Silent Archimedes

Posts Tagged ‘Bush’

Goof: CNN.com confuses Obama with Bush

Posted by silentarchimedes on May 5, 2009

The writing quality of online news websites is getting worse compared to print newspapers and magazines.This is a little understandable because of the instant rush to get it online first. However, usually if there is an obvious goof in print media, the respective paper or magazine will print a correction in the next issue. Online mistakes seem to be ignored and sometimes you wonder if an editor ever reads the articles before they are put online. One of the most obvious and pathetic goofs was on CNN.com on Saturday. On their front page, main article, the headline story has a picture of President Obama and Mexican President Calderon. The headline underneath it? “Bush, Calderon huddle over flu”

Are you kidding me?? How did this make it to the front page without someone catching the mistake. It took at least seven minutes before it was fixed. Either someone was playing a trick or that’s just pathetic editing.

CNN confuses Obama with Bush

CNN confuses Obama with Bush

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Posted in Observations, Politics | Tagged: , , , , , , | 1 Comment »

Opinion: It’s time for Dick Cheney to just leave quietly

Posted by silentarchimedes on January 8, 2009

The VP and P

The VP and P

Another story from the arrogance and incompetence of the Bush administration. Today, Vice President Dick Cheney was quoted in an AP interview,

In an interview with The Associated Press, Cheney also said that Bush has no need to apologize for not foreseeing the economic crisis.

“I don’t think he needs to apologize. I think what he needed to do is take bold, aggressive action and he has,” Cheney said. “I don’t think anybody saw it coming.”

The last part is what really got me mad. A LOT, and I mean A LOT of people saw this economic crisis coming. Let’s take a quick look at some of the groups of people that saw this coming:

1. Gold bugs – Gold investors have been preparing for this economic crisis since the crash of the dot com era. Gold has steadily risen from the mid $200s/oz to a high of $1000/oz, and now at ~$850/oz today.

2. Currency investors – The euro to dollar ratio was at 0.85 at the beginning of the dot-com crash in 2001. Since then it has flipped and risen so quickly to 1.60 in early 2008. Most people familiar with the dollar index, fiat currencies and supply/demand saw this as a huge omen of future economic turmoil. It was only a matter of when.

3. Housing investors – The term housing bubble was surmised to be occurring well before the height of the housing bubble. Many people burned by the dot-com era and became fiscally responsible saw the non-stop rise in housing prices as a major deja vu.

4. Economists – There have been so many books written on this exact economic crisis in the past ten years, of which two have been reviewed on this blog (Crash Proof, The Coming Economic Collapse). Anyone who has read one of these books realized that the American economic system has been living on borrowed time and money.

5. Historians – History comes in cycles because the leaders don’t learn from history. The Iraq War and the recession afterwards first played in the first Bush administration. Instead of learning from it, the younger Bush repeated the exact same historical events.

6. Most sane people – I saw this economic crisis coming a few years ago when I started reading about the US economic system. A lot of my friends saw it coming. A lot of people knew that we only got out of the tiny recession after the dot-com crash and 9/11 because Greenspan and the Feds loosened the credit spigot and money-printing machine. What ensued was the housing bubble and more mortgaging of America’s future.

If all these people, including lots and lots of Americans saw the economic crisis coming, you are telling me the Feds and the economists that govern this country didn’t see it coming? Please… They just chose to look the other way. Why not? They are rich. There is no accountability. Leave it to the next administration or future generations to clean up the mess.

It’s really absurd that Dick Cheney deflects the Bush administration’s responsibilities by claiming that NO ONE SAW IT COMING. To put it nicely, the arrogance, narrow-mindedness and stupidity of the outgoing administration continues. The Bush administration continues to hope that in time history will judge them nicely, but I believe this second recession under their watch pretty much locks in their incompetence regardless of how well Iraq or Afghanistan turn out.

Posted in Economics, Opinion, Politics | Tagged: , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

2008 Year in Review – Top 10 in Finance

Posted by silentarchimedes on December 22, 2008

Let’s get right to it.

10. Yahoo rejects Microsoft’s $45 billion takeover offer – February 11, 2008. This one has to rank as one of the most stupid business decisions ever. Since Yahoo practically started the internet search business back in the 1990s, they have quickly given up their dominant position to Google in the past ten years without a major fight. By the middle of 2007, Google had a 53.6% market share of the search engine business, versus Yahoo’s rapidly shrinking 19.9%. Microsoft’s $44.6 billion in cash and stock offer was literally a lifeboat and gave Yahoo the best chance for long-term survival. Yahoo rejected the offer and a later offer in May valued each Yahoo share price at $33. Yahoo’s share price had been languishing around $19 in recent years. Yahoo’s CEO and founder Jerry Yang demanded $37/shr! Eventually Microsoft got tired of Yahoo’s demands and pulled all negotiations off the table. What is Yahoo today, end of 2008? The share price is $13.03 and Yang was ousted in November. Although Microsoft still has lukewarm interest in Yahoo’s search business, the main opportunity for Yahoo has passed.

9. Housing prices continue to go down town – It’s amazing how so many analysts and normal people knew that the meteoric rise of housing prices was due to risky ARMs and other loans that were impractical and ticking time bombs. It’s amazing the federal government did not see this coming or chose to not do anything about it. Because of the dot com bust from a few years ago and the recession soon after, the Feds turned a blind eye and let free credit run rampant. The bomb went off in 2006, and median housing prices have gone on a free-fall from an inflation-adjusted high of $275,000 in 2005 to near $200,000 at the end of 2008. It will take a good while to sort this thing out. Housing prices are still historically high and with high unemployment rates, increasing foreclosures will continue to flood an already over-supplied realty market.

8. Unemployment rate – The United States has been pretty lucky in terms of unemployment rates for the past two decades or so. Ever since the recovery from the high inflation, 9.0+% unemployment rates of the early 1980s, the rate has stayed well below 8.0%. Since 1995, the rate has performed even better, only touching above 6.0% once during the short recession recovery in 2003. In January 2008, the rate was around 5.0% but had already been steadily rising throughout 2007. Since this January, the rate has put on the rocket boosters and is now at 6.7% nationally, with no signs of slowing down. Several states, such as Michigan (9.6%) and Rhode Island (9.3%) already have unemployments rates above 9.0%! Another five states have rates above 8.0%! Stats were from Nov 2008 and look to be higher when December stats come out.

7. What happened to the commodities bull market? – Oil, gold, silver, platinum and copper. All were at multi-decade highs in 2007 and even in 2008. Since then? Crude oil prices have dropped from $150+/bl to $37/bl! Most commodities lost more than half their values. Exchange-traded funds such as SLV, GSG, and XLE all dropped more than 50%. The one exception so far has been gold. Although gold prices have dropped from a high over $1000/oz, they have not dropped below $700/oz, and have recovered into the $800s since then. Gold is an unique commodity and it appears that it mostly trades as a safe-haven currency than a physical commodity. In looking at the chart of GLD (below), gold prices have solidly bottomed out at $70/shr and is looking like it will have a strong 2009.

SPDR Gold Shares (GLD) Performance since Jan 2007.

SPDR Gold Shares (GLD) performance since Jan 2007

6. Remember the $168 billion original stimulus package? – That amount seems so little nowadays especially when Obama is bandying around an $800B to $1 trillion stimulus package. Add to that the $750B bailout package given to financial companies and automobile companies. This is a year of bailouts and stimuluses and so far they have not helped the economy. Instead, the state of the economy is at its worst at the end of 2008. The expected package by Obama will be an early focus of the Obama administration. I think most people could use an extra few hundred dollars in their pockets.

Pixar's Mater - Help me!!!
Pixar’s Mater – Help me!!!

5. The survival of American automobile companiesGeneral Motors, Ford Motor Co. and Chrysler became the poster child of the current economic crisis hitting main street. On display was the millions of jobs, especially blue-collar jobs, in America at risk of disappearing due to the recent decades of mismanagement, overhead and foreign competition of the US auto industry. With the finance industry easily getting a $750B bailout, it seemed absurd that an industry that for decades represented hard working Americans and unions had to literally beg for a few billion dollars to survive. It was obvious where the attention of politicians were. Although Bush recently said that $18B of the $750B bailout would be immediately used to prop up GM and Chrysler, the long fought battle was wasted time and energy by the attention garnering and bureaucratic Congress.

4. Bernard Madoff arrested on $50B Ponzi fraud scheme – When the $50 billion Ponzi fraud scheme by Bernard Madoff was revealed in early December, it was the main headline of major news websites for a mere few hours. Since then, as more details trickle out, the fraud continues to take a back seat to the macro-economic recession covering the globe. In any other year, the news of a legendary and consummate businessman (and a former NASDAQ chairman) being arrested for a fraud-scheme covering possibly the largest dollar amount in Wall Street history would ripple for weeks, if not months. However, with white collar crimes dominating the post-dot-com era (Enron, Worldcom, Martha Stewart, Tyco and the 2008 unraveling of the hedge fund industry), the public is now immune to financial fraud. Quite unfortunate. (See here for What is a Ponzi scheme)

Corporate bankruptcies on the rise in 2008.

Corporate bankruptcies on the rise in 2008.

3. Bankruptcies and those near it – It has been a sad year for many corporations as they head towards bankruptcy. Many of them well-known with years of solid profits. The list continues to grow and the impact of the recession on the consumer and his/her buying habits is only beginning. Circuit City, Linens ‘N Things, KB Toys, Frontier Airlines, Mrs. Field Cookies, Steve & Barry’s, Whitehall Jewelers, Mervyns, Sharper Image and Waffle House are some of the big name bankruptcies. And this list doesn’t even mention financial companies, which I discuss in #2. See this list for a more comprehensive list of corporate bankruptcies in 2008.

2. The demise of the hedge fund and mortgage finance industry – The derivatives market has become a multi-billion (if not, trillion) dollar investment industry that is complicated and largely misunderstood, even by the most astute financial advisors. Derivatives, as its name suggests, are investment products that are created off of actual traditional investment products. That means their intrinsic value is conjured up and their existence puts them closer to full-blown gambling. The current financial laws and oversight are not suited for such trading. Over the years hedge funds and derivatives took on more and more of the investment strategy of major financial corporations. Derivatives that were based on risky mortgages and insurance eventually collapsed as housing prices plummeted with lendees’ inability to pay the mortgages. The result has been a credit lockup unforeseen in decades. Major financial companies toppled and its effects are still not fully known. Major companies that totally collapsed include Bear Sterns, Lehman Brothers, Washington Mutual, ANB Financial, Fannie Mae, Freddie Mac, and AIG.  See this list for a more comprehensive list of financial collapses in 2008.

KBW Philadelphia Bank Index - Collapse since 2007

KBW Philadelphia Bank Index - performance since 2004

US Recessions since WWII (Courtesy of CNN)

U.S. Recessions since WWII (Courtesy of CNN)

1. Recession or Depression – Which leads to the number one financial news in 2008. Are we in a deep and difficult recession or a depression? In early December, it became official that the U.S. went into a recession in December 2007. To some analysts, this is good news because it means we are closer to coming out of it.  As you look at the chart on the right, most recessions last around one year. Based on the official Dec 2007 start date, historically we would already be on the tail end of the recession. However, to other analysts, this is bad news because the worst is yet to come, and we are already twelve months into it. With no light  seemingly at the end of the tunnel, these analysts portend a long recession. Bad news from around the world keep coming in and the bottom of the current economic crisis still has not occurred. Oil prices continue to drop, gold prices have since rebounded (bad for economy), and the dollar index has begun dropping again. Signs of major inflation on the horizon are evident, especially with the massive bailouts and the Feds lowering the overnight interest rate to its lowest level ever, 0%-0.25%.

The entire 2008 Top 10 in Finance is all bad news. Most of them have to do with the current economic crisis. The key hope is that the Bush administration is finally over and 2009 brings a more adept and intellectual administration that will do just about anything to get America out of the economic dump. An administration that seems focused on the middle class and job creation. However, with it comes more and more national debt and the mortgaging of the future. There seems to be no alternative. This will most likely lead to long-term inflation when countries such as China, India, Russia and other Asian countries continue their rise to redefine the existing  economic world order. This is not to say that the United States is doomed to be a second-bit player, as we know that is unlikely. However, the country needs to refocus on what made it a superpower in the first place, investments in technology, jobs, science, and innovation.

Posted in Economics, List, Opinion, Other, Poll, Reviews | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 3 Comments »

Who has been the worst vice-president or vice-presidential candidate in recent years?

Posted by silentarchimedes on October 3, 2008

With so much negative attention on Sarah Palin and her obvious lack of experience, it’s time to take a look at who is the worst vice-president or vice-presidential candidate in recent years. Here are the four candidates.in chronological order. Please vote who you think is the worst in the poll.

Dan Quayle

Dan Quayle

1. Dan Quayle – George HW Bush’s VP (1988-1992) – Quayle was intellectually incompetent and had the foot-in-mouth disease. Po-tay-to, po-tah-to, either one is fine. But potatoe?? What about Quayle comparing himself to JFK during the election campaign? Other funny sayings? “We don’t want to go back to tomorrow, we want to go forward“, “The future will be better tomorrow“, “I love California. I practically grew up in Phoenix“, and “It’s time for the human race to enter the solar system“. Although the country mostly knows him as the vice-president, another interesting question that needed to be asked, what were the people in Indiana thinking electing him to the House in1976 and 1978, and Senate in 1980 and 1986?

Vice Admiral James Stockdale

Vice Admiral James Stockdale

2. James Stockdale – Ross Perot’s running mate (1992) – Stockdale infamously opened the VP debate by saying, “Who am I? Why am I here?” Initially, the rhetorical questions drew applause from the audience, [4] seeming to be a good-natured acknowledgment of his relatively unknown status and lack of traditional qualifications. However, his unfocused style for the rest of the debate (including asking the moderator to repeat one question because he didn’t have his hearing aid turned on) made him appear confused and almost disoriented. An unflattering recreation of the moment on Saturday Night Live later that week, with Phil Hartman as Stockdale, cemented a public perception of Stockdale as slow-witted. He was also often parodied for his constant use of the word “gridlock” to describe slow governmental policy. As his introduction to the large segment of American voters who had not previously heard of him, the debate was disastrous for Stockdale. He was portrayed in the media as elderly and confused, and his reputation never recovered. (source: Wikipedia)

Richard Cheney

Richard Cheney

3. Dick Cheney – George W Bush’s VP (2001-2008) – The ultra-hawk who is more inconspicuous than Ed Harris as a sniper in Enemy at the Gates. Actually, Cheney’s head is just a rounder version of Harris’. Cheney acted like a sniper, incognito, firing barbs from behind the scenes, or inside a bunker. Round after round of incidents, Cheney appeared impervious to controversy. He weathered the weak WMD evidence for attacking Iraq, the CIA leak scandal, the hunting incident, CDC global warming testimony deletions, health problems, and completely elitist, hawkish comments. Both supporters and detractors of Cheney regard him as a shrewd and knowledgeable politician who knows the functions and intricacies of the federal government. This is a major contributor to him weathering controversies.

Sarah Palin

Sarah Palin

4. Sarah Palin – John McCain’s running mate (2008) – Blunders, lies, inexperience has made Palin the butt of many jokes, especially on Saturday Night Live.

Posted in Opinion, Politics, Poll | Tagged: , , , , , , , , , , , | 1 Comment »

U.S. economy in major trouble

Posted by silentarchimedes on September 16, 2008

US Economy in Turmoil

US Economy in Turmoil

Most people in the country still have not felt the impact of the economic troubles, but make no mistake, the economy is teetering on the brink of a major crisis. When financial stalwarts like Bear Stearns, Merrill Lynch, Lehman Brothers, and AIG collapse, you know something is brewing. The last two recessions, both during the two Bush presidencies, never saw the collapse of major corporations. What most economic followers know is that they should have. Instead of letting the recessions naturally play out, the Bush administrations and the Greenspan Feds interfered too much by playing with our futures for the sake of the present. The early 1990s recession ended because of a huge increase in credit card use and personal loans. The early 2000s recession ended because of easy access to home mortgages and personal loans. Both recessions saw a huge infusion of dollars onto the world markets. Both of them are now biting us in the butt. This is a major credit crisis on our hands. The government must let it play out. Another band-aid and we will just have a more devastating crisis in the near future.

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