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January 11, 2009

Human Nature

The best definition of Human Nature I’ve seen is from Webster’s Collegiate Dictionary, “n the nature of man: as a: the complex of behavioral patterns, attitudes, and ideas which man acquires socially b: the complex of fundamental dispositions and traits of man.”

 

I personally have used the term all the time to describe a negative action or an expression by others which seemed unusual to me and those who had witnessed or those who had been on the receiving end of such an act or expression. The only time I have heard anyone else use the term was when describing a negative event perpetrated by an individual. This realization has brought me to this writing. I believe the definition needs to be rewritten to include acts of kindness or positive interaction. When describing negative acts or negative interaction the word inhuman must be used. 

 

The events in today’s world are so complex that human nature has no positive definition. If we are to define it today based on the events now taking place locally and around the world we would certainly express the negative. Was it human nature that launched missiles’ from Gaza to Israel or Israel to Gaza? Was it human nature that embezzled 50 billion dollars from unsuspecting investors? Was it human nature that caused the collapse of the financial systems in the United States and the World? Was it human nature that approved mortgages to unqualified individuals? Group motives and objectives had everything to do with the above behaviors of the few and not the majority. No individual can cause the results we are experiencing today. No one person can be blamed but that persons can be singled out as a contributor to the group’s action.

 

If we as individuals allow ourselves to be part of a group who’s objectives and motives are less than admirable than we are guilty of violating the positive concepts of human nature separately and as a group. The term human nature used in the context of a description of negative acts or interactions tells the reader that the act is excusable or forgiven when it really isn’t. The term inhuman must be used to describe those acts and interactions which are less than admirable.

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December 20, 2008

The Bush Legacy

 

 I am amazed at the republican rights’ trying to build a positive image of the Bush Legacy after eight years of failure. Lets’ add up the republican conservative non intervention of government, deregulation, and any other right wing terminology which would define the Republican Administration destruction of the American way of life and dream.

 

Recently a slew of executive orders favoring multinational corporation to add to the destruction of the ozone layer, and continuing of our dependence on fossil fuels. More than 750 billion to Wall Street and National Banks, over 125 billion to AIG American International Group, with no conditions I may add, and 14 billion with conditions to take power away from unions and to seize limited  control of the three auto makers in this country so that foreign auto makers producing in America have a better advantage.

 

I know he was elected the president of this country but by his acts he represents the ultimate special interests, which leads me to the main point. Puppet W reminds me of Howdy Doody.  If you remember Buffalo Bob always pulled the strings. Does anyone think that W is capable of making a decision worth any value. He was a man over his head with very little ability to make rational choices. He was incapable to distinguishing between justice for all and just this for the few. He fertilized the greed mentality over the last eight years which has placed us in the crisis we are in today. His organization rivals any organized crime organization since the 20’s. He and his cronies have looted America.

He has violated his oath of office and should be punished for it. There is no excuse for what he has done.   

 

 

December 5, 2008

Bailouts- The Cost to Americans

Today is December 5th, 2008 and the Labor Department has reported that an additional 533,000 jobs have been lost in November increasing total losses for the year to 1.9 million. This brings unemployment to 6.7% as reported.

 

I have always questioned the statistics being reported for one reason. During my unemployment period from 1989 to 1991 and after six months of unemployment compensation what statistic did I fall under for an 18 month period when I didn’t receive any benefits? I was unreported.

 

I must question the approach to the initial stimulus and the recent 700 billion bailout package. We all know that Washington D.C. is the address for special interests and influence peddling. Lets first look at the Stimulus package earlier this year February 13th when the Bush, Chaney brain trust attempted an infusion of cash to the American public in hopes that we would spend or pay down our debt. This package was 152 billion dollars which included the approval of Fannie Mae and Freddy Mac limit increase on the number of mortgages they could purchase.  The Fannie Mae, Freddie Mac problems go back to 2005 Ronald D. Utt, Ph.D.  wrote Time to Reform Fannie Mae and Freddie Mac he summed it up as follows the major problems is “Although management’s unearned bonuses have generated most of the headlines, the real cost to the nation is not the tawdry looting of the company by its top management team. The real problem is the concentration of risk in the hands of two massive and privileged companies that now dominate America’s housing finance markets.” Hence their buy out when mortgages continued to default at an alarming rate by the U.S. Government sanctioned by Hank Paulson at the bequest of leading corporate CEO’s and CFO’s of all your major Banking and  Investment Banking Firms. The risk associated with these mortgage backed securities had been repackaged over the years into various forms of derivative products and sold to worldwide financial institutions. When the cash flows from mortgage backed securities ceased the cash flows on these derivative products could not be met. Subsequently, capital requirements governing these financial institutions could not be met because of two reasons. They were short the cash and the value of their assets and derivatives were becoming worthless. The administration publicized that there was a credit crunch. In realistic terms there was no cash to lend out. The money pit was dry because the corporate officers and traders around the world siphoned all the cash off the top in the form of performance bonuses based on theoretical mark to market pricing of securities. This was the method of looting. 

 

The second bailout of 700 billion although an attempt to fund these cash flows is just a drop in the bucket. It is unknown the value of the derivatives and the underlying asset cash values in this entire mess. The attempts are to throw enough cash around to re establish a credit market. This approach has guaranteed major depositor balances to prevent a run on the banks. It also protects the wealth of those who created this mess sanctioned by our outgoing administration and their supporters. Recently, you have heard some commentary that we need to bail out those mortgages being foreclosed on. Not to be critical of their thought process, but I always thought that you attack a problem at the source to fix it. Wait, they are Wall Street and Banking who loosened the rules for profits and bonuses. My point is that if these institutions wanted to help the common man they would refinance any troubled mortgage at lower rates and extend the amortization periods where their monthly payments would be affordable with no exceptions even if it takes 60 years. By than the markets would have stabilized, hopefully with in the next 10 years, and just possibly housing prices would have reached the same price level of this last surge therefore eliminating short sales. Than again there wouldn’t be too much profit in it for them?

I learned one thing many years ago in my economics classes, for every winner there is a looser in a transaction, in this crisis the common man is the looser and he didn’t even trade. What he is loosing is as follows: his home, his job, his savings, his family and finally his faith in his government to protect him from foreign and domestic enemies.

October 20, 2008

Insurance, a tool for risk management

Re: If you can’t take the risk, get out of the market- 10/17/2006

 

When I first read the heading I presumed the opinion was concerning the Stock Market. After reading it I realized that Ms. B was speaking to Real Estate Investment. I also realized that Ms. B doesn’t know the first thing about the functionality and concept of insurance and its purpose in society. Insurance was designed to assist individuals or companies in case of catastrophic events. The premiums paid for this guarantee were to be invested and held in reserves to pay claims if such events did occur. These premiums were calculated by actuarial therefore to protect the insurance companies from excessive claims. They did this by spreading the risk over the population of all policyholders nationally. So if a flood devastated a resident in New Jersey our premiums would help them, or if and earthquake in California devastated a resident in San Francisco our premiums would help them. One event occurred which upset the Insurance Industry in Florida. Homestead, they found that the claims for this catastrophic event were cutting into their profits and their reserves. The shareholders were going to possibly loose dividends and the value of their shares would drop especially if the company showed a loss. So to avoid such a catastrophe at company headquarters, Florida State lawmakers were lobbied to change the laws governing Insurance Companies. Our State Representatives including our Attorney General and Governor at the time turned the other way and let the insurance companies form separate corporate entities in Florida. This change in law reduced the number of policies funding reserves to cover catastrophic events in Florida. This change would limit the risk of the insurance companies and preserve their profitability.

Premiums were not artificially low for decades they were low because the risk was spread nationally. They are currently high because the lobbies transferred the cost of providing insurance to the people and the State of Florida, Citizens Insurance. You shouldn’t be condemning the hard working residents of this state you should be condemning your representatives who caved into the Insurance Companies lobbyists.  

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