Mar 04 2009

Russian Analyst Predicts the United States will Collapse in 2010

Category: Economy,ObamaTim @ 10:51 am

Interesting perspective on the global economic crisis from Moscow today.

MOSCOW – If you’re inclined to believe Igor Panarin, and the Kremlin wouldn’t mind if you did, then President Barack Obama will order martial law this year, the United States will split into six rump-states before 2011, and Russia and China will become the backbones of a new world order.

The prediction from Panarin, a former spokesman for Russia’s Federal Space Agency and reportedly an ex-KGB analyst, meshes with the negative view of the United States that has been flowing from the Kremlin in recent years, in particular from Vladimir Putin.

Putin, the former president who is now prime minister, has likened the United States to Nazi Germany’s Third Reich and blames Washington for the global financial crisis that has pounded the Russian economy.

Wow. That is a lot to digest on a Tuesday morning. Drawing analogies between the US and Nazi Germany is completely absurd and sounds like an inflammatory ploy for attention. Add to that the assertion that Obama will declare Martial Law and you are really stirring the pot. After all, many Americans are worried that the Obama Administration will be coming for their guns as it is. With talk of Martial Law, that fear will only grow.

So, it this new world order, the US will somehow divide into six states and Alaska with all of her resources will return to Russia. That one sounds like a plea for Russian Nationalism and a rallying cry for a people that live in a state who has collapsed. Not really surprising that they would want to drag us down to their level.

China and Russia will become the backbone of the new world economy. Think about that one for a minute, two communist or former communist powers leading the world. If that were to happen, you would see two things right away. First, we would likely see a decline in the world’s population as all the led-tainted products from China spread out throughout the world. Secondly, you could say goodbye to any world aid efforts from the dominant powers. Let’s face it, neither country thinks much of those outside of their boarders. Come to think of it, doesn’t one of them have a giant wall….

The last time our country was attacked and threatened by a foreign power, we rallied together and came out stronger then before. Perhaps comments like Mr. Panarin’s will help to wake this country up and get us to realize that we are under constant attack and we all need to pull together and fight for our nation.

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Feb 12 2009

Henrietta Hughes – “I don’t feel homeless and alone anymore”

Category: Economy,ObamaTim @ 7:41 am

Tuesday, President Obama visited the Fort Myers, Florida area and during a talk, he encountered Henrietta Huges

At the town hall meeting President Obama held Tuesday in Fort Myers, Hughes told the president that she and her son were homeless. After the event, as we reported yesterday, Hughes got an incredible offer: Chene Thompson, wife of a state legislator, offered the use of a vacant home she owns.

“It’s amazing what the lord has done through his people.” In case you missed the coverage, here is the video from the town hall. Note Obama saying he would have his people contact her after the town hall.

There are a couple of interesting parts of this video. The Dow Watch box in the corner of the screen shows the Dow falling lower as he speaks. What is more interesting is the emotion displayed by the woman to the left of Obama who seems overcome by his presence and mouths, “I love you Barack” in the background. Scary.

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Nov 25 2008

Somali Pirates Strike Again – Hijack a Yemeni Ship

Category: EconomyTim @ 9:29 am

The Somali pirates are at it again, this time hijacking a Yemeni ship:

NAIROBI (Reuters) – Somali pirates have hijacked a Yemeni ship loaded with steel, officials said on Tuesday, and one of Asia’s biggest shippers said it was diverting vulnerable vessels away from the dangerous Gulf of Aden.

Scores of attacks this year have brought the pirates millions of dollars in ransoms, hiked up shipping insurance costs, sent foreign navies rushing to the area, and left about a dozen boats with more than 200 hostages still in pirate hands.

Yemen’s official SABA news agency said the Yemeni ship MV Adina was travelling from Mukalla port to the southern island of Socotra and had been due to dock on November 20 with 507 tonnes of steel.

Yemeni security sources said the authorities were in touch with the pirates, who were demanding a $2 million ransom.

This is apparently the same group who hijacked the Saudi supertanker a couple of weeks ago:

Meanwhile, a spokesman for pirates holding a Saudi supertanker loaded with crude oil has told the BBC a ransom has not been determined. The spokesman said the pirates have spoken to company intermediaries, but found them to be untrustworthy.

Pirates seized the Sirius Star Nov. 15. The supertanker was carrying 2 million barrels of crude oil worth that has been estimated to be worth about $100 million.

Untrustworthy? I would think pirates are untrustworthy. The continued hijacking of ships is costing millions of dollars and has to be having an impact on the troubled world economy. What is being done to combat these pirates?

Peter Swift, head of the International Association of Independent Tanker Owners (Intertanko) suggested that warships could begin monitoring vessels leaving Somali waters, rather than attempting to patrol the entire Gulf of Aden and a significant part of the Indian Ocean.

He said the other option was a blockade around Somalia.

However, Nato Secretary General Jaap de Hoop Scheffer said on Monday that the alliance was not considering any naval blockade.

He said that such action has not been endorsed by the UN Security Council. Nato has four warships on duty in the area.

Looks like politics is playing a key role in the success of the pirates. The companies are sending some of the most valuable cargo in the world across the a vast ocean and hoping they are not captured. Seems to me that it is high time for a serious display of naval power in the area; one displayed though a coordinated effort involving many countries would be best. A global effort of organized attacks on these pirates with conviction and dedication will make the shipping lanes safer. We should be past the age of piracy on the high seas by now. Our economy cannot afford to pay ransom for resources.

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Nov 19 2008

ESPN Wins BCS TV Rights: Another Blow to Football Fans Without Cable

Category: Economy,Entertainment,Pro Sports,SportsTim @ 10:30 am

For those football fans without cable TV, you are now officially in trouble:

ESPN and the Bowl Championship Series confirmed Tuesday that they have reached agreement on a four-year television deal beginning in 2011 that gives the cable network broadcast rights to the Orange Bowl, Sugar Bowl, Fiesta Bowl and the national championship game, which rotates among those three plus the Rose Bowl. Sources from both sides said the contract is worth $500 million.

Perhaps this is a sign of the times. It’s getting harder to find the “free lunch” in the sports world. Prime sports are moving more toward a pay-per-view option:

ESPN and other cable network providers say this isn’t a big deal, noting that in most American homes today, subscription TV is a utility, like power and water. An estimated 98 million of America’s 118 million television households have cable or satellite systems.

Moreover, some of that other 20 million are a step ahead, not a step behind. They’re iPhonegeneration kids who skip cable so they can get higher-octane Internet – and watch TV that way.

But still, for the 15 million to 20 million households that only have broadcast TV, Tuesday’s announcement is the bluntest declaration so far that they’re being shut out of one of America’s biggest cultural common denominators: major sports.

It is true, as cable and sports operators note, that this is a business with costs, and no one has a right to enjoy the product for nothing.

OK. So most of us already have ESPN and having access online helps those who do not have cable. Add to that the digital TV conversion in February and it looks like not having cable/satellite is no longer even an option for sports fans or TV viewers in general.

I know the “bottom-line” mentality has been around since the first exchange of goods, but it seems that we are getting out-of-hand. Advertising is squeezed into every possible corner, even on the field of play and the player’s uniforms. Commercials run over top of plays and have worked their way into the play-by-play. We are already paying for the right to view sports. At what point does it end?


Nov 18 2008

Pirates on the High Seas – Hijacking Oil Tankers

Category: EconomyTim @ 7:54 am

There are certain things in the world that you believe are the stuff of myths and legends. I assumed that the pirates of old were history and those who survived and those who wanted to justify a bigger navy perhaps embellished their exploits. Then I saw this story:
Oil Tanker

In a dramatic and unprecedented display of prowess, suspected Somalian pirates operating far out in open waters have seized an oil tanker as long as an aircraft carrier, the U.S. military said Monday.

The Sirius Star, flying the Liberian flag, was hijacked and its multinational crew of 25 were kidnapped by pirates off the coast of East Africa on Saturday more than 450 nautical miles from the port of Mombasa, Kenya.

The ship appeared headed toward Somalia, the East African country from where many of the region’s pirates set out on raids, according to the U.S. 5th Fleet.

The pirates made no immediate demands, said U.S. Navy Lt. Nathan Christensen. “It’s the largest ship we’ve seen attacked,” Christensen said from the fleet’s base in Manama, Bahrain.

Pirates!?!? Hijacking oil tankers? Those things are huge. How could something like that happen?

The burgeoning piracy crisis has flourished in lawless Somalia where almost two decades without a central government has left a country wracked by conflict, chaos and poverty.

“It was attacked more than 450 nautical offshore of Mombasa. This means that the pirates are now operating in an area of over 1.1 million square miles. This is a measure of the determination of the pirates and … a measure of how lucrative piracy could become,” Campbell said.

The pirates are holding the ship and crew and company officials are waiting for ransom demands. Just when we thought it was safe to go to the gas pump, now we get oil piracy. What did this act do to the markets in our fragile economy?

Oil futures spiked Monday morning just as news broke that Somali pirates had nabbed a Saudi Aramco-owned super tanker named Sirius Star off the coast of Kenya. The huge ship can carry up to 2 million barrels of oil.

Just before 9 a.m., oil futures stood at $56 a barrel. By 10 a.m., they rose $3 to nearly $59. But the price effect — if there was one — was short-lived. By noon, oil prices were back to their now-familiar downward slide and were trading in negative territory.

If my math is correct (2 million barrels at $59 per barrel), the ship’s cargo alone is worth $118 million. No wonder piracy is making a comeback. I’m glad to hear this act did not have a large impact on oil prices, but we still have a crew and ship in hostile hands. Hopefully, the crew will be released unharmed.

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Nov 13 2008

There Goes The Neighborhood: Home Forclosures Up 25%

Category: EconomyTim @ 7:24 am

As the economy wasn’t in enough trouble, we have more bad news out of the housing market:

MIAMI (AP) — The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.

More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc. One in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.

More than 84,000 properties were repossessed in October, RealtyTrac said.

Forecloses drop property values for everyone in the neighborhood; compounding our economic problems. One again, our tendency to live beyond our means is catching-up to us:

Years of lending to risky, or “subprime” borrowers that fueled the housing boom has created an unprecedented number of foreclosures due to the inability of many of those borrowers to pay their mortgages, particularly as interest rates reset and as plunging home values nationwide increasingly render properties worth less than the mortgage.

The numbers might also be showing the effects of the economic downturn, Sharga said. If they do not yet, they will soon.

“An economic downturn is traditionally a precursor to foreclosures, even in a normal foreclosure cycle,” Sharga said. “This is not a normal foreclosure cycle by any means.”

All of this bad news at the eve of the holiday shopping season cannot be good for the economy. People will be worried about where they are living, not about what gifts to give. This may be a long ride before it’s over.

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Nov 12 2008

Best Buy Reacts to the Bad Economy, Lowers Profit Projections

Category: EconomyTim @ 8:57 am

In what may be a bad omen for the Christmas shopping season, Best Buy announces a lower profit forecast:

NEW YORK (CNNMoney.com) — Best Buy, the No. 1 electronics retailer, cut its full-year profit forecast Wednesday, citing continued weakness in consumer spending that it says has been exacerbated by the “recent turmoil in the financial markets.”

The company also said “uncertainty regarding future consumer spending” would limit its ability to project revenue for the critical holiday shopping season.

That’s a huge problem since the November-December holiday shopping months typically account for 50% or more of retailers’ annual profits and sales.

“In 42 years of retailing, we’ve never seen such difficult times for the consumer,” Brian Dunn, president and chief operating officer of Best Buy, said in a statement. “People are making dramatic changes in how much they spend, and we’re not immune from those forces.”

In the wake of Circuit City filing for Chapter 11, one would expect a bump in sales for Best Buy. Clearly, they see this economy getting worse before it gets better.

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Nov 07 2008

Tough Economic Times May Equal Short Lines at Walt Disney World

Category: Economy,EntertainmentTim @ 11:47 am

The tough economic times are having an impact on the Disney Corporation:

The global economic downturn hit Walt Disney Co’s quarterly results harder and faster than Wall Street expected, with the company on Thursday reporting a sharp decline in hotel bookings and softness in advertising revenue at its networks.

Disney’s shares slid 9 percent in extended trade but recovered a bit after executives announced plans to discount stays at Walt Disney World to stimulate bookings in the first half of 2009.

“Consumer confidence is the lowest we’ve seen in over three decades, and even the best product out there is feeling the effect,” Disney Chief Executive Robert Iger told analysts on a conference call.

The entertainment industry better take notice, times are getting tough. What about the Disney parks?

Disney reported parks and resorts profit of $412 million, down from $430 million a year earlier. Sales at the unit rose 6.5 percent to $2.97 billion.

Reservations are off 10 percent for parks visits this quarter and next quarter compared with the year-earlier periods, Iger said. Holiday bookings at Walt Disney World near Orlando, Florida, are down 1 percent, he said. Visitors who book four nights will receive an additional three for free, plus a $200 credit to spend on food or merchandise.

“People want to take vacations in 2009 but they are much more value-focused,” Iger said. “That’s why we have seen bookings fall off somewhat.”

The strengthening U.S. dollar is making the trip to Disney World less affordable for foreign tourists, who have bolstered Disney’s parks this year. Resort profit may decline 12 percent this fiscal year as the U.S. economy shrinks, said Barclays Capital analyst Anthony DiClemente before yesterday’s report.

By 4 get 3 free. That sounds like a good deal, but getting there and being able to take 7 days off in a trying job market may be a completely different issue. I think Disney is being short-sited here. I believe people are more likely to spend fewer days in the parks. Why not add incentives for shorter stays then 7 days? I know it is more cost-effective to have longer visits, but realistically, your customer’s needs have changed.

Does this signal really problems for Disney in the future? Forbes doesn’t think so:

Long-term, however, Spring said Disney still has solid brands and a strong balance sheet.

It’s good to know there will still be some magic in the Magic Kingdom for years to come. Maybe this just reduces the size of the crowds at Disney World for a while and prevents the need for the Fast Pass.

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Nov 07 2008

Trouble for Obama Already? New Chief of Staff Rahm Emanuel and Freddie Mac

Category: Economy,PoliticsTim @ 7:53 am

Politics is a rough sport. One minute you are on top of the world and the next, you are frowning at questions in front of bright lights. Barack Obama has his first issue with his first hire, Chief of Staff Rahm Emanuel

President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.”

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for “13 months-a relatively short period of time.”

He’s only had the chief of staff postion a relatively short period of time as well. If Emanuel had a hand in the Freddie Mac disaster, this could be the first major gaff of the Obama Administration. We will have to watch closely and see how this one develops.

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Nov 07 2008

Obama Administration’s Plan to Deal with the Economic Crisis

Category: Economy,PoliticsTim @ 7:16 am

Only days after the election, Barack Obama and his advisers appear to be wasting little time in dealing with the economic crisis that faces our country:

Nov. 6 (Bloomberg) — President-elect Barack Obama will meet tomorrow with his economic advisory group, a team that includes billionaire investor Warren Buffett, ex-Commerce Secretary William Daley and former Federal Reserve Chairman Paul Volcker.

After the meeting in Chicago, Obama will hold his first press conference since winning the U.S. presidential election on Nov. 4, according to a statement from his transition team. Vice President-elect Joe Biden will also attend.

As Obama builds-out his cabinet, all the world markets will watch one key position.

The market is looking closely at who Obama will name as Treasury Secretary. Top candidates for the job included Timothy Geithner, president of the Federal Reserve Bank of New York, Summers and Volcker.

A Reuters poll of economists found 26 of 48 respondents thought Geithner would be chosen for the job, while Summers came second with 14 votes.

Whoever takes the Treasury job will guide the $700 billion economic bailout package and the regulatory reform needed to prevent a repeat of the current crisis.

While it appears that Summers may be one of the two leading candidates, he may not sit all that well with the left side of the Democratic party:

His experience, however, has a downside for a campaign that sold Americans on a message of change. In the Clinton administration, Summers was a major proponent of free trade, deregulation and free market-oriented policies, which have come under fire in recent months as the economy has spiraled downward.

But even former critics note that in the seven years since he’s left government, Summers has taken a more progressive stance on economic issues. In a regular Financial Times column, he’s pushed for greater financial regulation, restrictions on trade and closing the income gap.

“He didn’t understand that stuff five years ago, but he does now,” said a liberal economist and distant Obama adviser. “A lot of times you have the Greenspan problem, where you get to a point in your economic life and you can’t evolve even if the data tells you too.”

I like the sound of the free-market approach and am a little bit scared by the, “He didn’t understand that stuff five years ago” statement. Didn’t understand what? The need for more government oversight in the market? That will not make Wall Street happy.

What about Geither?

Geithner, who like Obama is only 47 years old, has demonstrated ability to handle a crisis, said economists close the transition. And a confidante of Treasury Secretary Henry Paulson, Geithner been at the very center of the government’s fast-evolving response to the financial crisis, chairing meetings at his New York office.

He began sounding the alarm about risks associated with lacking federal oversight over complex financial products years before the current crisis. In 2005, at his urging, financial services companies established a national registry to help process and track their trades of credit derivatives, an insurance-like product bought by financial services companies to cover risky subprime mortgage investments.

What a mess we are in. Hopefully, one of these two will be the correct choice to get things back on line and moving forward again.

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