help very small businesses afford insurance for their employees.  It appears that the tax breaks will lose their utility about the time that  they expire.  While they offer initial savings, premium increases wipe out the benefits of the tax cut in year three using the 20% per year increase and year four using the 15% premium increase.

From:   Summary of Small Business Health Insurance Tax Credit Under PPACA (P.L. 111-148) Congressional Research Service, April 5, 2010
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Healthcare Reform – Abandoning the Self Employed

Michael Collins

Before it ever arrived at the president’s desk for signature, the health reform act contained a fatal poison pill.

The most creative sector of the business community has a dagger at its heart in the form of the relentless, unyielding, and over burdening cost of health insurance.  The self-employed and very small businesses have seen their insurance premiums climb 20% to 75% since 2009.  To purchase an adequate family plan, a self-employed person will pays an amount 50% to 70% of the nation’s median personal income, $32,000 a year, for family health plan. This includes premiums, deductibles, and out of pocket expenses.  That is twice the cost for relatively generous plans at medium to large size companies.  Very small businesses, two to twenty employees, pay about the same  (Image: Paul Henman)

Wasn’t health reform supposed to take care of just this sort of inequity?  Didn’t the title of the bill say it all?  The Patient Protection and Affordable Health Care Act There is no protection for the self-employed when they have these stark choices facing them due to unaffordable insurance rates.  They can give up working for themselves; buy adequate insurance and take a huge hit to income; buy a substandard plan and hope that whatever comes up is covered; or, abandon insurance at real risk to their health and, in some cases, their lives.
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Talk about a fixed market! Meridith Whitney’s Bond Play – Investigate Now

Michael Collins

Meridith Whitney came out with a shocking story on 60 Minutes called Day of Reckoning 12/19/10 claiming an impending muni bond market meltdown. Never mind that it was rebutted with quick analysis here and elsewhere. It had an effect – Investors have been fleeing municipal bonds. This was a major disruption in the bond market. This is a result of her story – A Guide for Profiting from the Meridith Whitney Muni Meltdown Scenario. The profits and losses from this manufactured news have yet to be fully assessed but l’affaire Whitney has it’s costs to taxpayers.

Here’s a modest proposal. Since Whitney’s prima facia case had major holes in it and since it had such a huge negative impact for some and positive for others, lets have a DOJ, SEC, FTC or special prosecutor investigation of the report, Whitney’s financial connections, those of CBS Corp. and all of its executives to see if the report was intentionally biased.  We might, just might, find out if there is market manipulation going on to benefit fat cats while hundreds of millions who benefit from the mini bond market, the citizens of this country, struggle.

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The Perpetual War

By Numerian

On December 7th of this year – the anniversary of the attack on Pearl Harbor – the United States will celebrate seventy years of perpetual war. September 11th will commemorate one aspect of this long war – the War on Terror – but the calendar could be filled with other bellicose starts and stops: the Korean War, the Cold War, the Vietnam War, the War in Iraq (parts I and II), the Afghanistan War, and various incursions into places like Nicaragua, Grenada, the Balkans, and even South America as part of something called the War on Drugs.

What’s it like to be at perpetual war for nearly three-quarters of a century? Americans have become a fearful people. They are so alarmed at the possibility of a terrorist attack they have willingly given up important Constitutional liberties, even to the point of submitting to intrusive and degrading inspections at airport security. Fear of crime is such an undercurrent of American society that all new cars come with theft alarms. Americans spend billions of dollars yearly to protect themselves from identity theft, and they are greeted at supermarkets with sanitary wipes because of the fear that some stranger left dangerous bacteria on the shopping cart. Fear has caused Americans to turn upon themselves: Democrats against Republicans, Red states against Blue states, liberals against conservatives, Christians against the non-religious, rural against urban, South against North, blacks against whites, the middle class against poor people, and so on. This is a fractured nation, but at the same time a highly militarized nation, and is it any wonder that Americans love their guns, even though firearm violence kills 39 Americans every day?
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Decline and Fall (Maybe) January 17, 2011

Michael Collins


Apocalypse When? Round Up of Massachusetts Supreme Court Decision on ForeclosureGate, US Bank N.A. v Ibanez - Around 1995, the big bank lenders established their own rules for handling the various steps of issuing a mortgage.  They knew well the contract laws of the states in which they operated.  But they had bigger plans.  They wanted to bundle up thousands of mortgages and sell them as Mortgage Backed Securities (MBS).  To do that, they needed an electronic system (MERS) that could bundle mortgages and sell them repeatedly to investors here and overseas.  Never mind that state law required specific documentation at every step, including documentation to prove a specific owner of the property.  When banks resold the MBS product, as it were, they were interested in churn and more money, not tagging a specific mortgage with the latest MBS owner.
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