Consider the following.
Under Saudi law, Allah is Saudi Arabia’s first line of defense against terrorism. The 2006 law organizing the Saudi Office of Homeland Security lists its initial duty as "stressing the dependence on Almighty Allah as being vital to the security of the Kingdom."
Specifically, Homeland Security is ordered to publicize Allah’s benevolent protection in its reports, and it must post a plaque at the entrance to the Emergency Operations Center with an 88-word statement that begins, "The safety and security of the Kingdom cannot be achieved apart from reliance upon Almighty Allah."
Saudi legislator Ayatollah Abdul Rahim, a Muslim Cleric, tucked the Allah provision into Homeland Security legislation as a floor amendment that lawmakers overwhelmingly approved two years ago.
What are your first thoughts upon reading that. Maybe “Those damn Muslims are crazy, they can not keep Allah out of anything”. Now you know how we sound to them when we let Christian Fundamentalists take over our government functions. The three paragraphs above were taken from the Lexington Herald Leader Newspaper in Lexington, Kentucky. I changed the words Kentucky to Saudi Arabia, God to Allah Commonwealth to Kingdom, and “State Rep. Tom Riner, a Southern Baptist minister” to “Saudi legislator Ayatollah Abdul Rahim, a Muslim Cleric”.
Admit it you thought it was a real article about Saudi Arabia.
The entire real article is here. http://www.kentucky.com/210/story/608229.html and it is worse than the part.
Remember the last words the 9-11 highjackers spoke before smashing into the World Trade Center were Allahu Akbar or “God is Great” Lets please not play a game of my God can beat up your God with them.
Friday, November 28, 2008
SH*TTY CITI
Citigroup has now received $45 billion from the taxpayers in return for preferred shares of its stock. They have also received a guarantee from the government on $306 billion of risky assets it owns.
As taxpayer I would like to know what return the government is getting on its $54 billion. I have a suggestion for them – 32% plus late fees of course. Many of you may see where I am going with this. I was once the owner of a Citi credit card. I made every payment for 11 years. In 2003 I was late on a payment and Citi raised my interest rate to 32%. Of course this is not feasible because Citi would surely argue that at that rate they would never be able to get out of trouble and repay the taxpayers. No kidding?
Credit Card issuers claim the rationale for these usurious rates is its need to protect itself as those who are late on payments have an increased rate of default and therefore the increased interest (profit) is from taking on increased risk. Sub-Prime Lenders used the same argument for charging borrowers 14% on a mortgage at a time prime borrowers received 6% mortgages. This argument fails on so many levels. These companies charge these rates because they can, period. In fact Citi and other credit card issuers invented the concept of “universal default” in order to put as many customers as possible into this ridiculous rate. For those of you unfamiliar with the concept universal default means that if you are in default on any obligation (ie late on another card payment from another issuer) the card issuer can declare you in default on their card and the default rate would kick in. Citi actually discontinued this practice voluntarily in 2007 after some bad publicity, but the practice persists with other issuers.
If they truly believed that those who were late on a payment were likely to default would it not be better to maintain the existing interest rate and keep the payment affordable than to increase the rate to 32% and all but assure that those on the edge can not pay. (See Above)
If issuers believe these exorbitant rates were needed to hedge against defaults wouldn’t it have been prudent of them to segregate the extra interest they earned in a contingency fund to help them cope when these bad loans and credit card debts began to default. For example if a normal credit card was at 7% interest and others were upped to 32% because of risk factors, shouldn’t the 7% portion of the return on the 32% card be put in the companies operating capital while the 25% premiums being collected be put in a reserve fund to help offset losses due to defaults on these “risky cards”. Same with sub-prime loans, excess gets put into a reserve to help when these risky loans default.
Of course this did not happen. Any excess revenues were passed on as dividends and large executive bonuses. Then when things turned sour in credit issuing land the taxpayer is now expected to bail them out.
I am not saying that some of these loans were not risky, undoubtedly many turned out to be exactly that. I am saying that Citi and others either did not believe or failed to prepare for their own arguments.
Many States have usury laws that cap the interest that lenders can charge on a loan. In Florida, where I lived at the time of Citi’s raise to 32% the rate was 18% for loans of under ½ million dollars. Citi is able to circumvent this law because of in 1978 the Supreme Court ruled in Marquette vs. First Omaha Service Corp., that a national bank could charge the highest interest rate allowed in their home state to customers living anywhere in the United States, including states with restrictive interest caps. When it comes to credit card interest rates, the law in a lender's home state rules; It doesn't matter what kind of rate cap exists in a customer's state.
It did not take Citi (and many others) long to figure out what to do after this ruling. New York-based powerhouse Citibank moved its credit card business to South Dakota who has no interest rate cap, in 1981. Citibank went to South Dakota, not because South Dakota was a banking center but because it had that particular law
In 1982, the four largest banks in Maryland relocated their credit card operations to Delaware because of that state's lender-friendly credit card laws. Other states with lender-friendly credit laws include Georgia, Illinois, Nebraska, Nevada, Rhode Island and Utah. To hang on to the credit card business, many other states loosened state usury limits.
It is criminal that these companies are allowed these interest rates. One State resisted. My current home state of Arkansas Amendment 60 to the state constitution, approved in 1982, caps interest rates at 5 percent above the federal discount rate. The teeth has also been taken out of this law. The Gramm-Leach-Bliley Financial Modernization Act, which the U.S. Congress passed in 1999 allows state-chartered banks to charge interest rates equal to those charged by other banks operating in their state.
Our congress has been in the pocket of banks and credit card issuers much like these companies cards are in your pockets and wallets. If these issuers want bailouts now I say the following strings must attach.
1. A federal Usury law must be enacted on consumer debt limiting interest rates to no more than 18%. (Less would be better)
2. Another federal law which outlaws universal default.
3. Issuers must set aside a certain amount of revenue gleaned from above market rates to risky borrowers in a fund to cushion losses when things go south. This is much the same as insurance companies are required to keep reserves to pay claims.
Of course Congress does not need permission from the industry to enact any of these changes. Congress should also investigate ways to re-examine Bankruptcy laws to let Federal Judges re-write mortgages, and take away at least in part the student loan exclusion from Bankruptcy. This would be but a rollback to the way the law used to be before the 2005 revisions to the Bankruptcy Code was pushed through by the Banks and their lobbyists.
Rich Leonard, A federal Bankruptcy Judge from North Carolina speaks of Bankruptcy law reform in an excellent article found here. http://www.washingtonpost.com/wp-dyn/content/article/2008/11/27/AR2008112702051.html
I will close with an excerpt from that article
“I have twice participated in briefing sessions organized by the House Judiciary Committee, where I was lectured by lobbyists for the mortgage industry about the sanctity of contracts. I have listened to their high-priced lawyers make fallacious constitutional arguments based on discredited cases from the 1930s. (This is, incidentally, an industry that is not particularly concerned about its own contractual obligations as it tries, through various Treasury-aided programs, to stay afloat.)”
All you reading this that have credit cards insist your congressmen take up these legislative goals in conjunction to giving these banks money. Or we could just ask the banks pay 32%
As taxpayer I would like to know what return the government is getting on its $54 billion. I have a suggestion for them – 32% plus late fees of course. Many of you may see where I am going with this. I was once the owner of a Citi credit card. I made every payment for 11 years. In 2003 I was late on a payment and Citi raised my interest rate to 32%. Of course this is not feasible because Citi would surely argue that at that rate they would never be able to get out of trouble and repay the taxpayers. No kidding?
Credit Card issuers claim the rationale for these usurious rates is its need to protect itself as those who are late on payments have an increased rate of default and therefore the increased interest (profit) is from taking on increased risk. Sub-Prime Lenders used the same argument for charging borrowers 14% on a mortgage at a time prime borrowers received 6% mortgages. This argument fails on so many levels. These companies charge these rates because they can, period. In fact Citi and other credit card issuers invented the concept of “universal default” in order to put as many customers as possible into this ridiculous rate. For those of you unfamiliar with the concept universal default means that if you are in default on any obligation (ie late on another card payment from another issuer) the card issuer can declare you in default on their card and the default rate would kick in. Citi actually discontinued this practice voluntarily in 2007 after some bad publicity, but the practice persists with other issuers.
If they truly believed that those who were late on a payment were likely to default would it not be better to maintain the existing interest rate and keep the payment affordable than to increase the rate to 32% and all but assure that those on the edge can not pay. (See Above)
If issuers believe these exorbitant rates were needed to hedge against defaults wouldn’t it have been prudent of them to segregate the extra interest they earned in a contingency fund to help them cope when these bad loans and credit card debts began to default. For example if a normal credit card was at 7% interest and others were upped to 32% because of risk factors, shouldn’t the 7% portion of the return on the 32% card be put in the companies operating capital while the 25% premiums being collected be put in a reserve fund to help offset losses due to defaults on these “risky cards”. Same with sub-prime loans, excess gets put into a reserve to help when these risky loans default.
Of course this did not happen. Any excess revenues were passed on as dividends and large executive bonuses. Then when things turned sour in credit issuing land the taxpayer is now expected to bail them out.
I am not saying that some of these loans were not risky, undoubtedly many turned out to be exactly that. I am saying that Citi and others either did not believe or failed to prepare for their own arguments.
Many States have usury laws that cap the interest that lenders can charge on a loan. In Florida, where I lived at the time of Citi’s raise to 32% the rate was 18% for loans of under ½ million dollars. Citi is able to circumvent this law because of in 1978 the Supreme Court ruled in Marquette vs. First Omaha Service Corp., that a national bank could charge the highest interest rate allowed in their home state to customers living anywhere in the United States, including states with restrictive interest caps. When it comes to credit card interest rates, the law in a lender's home state rules; It doesn't matter what kind of rate cap exists in a customer's state.
It did not take Citi (and many others) long to figure out what to do after this ruling. New York-based powerhouse Citibank moved its credit card business to South Dakota who has no interest rate cap, in 1981. Citibank went to South Dakota, not because South Dakota was a banking center but because it had that particular law
In 1982, the four largest banks in Maryland relocated their credit card operations to Delaware because of that state's lender-friendly credit card laws. Other states with lender-friendly credit laws include Georgia, Illinois, Nebraska, Nevada, Rhode Island and Utah. To hang on to the credit card business, many other states loosened state usury limits.
It is criminal that these companies are allowed these interest rates. One State resisted. My current home state of Arkansas Amendment 60 to the state constitution, approved in 1982, caps interest rates at 5 percent above the federal discount rate. The teeth has also been taken out of this law. The Gramm-Leach-Bliley Financial Modernization Act, which the U.S. Congress passed in 1999 allows state-chartered banks to charge interest rates equal to those charged by other banks operating in their state.
Our congress has been in the pocket of banks and credit card issuers much like these companies cards are in your pockets and wallets. If these issuers want bailouts now I say the following strings must attach.
1. A federal Usury law must be enacted on consumer debt limiting interest rates to no more than 18%. (Less would be better)
2. Another federal law which outlaws universal default.
3. Issuers must set aside a certain amount of revenue gleaned from above market rates to risky borrowers in a fund to cushion losses when things go south. This is much the same as insurance companies are required to keep reserves to pay claims.
Of course Congress does not need permission from the industry to enact any of these changes. Congress should also investigate ways to re-examine Bankruptcy laws to let Federal Judges re-write mortgages, and take away at least in part the student loan exclusion from Bankruptcy. This would be but a rollback to the way the law used to be before the 2005 revisions to the Bankruptcy Code was pushed through by the Banks and their lobbyists.
Rich Leonard, A federal Bankruptcy Judge from North Carolina speaks of Bankruptcy law reform in an excellent article found here. http://www.washingtonpost.com/wp-dyn/content/article/2008/11/27/AR2008112702051.html
I will close with an excerpt from that article
“I have twice participated in briefing sessions organized by the House Judiciary Committee, where I was lectured by lobbyists for the mortgage industry about the sanctity of contracts. I have listened to their high-priced lawyers make fallacious constitutional arguments based on discredited cases from the 1930s. (This is, incidentally, an industry that is not particularly concerned about its own contractual obligations as it tries, through various Treasury-aided programs, to stay afloat.)”
All you reading this that have credit cards insist your congressmen take up these legislative goals in conjunction to giving these banks money. Or we could just ask the banks pay 32%
Fire Marbury
Stefan Marbury is a point guard for the New York Knicks professional basketball team. He makes around 21 million dollars a year to play basketball. That comes to about $256,000 a game for a 82 game schedule.
He has had a running disagreement with coaches and management since he entered the NBA. He played two and a half years with the Minnesota Timberwolves before a dispute with coaches over his role in the offense led to him being traded to New Jersey. His team won no playoff series.
He then spent two years in New Jersey and three in Phoenix and predictably had personal successes but his teams never won even one playoff series. In January 2004 he was traded to New York to play for his hometown team.
He played for the US Olympic team and scored an US Olympic record 31 points in a game, of course his team only managed a bronze medal. He spent the 2005-2006 season feuding with Larry Brown. It makes sense that Marbury would no better than Brown, after all Marbury has won a grand total of ZERO playoff series as an NBA player and all Brown has done as a coach is win the NBA championship. By the way he also won a NCAA championship making him the only coach in history to have won both an NCAA and NBA championship. Nonetheless at the conclusion of the season the Knicks fired Brown and kept Marbury. That is some fine management there Knicks.
The Knicks then hired Isiah Thomas as Head Coach to begin the 2006-2007 season. After a slight improvement in the team and that year (winning 33 rather than the previous years 23 games in an 82 game schedule) Thomas and Marbury began locking horns early in the 2007-2008 season. Marbury left the team after learning that Thomas was removing him from the starting lineup. I am no fan of Thomas’ coaching prowess however he certainly has forgotten more about winning than Marbury will ever know. He won a NCAA title while playing for Bobby Knight at Indiana, and won two NBA titles while a player for the Detroit Pistons. At the season’s conclusion Thomas was fired, Marbury was retained.
Mike D’Antoni was hired to coach the Knicks this season and he and Knicks management tried in the off-season to trade Marbury. This proved difficult as Marbury’s toxicity to every team he touches has gone from a hypothesis to a proven theory and no other team wants him and his $21 million salary.
D’Antoni did not play Marbury in the first 14 games of the season believing Marbury’s heart not to be in the game and no doubt hoping to still effectuate a trade. After many injuries to the Knick’s other guards D’Antoni approached Marbury to enter their game against Detroit on Wednesday night. Marbury refused.
The Knicks have suspended Marbury for one game and docked him $400,000 in pay. Are you kidding me? I wonder what Isiah Thomas former coach Bobby Knight would have done? I suspect that Knight would likely been arrested for assault and battery on his point guard and then acquitted by a jury because his actions were justifiable.
Maybe Marbury has a legitimate beef with D’Antoni and Knicks management (though I doubt it from past history). Maybe he is completely in the right. I do not care. When you are making $256,000 per game to play basketball you do not get to make those decisions your bosses do. Your coach and general manager will decide when and if and in what manner you play. That is the trade off. If you would like to be a coach, take a huge paycut and become one. Surely some Division I college could use an assistant with NBA experience as a recruiting tool if nothing else. Of course Marbury would make less in a year than he now makes for not playing in games.
About ten million Americans are currently unemployed with more losing their jobs everyday. The vast majority of these people make less in 5 years than what Marbury makes in a game and they do so in jobs that are far less glamorous and far more like work than playing basketball, yet when Marbury is asked by his bosses to work, he refused. Marbury should now join the ranks of the unemployed. Guaranteed contract or not I would also quit paying him. There is no doubt some clause in his contract that arguably would allow the Knicks to stop paying him. Let him sue to get his money. Let the NBA players Union file a grievance. Have the Knicks and their team of high priced attorneys drag out the proceedings for a year or more. If he does not want to work he does not need to be paid. Marbury may well win the suit but make him win. With his record that is no sure thing.
2008 may go down as the year that the complete inability of the wealthy in this country and the world to even contemplate what it is like to not be one of them was shone in the light of day. AIG Executives hold junkets at high priced resorts that most taxpayers can not afford to bring their families, a week after being bailed out by those same taxpayers. It never occurred to them that this would not sit well with those taxpayers; they could not contemplate it. The big three auto executives go to capital hill to beg for taxpayer’s money to keep their ailing companies afloat and arrive in corporate jets. It never occurred to them that this would be seen as a problem by the plebes they were begging money from. Finally Stephen Marbury refuses to enter a NBA game and collect his $256,000 for the night because of a perceived slight from management while millions would gladly do so for free. I would expect that when Marbury was a schoolboy star in NYC he would have done the same, but now he has more in common with the executives at AIG and GM than that dreaming schoolboy. He can not contemplate what it is like to be among the 10 million without work through no choice of their own.
He has had a running disagreement with coaches and management since he entered the NBA. He played two and a half years with the Minnesota Timberwolves before a dispute with coaches over his role in the offense led to him being traded to New Jersey. His team won no playoff series.
He then spent two years in New Jersey and three in Phoenix and predictably had personal successes but his teams never won even one playoff series. In January 2004 he was traded to New York to play for his hometown team.
He played for the US Olympic team and scored an US Olympic record 31 points in a game, of course his team only managed a bronze medal. He spent the 2005-2006 season feuding with Larry Brown. It makes sense that Marbury would no better than Brown, after all Marbury has won a grand total of ZERO playoff series as an NBA player and all Brown has done as a coach is win the NBA championship. By the way he also won a NCAA championship making him the only coach in history to have won both an NCAA and NBA championship. Nonetheless at the conclusion of the season the Knicks fired Brown and kept Marbury. That is some fine management there Knicks.
The Knicks then hired Isiah Thomas as Head Coach to begin the 2006-2007 season. After a slight improvement in the team and that year (winning 33 rather than the previous years 23 games in an 82 game schedule) Thomas and Marbury began locking horns early in the 2007-2008 season. Marbury left the team after learning that Thomas was removing him from the starting lineup. I am no fan of Thomas’ coaching prowess however he certainly has forgotten more about winning than Marbury will ever know. He won a NCAA title while playing for Bobby Knight at Indiana, and won two NBA titles while a player for the Detroit Pistons. At the season’s conclusion Thomas was fired, Marbury was retained.
Mike D’Antoni was hired to coach the Knicks this season and he and Knicks management tried in the off-season to trade Marbury. This proved difficult as Marbury’s toxicity to every team he touches has gone from a hypothesis to a proven theory and no other team wants him and his $21 million salary.
D’Antoni did not play Marbury in the first 14 games of the season believing Marbury’s heart not to be in the game and no doubt hoping to still effectuate a trade. After many injuries to the Knick’s other guards D’Antoni approached Marbury to enter their game against Detroit on Wednesday night. Marbury refused.
The Knicks have suspended Marbury for one game and docked him $400,000 in pay. Are you kidding me? I wonder what Isiah Thomas former coach Bobby Knight would have done? I suspect that Knight would likely been arrested for assault and battery on his point guard and then acquitted by a jury because his actions were justifiable.
Maybe Marbury has a legitimate beef with D’Antoni and Knicks management (though I doubt it from past history). Maybe he is completely in the right. I do not care. When you are making $256,000 per game to play basketball you do not get to make those decisions your bosses do. Your coach and general manager will decide when and if and in what manner you play. That is the trade off. If you would like to be a coach, take a huge paycut and become one. Surely some Division I college could use an assistant with NBA experience as a recruiting tool if nothing else. Of course Marbury would make less in a year than he now makes for not playing in games.
About ten million Americans are currently unemployed with more losing their jobs everyday. The vast majority of these people make less in 5 years than what Marbury makes in a game and they do so in jobs that are far less glamorous and far more like work than playing basketball, yet when Marbury is asked by his bosses to work, he refused. Marbury should now join the ranks of the unemployed. Guaranteed contract or not I would also quit paying him. There is no doubt some clause in his contract that arguably would allow the Knicks to stop paying him. Let him sue to get his money. Let the NBA players Union file a grievance. Have the Knicks and their team of high priced attorneys drag out the proceedings for a year or more. If he does not want to work he does not need to be paid. Marbury may well win the suit but make him win. With his record that is no sure thing.
2008 may go down as the year that the complete inability of the wealthy in this country and the world to even contemplate what it is like to not be one of them was shone in the light of day. AIG Executives hold junkets at high priced resorts that most taxpayers can not afford to bring their families, a week after being bailed out by those same taxpayers. It never occurred to them that this would not sit well with those taxpayers; they could not contemplate it. The big three auto executives go to capital hill to beg for taxpayer’s money to keep their ailing companies afloat and arrive in corporate jets. It never occurred to them that this would be seen as a problem by the plebes they were begging money from. Finally Stephen Marbury refuses to enter a NBA game and collect his $256,000 for the night because of a perceived slight from management while millions would gladly do so for free. I would expect that when Marbury was a schoolboy star in NYC he would have done the same, but now he has more in common with the executives at AIG and GM than that dreaming schoolboy. He can not contemplate what it is like to be among the 10 million without work through no choice of their own.
Monday, November 17, 2008
He Tried To Tell You
If you have any doubts that most of the so called financial experts on television touting stocks on CNBC or Fox Business Channel or other places are just pulling ideas out of their butt, you must watch this video. Peter Schiff who was Ron Paul's economic advisor in the past election tries to tell these "experts" whats coming (with uncommon accuracy) and he is nearly laughed off the shows as these people tell the masses to buy Washington Mutual, Bear Stearns and Goldma Sachs among others.
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