Obama's Housing Clunker

By Joy Tiz

The antiquated media would have you believe that an increase in home sales in April is a signal that the Obama economy is in recovery. Not only are they wrong; the worst hasn’t even hit yet. The recent up-tick in sales was caused not by a better economy, but by the homebuyers’ tax credit, which expired April 30th. Units under contract by April 30th will still be eligible for the credit, so expect more synthetic numbers to be released during the summer. There is no possibility of sustaining the current government driven sales numbers as long as unemployment stays high. [more...]

Will We Be Hit with a Double Dip Recession?

By Gerard Lameiro

This week an op-ed piece in The Wall Street Journal discusses the real possibility that we might face a double dip recession. While many optimists have been claiming that the recession is over and that the economy is looking up, the stock market has been taking investors for a wild ride. Plus, over 17% of Americans are still unemployed or underemployed. Is the economy on its way to a healthy recovery? Or, are we headed instead for a double dip recession? On the plus side, The Wall Street Journal this week also reports on declining mortgage rates that might fall to 4.5% this summer. This is great for consumers that need a new mortgage or who might want to refinance their homes. Interestingly, this mortgage rate drop comes as a result of money from outside the U.S. that is seeking the safety of the U.S. economy. So, money has been flowing into U.S. bonds. While America has its own significant economic problems, we still look a whole lot safer than those European welfare state economies on the verge of potential or technical bankruptcy. [more...]

A Double Dip Recession on the Way?

By Tim Connolly

There are now numerous data points that indicate a double dip recession is now on the way for the U.S. First, contrary to most academic thought on how to recover from recessions, the Congress has chosen to raise taxes substantially, via the new taxes for healthcare reform, and now new taxes on capital gains and small business S-corporations that are called for in the new Financial Regulation bill. Don't get me wrong - we need new controls on banks. There should be capital behind every derivative, banks should be prohibited from using leverage beyond ten times their capital, and taxpayers should never be paying for trading losses. Bank sponsored trading should be in separate subsidiaries with dedicated capital that is not covered under any FDIC insurance. Last, but not least, derivatives should be publicly traded for complete transparency. [more...]

Taxes are Going Up - But Will Deficits and Debt Go Down?

By Gerard Lameiro

Lots of people have been calling for new taxes and tax increases at the federal, state and local levels. We also know that Washington will allow the Bush tax cuts to expire soon. So, taxes are going up - no doubt about it. But, as our taxes go up and up, will our deficits and debt decline? A brand new article in The Wall Street Journal sheds some light on this important topic that impacts both jobs and economic growth.
As first thought, it might seem to make sense that we need to increase taxes to cover Washington’s lavish spending spree. Remember all those costly stimulus bills that failed to bring down unemployment substantially? Unemployment is still around 9.9%. It’s actually 17.1% if you count all those people who have given up looking, or all those people who have settled for part-time work because they couldn’t find full-time work. Washington has spent lots of money following the discredited Keynesian policies of the past. [more...]

Should We Ban Offshore Drilling of Oil in the U.S.?

By Tim Connolly

There is a tremendous amount of concern over the BP Gulf of Mexico oil spill; and senators, congressional representatives, and even President Obama have called for the suspension of offshore oil drilling, and its possible termination. Is this possible, or even the right decision for our country? Let’s look at the data provided today from Gibson Consulting Online. All of the oil that comes from the Gulf is used in the U.S. The total current percentage of oil produced in the U.S. for our consumption by offshore wells is 37%. If we only look at the Gulf of Mexico, that percentage is still 32% of all the oil consumed in the USA. Given that during the 1974 Arab Oil Embargo the Middle East provided 37% of the non-communist world with all of its oil, we can easily see the magnitude of disruption in our markets if we eliminated 37% of all oil produced in the USA - long lines, perhaps $150-200 per barrel oil prices, and an economic crash that would make the last two years look tame. [more...]

From Bullish to Bearish in a Flash!

By Gerard Lameiro

The stock market crashed! The market went from bullish to bearish in a flash! The Dow was down about 1,000 points at one point during the trading day, closing at about 347 off for the day. All 30 Dow component stocks were down, Bank of America was down around 7%. What happened? Why so fast? What's going on?

Those who run the market will likely check for technical or programming glitches. These might be a contributing factor. But, it appears that the larger issue is simply FEAR. But fear of what? Fear that the problems of Greece will spread to Europe and to the rest of the world, including America. Ultimately, it's really a fear that welfare state socialism will lead to economic bankruptcy. In my book, America's Economic War, I wrote several times that socialism always leads to economic bankruptcy.

Greece has been spending way beyond its capacity to create new wealth. Greece's debt is a staggering 113% of its GDP! According to a recent article in The Wall Street Journal, "Greece's predicament - like New York's and California's - is signaling loud and clear that the spend-and-tax economic model has hit the wall." [more...]

Why America Faces a Big Fat Greek Bankruptcy

By Wayne Allyn Root

Forget Global Warming - Catastrophic Government Spending is the True Threat to Our Survival

Have you read the news lately? Greece is bankrupt. The entire country was poised to default on its debt, when the European Union (led by Germany) and the IMF (led by the USA) decided to bail them out... or risk the collapse of the entire EU and their currency, the euro. As always happens any time government is involved, the dollar figure necessary to save Greece keeps rising... first it was $50 billion... then $100 billion... now $145 billion, the biggest loan to a country ever.

But here’s the clincher - this gigantic loan will last only one year. The IMF (International Monetary Fund) assumes in one year, when Greece needs more money to stem the flow of red ink, they’ll be financially stable enough to attract loans on the open market, with no more government help. But what if the IMF is wrong? Then we’ll see one big fat Greek meltdown - taking all $145 billion down the tubes (much of it from U.S. taxpayers). That’s assuming that Greece is telling the truth about their debt in the first place. But just like the U.S. government, Greece has lied to themselves, and their citizens for years. And just like AIG, GM, Fannie Mae, Freddie Mac, and the failing public school system in America - the money we give Greece will never be enough. It’s a bottomless pit. [more...]

Will the Financial Overhaul Bill Nationalize America’s Financial Sector?

By Gerard Lameiro

Rather than eliminate bailouts of companies that are "too big to fail," the current bill being debated in the Senate gives vast new powers to the government to regulate whatever companies it chooses to regulate; to determine how to regulate those companies; to determine what companies to give bailouts to; to determine what companies to close down entirely; to determine what creditors to pay; and, to determine how to pay the favored creditors. Talk about power! Talk about control! With the proposed, new Consumer Financial Protection Bureau, the government also would essentially gain control over credit allocation across the economy. In effect, the government would control the terms and conditions of financial products and services. It could also decide certain practices were "abusive" and shut them down. That's tremendous control. That's incredible power over companies and consumers! [more...]