Tuesday, March 31, 2009

Good Works in Ukraine

My niece, Jessica has been in the Ukraine for several years now, and I thought I would add this to my blog as she is looking for financial help for her school where she teaches. Jessica is not only a Peace Corps Volunteer, but she is a writer too, and it is enjoyable reading about her experiences. She is from Loveland Colorado, and she blogs about her experiences in Loveland's local newspaper the herald. The link is below. I would bookmark it so you can read about her experiences.

This is what she recently wrote (links follow):

Me: You know I don't like to eat the organs of the animals.

My teacher friend: Well, the pancakes (malincy) that I made a few weeks ago had the meat of hearts and livers in them.

Me: I ate hearts and livers?

 I've done things here so outside my normal comfort zone (sometimes unintentionally) that I'm not sure I'll find my way back to the same place. Nor would I want to. I'm living in Ukraine as a Peace Corps Volunteer.

 I'm sending this to everyone in my contact list. And since this is Gmail, this means that whether you be friend, family member, acquaintance, someone I might have applied to about a job, or a representative of the International Remittance Department who has notified me of the $25.5 million sum I'm due to inherit from Nigeria, you are receiving this letter because I'd like your help.

 For those who don't know, I'm a Coloradan who joined the Peace Corps September 2007 and committed to two years and three months of service teaching English to Ukrainian children. I trained for the first three months in a village and then was sworn in as a Peace Corps volunteer and moved to my permanent home, Koziatyn, where I started working as a teacher. I have enjoyed my experiences here. Well, almost all the experiences. Maybe not the ones where I'm frightened out of shops by scary store clerks or when I'm harassed by bums at the train station, saved by little old ladies, and then asked for two hryven because their feet hurt. But even those moments I take in stride now, because I'm a volunteer, and this is my home for the time.

I have an irreplaceable counterpart (my main Ukrainian contact at school), a lovely host family who I stayed with those first three months and still go back to visit, amazing Ukrainian and American friends, and, most importantly, my adorable kids. (The ones who listen to me). I teach English classes to fifth grade to 10th grade in school number five in a city called Koziatyn.

My fifth forms are precocious and active, not necessarily at learning English, but at least still interested in me. Every day when they see me, they run up and ask in Ukrainian, "Will you be with us today?" I used to answer automatically in Ukrainian, but now I ask them, "How do you say it in English?" which stumps them but they repeat after me and are starting to remember it. My sixth forms also do their best. There are about five or six girls who shake their arms wildly to answer and sometimes I have to shush them. My seventh and eighth forms like to push the limit because I'm not as interesting to them anymore. I feel accomplished only sometimes. I've been teaching my own curriculum on the U.S.A. with the ninth form (because according to the national curriculum, they are supposed to spend several weeks on the U.S., yet there is little information in the book). A few weeks ago I brought the ingredients for burritos during the talk on American food, and they loved it. My tenth form is strong but getting lazy and I'm working harder to push them to do their homework.

 And on to the point: I could use some help. We
would like to get some better English textbooks in the classroom. I can't stress enough how frustrating it is sometimes to teach with some of the books. We want to buy some great British series' that engage the children, and have better texts and activities than most Ukrainian-authored books. In addition, when I went home for Christmas, I recorded videos in different scenarios. I'm editing them into educational videos to show in the classroom, to go along with the more difficult books. I'll have some of the kids help me, so that they can take ownership of the project as well. The teachers need a way to show these videos, as well as other English movies and presentations, in the classroom so we'd like to get a computer projector and a white board. The whiteboard would be a godsend because 1) their chalkboard is ancient and doesn't work well and 2) we will be able to project onto it.

 I've applied for a Peace Corps Partnership grant which enables me to partner with all of you in helping me to expand the English department resources. Peace Corps has set up a Web site link for me at https://www.peacecorps.gov/index.cfm?shell=resources.donors.contribute.donatenow. Search by country of service, Ukraine, and the results show up below. Click on 'Benes J'.  There you can read another description of my project. It would be such a help to us if you visited the link and donated (tax-deductible) to help my kids get more excited and interested in English! This is the reason I'm here.

 Here's a note from my counterpart, Natalia Frantsivna Mochalova:

Among my personal goals in teaching my pupils is comprehensive skills development and learner development. I try to use authentic materials, to choose information related to the students' own world, to give them all possible images of English-speaking countries. Students are encouraged to develop as independent and active learners of English. This will make them better students throughout their further education. Students try to do the best when they are involved in the process of studying, when they are dealing with meaningful and interesting content.

 I have begun to notice that pupils are bored at school in the last few years. They can use the computers, they can learn more about the world from other resources not at school. That is good, but I think it would be a great contribution in their education to develop their skills, to show them the possibilities and an awareness of other cultures. The modern lessons must be interesting, informative and well-equipped. That's why the communicative textbooks, a projector and computer programs would be so useful.


Natasha (Natalia – she's referred to as both) and I are so thankful for your help. Also, I'm always so encouraged by all of you for posting comments on my blog , writing me emails, or just thinking about me.

 Sincerely, Jessica Benes

Peace Corps Volunteer, Group 33

Koziatyn, Ukraine

Blog: http://www.reporterherald.com/blogs/blog.asp?bid=10902

Saturday, March 28, 2009

Lovell Mixon - A Cold Blooded Killer


I will not provide a link to the group responsible for organizing the protests in Oakland praising Lovell Mixon for the killing of four police officers. Disgraceful doesn't even begin to describe the actions of these individuals who elevate a cold blooded killer to the position of sainthood. There is no difference between them and the Muslim fanatics who praise suicide bombers.

Where are the Jessie Jackson's and the Al Sharpton's of the world condemning the actions of this group?

Lovell's sister says the killer of these four police officers is not a monster. I beg to differ. Anyone who shoots officers, and then returns to execute them, and anyone who rapes little kids is a monster. The only response I have to the actions of these idiots is a short clip I remember in an art class I took in college. This is what I think should be done to these protesters.


Friday, March 27, 2009

Obama and invasion of privacy

The Democrats have always been vociferous about invasion of privacy. There cannot be anything more outrageous, more invasive than this. This is government expansion at its worse

Tuesday, March 24, 2009

Elections in El Salvador – What they mean.

This is an in depth analysis of what the recent elections in El Salvador mean to the United States. I have broken down this piece in segments so it is easier to digest. While the United States is embroiled in made up controversies with the AIG bonuses, and while Barack Obama spends trillions of dollars in vain attempts to try and reignite this economy, there is something nefarious going on in Central America and throughout Latin America. In the late 70s and 80s, Nicaragua and El Salvador were frequently in the headlines because they represented the frontline of the cold war in Latin America. These countries were the bastions of Marxist-Leninist thought. Unlike Nicaragua, the 12 year civil war in El Salvador which began in 1979 and killed 75,000 people did not topple the government. However the 1992 ceasefire did begin a two decade long political battle for the soul of El Salvador that finally ended in victory for the ultra-leftist socialist party. Americans do not think what happens in these countries will ever affect America, but they are mistaken, and we better start paying attention.

Although the focus of this piece will be on El Salvador, the recent events in Nicaragua will help to understand what is going on in El Salvador and what it means to the United States. Both El Salvador and Nicaragua are following parallel paths.

Sunday, March 15, 2009 elections were held in war-torn El Salvador between the leftist candidate Mauricio Funes , the candidate for The Frente Farabundo Marti para la Liberación Nacional, (FMLN) and Rodriguo Ávila of the conservative party La Alianza Republicana Nacionalista, (ARENA). Funes was swept into power with 51.27% of the vote. So why is this so important? And why should this be an important event to Americans? This is what I will attempt to discuss.


The Frente Farabundo Marti para la Liberación Nacional, (FMLN) was created in 1980, through the fusion of five revolutionary Marxist-Leninist guerrilla groups. The FMLN was named after Agustín Farabundo Martí (1894 – 1932) who was an avid supporter of Leon Trotsky and who helped found the Central American Socialist Party in 1925. Martí joined and later broke with Sandino (the patron saint of the Sandinistas of which Daniel Ortega is the head) in his struggle against the U.S. in Nicaragua. Martí was the symbol of the revolution in El Salvador.

The FMLN in El Salvador preached Marxism-Leninism as did the FSLN in Nicaragua. Since the peasant population of El Salvador and Nicaragua remain predominately Catholic, poor and illiterate, the FMLN needed a method to disseminate its propaganda. Exit stage left - the Catholic Church. The FMLN used the Catholic Church by mixing Marxism-Leninism using progressive priests to reach the poor and impecunious peasants to spread its message. The tool they used was "liberation theology" The message was that Christ came for the poor, and it was the duty of the poor to overcome his oppressor – the rich "The class struggle is a fact; neutrality on this point is simply impossible "one liberation theologian wrote. It worked. Peasants began joining the ranks of the FMLN especially after the infamous death squads and corruption of the right wing.

As the internal ideology of the organization began to take shape, the FMLN formulated its position in Estrella Rojo:

The fundamental revolutionary objectives of the working class are 1) the liberation of the country with respect to imperialism, 2) the liquidation of the political and economic power of the landholding oligarchic bourgeoisie and of the bourgeoisie in general, and 3) the liquidation of the regime and the establishment of popular power (FPL, 1973).

Like the FSLN, The FMLN aligned itself with both Cuba and the Soviet Union.

For two decades, the FMLN has been gaining power in El Salvador, but this is the first time, the FMLN has won the presidency. 49 year old Mauricio Funes will be the first civilian president to have run for president from the Marxist-Leninist revolutionary party since its 12 year war 1980-1992. Since the ceasefire in 1992, the FMLN has thrown off its revolutionary past and now describes itself as a social-democratic party, but this change has only been to gain political favor.

Rep. Diana Rohrabacher (R-CA) said

The fact is that what happens in this election will have impact on our relations, and it is not just something that the people can elect an anti-American government and expect everything to stay the same.

www.hertiage.org stated the following:

Several members of the U.S. Congress expressed deep concerns about the FMLN's violent, revolutionary past and its relations with terrorist organizations such as Colombia's FARC guerrillas and to Venezuela's populist, anti-American president Hugo Chávez. Members of Congress warned that if the FMLN aligned itself with designated sponsors of international terror like the FARC, such actions would have an adverse impact on remittance flows and the renewal of Temporary Protected Status in 2010.

The Palestinian Liberation Organization, (PLO), Hamas, and the Frente Sandinista Liberación Nacional, (FSLN),
have all tried to gain legitimacy through the ballot box after dubious pasts. The Frente Farabundo Marti para la Liberación Nacional, (FMLN) is attempting to do the same. In all cases, the anti-American American activities continued under the radar.

The relationship between the FSLN (Nicaragua) and the FMLN (El Salvador)

November 5th, 2006, Daniel Ortega becomes president of Nicaragua once again in a quasi-legitimate election. He was determined not to lose the election like he had the previous three elections, so he devised a scheme with the opposition, the liberal party. Arnoldo Alemán, the ex-president of Nicaragua was currently under house arrest. In backroom deals commonplace in third world countries, Ortega made a deal to free Alemán and split the Liberal Party. By splitting the liberal party, Ortega could win the presidency with a lower percentage of the vote. He won by 38% of the vote.

When Nicaragua elected its Marxist-Leninist president, Daniel Ortega, head of the Frente Sandinista Liberación Nacional., (FSLN) I wrote a piece entitled Deconstructing Obama. In it I wrote the following:

Nicaragua represented one of the last remnants of the cold war. The 1972 earthquake that leveled the capital of Nicaragua, Managua marked the beginning of the end for the Somoza regime in the country. A growing discontent among the Nicaraguan people prompted the then fragmented anti-Somoza factions to coalesce helping the Frente Sandinista , (FSLN) led by Daniel Ortega to gain strength and the populace to begin an active rebellion against the Somoza regime. The Sandinistas gained power as a direct result of the Carter administration's funding of the Sandinistas. In July 1979, the Sandinistas entered Managua, and Somoza fled the country. Nicaragua, a former ally of the United States, quickly aligned itself with Castro's Cuba and Communist Russia. A former friend of the United States was now a bitter enemy. The Sandinista regime destroyed any remnants of Nicaragua's economy. Part of Ortega's success and rise to power came from promoting and advocating a philosophy of Marxism-Leninism mixed in with a perverted form of Catholicism called "Liberation Theology."

Ortega has replaced the Soviet Union with Iran as I discuss below, and his anti-American activities have continued. Some would like to portray him as a moderate. Ortega began to mollify his radical rhetoric in favor of a more moderate form of socialism but his Marxist-Leninist ideology remains intact as does his quest for power as evidenced by his the stratagems he used to win the presidential and municipal elections. Since Ortega's election, the Marxist-Leninist leader has been anything but moderate.

Ortega needed to retain control of Managua and the Sandinista candidate and former boxer Alexis Arguello was losing to the opposition party's candidate Eduardo Montealegre so Ortega sent out his thugs. Ortega's supporters and cadre of friends were spotted throughout Nicaragua. There were reports of violence, harassment of poll watchers, mobilization of mobs to intimidate voters, stuffing of poll boxes. He effectively eliminated two opposition parties before the Municipal elections, and he did not allow outside observers to monitor the elections. Ortega effectively stole the election.

Nicaragua and Iran

What is disturbing is the relationship between Iran and Nicaragua. On the Atlantic side of Nicaragua live the Mozquito Indians . Only 10% of Nicaraguans live there. The Mozquitos speak their own language and even have their own elected chief. The Mosquito Coast is isolated from the main population of Nicaragua. It is a sparsely-populated region of jungles and swamps and provides easy cover for nefarious activities. Monkey Point is located here and is the site of activity from the Iranian military.

As the San Antonio News reported:

As part of a new partnership with Nicaragua's Sandinista President Daniel Ortega, Iran and its Venezuelan allies plan to help finance a $350 million deep-water port at Monkey Point on the wild Caribbean shore, and then plow a connecting "dry canal" corridor of pipelines, rails and highways across the country to the populous Pacific Ocean. Iran recently established an embassy in Nicaragua's capital.

Ahmadinejad was present at the inauguration of Daniel Ortega and their relationship remains very close. When Ortega came to power the first time in 1979, he allied himself with Cuba and the Soviet Union. These two countries supplied him with copious amounts of money which he used to strengthen his military and build up an arsenal of weapons. Ortega remains an avowed enemy of the United States, and is now using Iran as its ally in its war against the United States.

Ortega believes in radical revolutionary change with Marxism-Leninism as its core. He therefore is enamored with Obama. Before the election, Ortega said the following:

"It's not to say that there is already a revolution under way in the U.S. ... but yes, they are laying the foundations for a revolutionary change."

Ortega's favorable opinion of Obama will not stop the Iranians in Nicaragua. It was Jimmy Carter who helped Ortega gain power in the 70s, and that didn't stop Ortega from pursuing his anti-American policies. Ortega believes in power, and like Hugo Chavez sees the United States as the imperialist that needs to be brought down.

Todd Bensman of Pajama Media travelled to Nicaragua to report on the Iran and Nicaraguan connection:

I found that no Iranian money or concrete planning had materialized for a promised new $350 million port on the eastern seaboard bay known as Monkey Point. The Iranians had only made at least a couple of easy day trips there and elsewhere around the country aboard helicopters. Neither had anything developed from Iranian promises to redevelop the dilapidated western port of Corinto, which supposedly would be linked to this Monkey Point port by a dry land canal. To date, no progress on either project has been reported. But the Iranian diplomatic mission that American national security experts most feared was sure up and humming with activity. It has steadily expanded its "staff," according to some scattered local Nicaragua news reports.

I also discovered that suspected Iranian Revolutionary Guard operatives had been moving in and out of the country in unusual ways that assured secrecy. For instance, I was given ministry of migration documents that show a senior Nicaraguan minister had allowed 21 Iranian men to enter without passport processing. This was exactly the kind of activity that preceded the Argentina bombings in 1992 and 1994. It's the same kind of secretive movement going on in and out of Venezuela that gives current and former American counterterrorism officials — and Jewish communities in the region — the cold sweats.

In other words, Iranian Revolutionary Guards are in Nicaragua, and we should be concerned.

In Argentina, Iran used Hezbollah to blow up the Israeli embassy and a Jewish center killing 85 people and wounding many more. Argentina Still has outstanding arrest warrants for top Iranian officials and Revolutionary guards. .

Iran has also been in countries like Bolivia and Venezuela, but now the presence of the Iranians are much closer to our border. Given the chance, the Iranians will also set up shop in El Salvador.

Mauricio Funes

Funes graduated from the "Colegio Centroamericano" where he studied philosophy and economics. His work after graduation was primarily in Journalism where he hosted local news shows critical of previous governments. During the Salvadoran Civil War, he interviewed many of the leftist rebels. It was from his association with these rebels that formed his left-wing ideology.

Funes campaigned as a moderate interested in social-democratic policies in the mold of Brazil's Luiz Inácio Lula da Silva. The Salvadoran people liked his campaign rhetoric of "change." The opposition ran a relentless media blitz trying to instill fear in the people by showing them how Funes would turn El Salvador into a communist state, and that he would sell its very soul to Hugo Chávez. Arena portrayed Hugo Chávez as the future owner of El Salvador.

"Everything has changed. The FMLN has changed. People's perceptions have changed. Conditions have changed," said Funes

Funes' strategy was to direct his attention towards the north, "I want Central American integration and relations with the United States" he said. In his campaign, he attempted to distance himself from Hugo Chavez. In the end however, distancing himself from Hugo Chavez will be difficult indeed. FMLN mayors own a company called Alba Petróleos. Venezuela sells the company gasoline and diesel and a discounted price. The FMLN has been awash in cash as a result, some have said to the tune of 60 million dollars. This has gained them a clear political advantage in the elections.

Moreover, even if Funes describes himself as a moderate, his vice president Salvador Sanchez Céren is a hard-liner. Salvador Sanchez Céren has the blood of many on his hand and his responsible for ordering the assassination of 1,200 to 1,500 people including torture as a method of interrogation. The Washington Times reports:

One of the favorite interrogation techniques was to bludgeon presumed enemy spies with wooden clubs. They first assaulted their arms and legs, brutally breaking them in futile attempts to get them to talk – futile because they had nothing to confess. Eventually, they realized there was nothing forthcoming and they turned their clubs on the victims' skulls, beating them until they succumbed.


These were not ordinary murders; they were committed by guerrillas against other guerrillas on the orders of the commanding general in the San Vicente region, known in the FMLN as El Frente Para Central (The Auxiliary Central Front)

Funes has promised to raise taxes on the rich for better social programs, including rural health care and crime prevention. El Salvador experiences the highest murder rate in the world. Approximately 30% of El Salvador live below the poverty line, so this kind of populist rhetoric is appealing.

Funes' first order of business was to reestablish relations with communist Cuba and its dictator Raúl Castro after five decades of no relations. El Salvador cancelled diplomatic relations with the government of Cuba in 1959 when Fidel Castro took power.

Funes told Megavision television

Nothing traumatizing is going to happen here. We will not reverse any privatizations. We will not jeopardize private property. There is no reason at this moment for fear."

Of course one has to wonder what he means by "at this moment." Presently, Mauricio Funes is an unknown on to how he will govern. What is more of a concern is not how he will govern El Salvador, but what his relationship will be with the United States. He has already said that he wants to have an amicable relationship with the United States, and he wants to be trading partners. What will his relationship be with Hugo Chavez and Mahmoud Amadinejad? Chavez has already infused the tiny country of El Salvador with copious amounts of cash. He will expect payback. And, what about Iran? Will Iran spread their influence to El Salvador like it is doing with Nicaragua? Will we even care?


The victory of Funes represents one more victory in a string of leftist victories taking place in Latin America by former guerrillas. The FMLN wants to portray itself as a moderate party; left of center, but its leadership is comprised of unrepentant ultra-left Marxist-Leninist rebels. The Vice-President Salvador Sanchez Cerén is no moderate and also a former guerrilla. Funes has begun relations with Cuba and it is only a matter of time before Iran tries to spread its influence into the country. Funes stated he would not be beholden to Hugo Chavez but this may have been campaign rhetoric. Chavez holds the purse strings, and to think Chavez will not want payback seems rather foolhardy. Chavez's influence in Central America is growing. Nicaragua is receiving 60%-70% of its annual crude oil from Chavez, and the program allows Ortega to pay only half the bill. Chávez's influence in El Salvador and Nicaragua is undeniable. Hugo Chavez's goal is hegemony over both Central and South America.

Barack Obama's understanding of the terrorist threat seems dubious at best. He won't use the name "enemy combatants" to describe former terrorists who were caught in battle. He sends videos to Iran in vain attempts to communicate to the Iranian leaders while the country continues to advocate the destruction of Israel and deny the holocaust. He gives legitimacy to the terrorist organization Hamas by trying to include them in Palestinian peace talks. This is no different than what Bill Clinton did with Arafat and the PLO. So, if we have terrorists roaming around El Salvador or Nicaragua why would we believe Barack Obama would do anything?

When we do have friends in Latin America, we snub them as Nancy Pelosi did with Colombia. Nancy Pelosi has continuously tried to stop free trade with Colombia. The Washington Post in their report, Drop Dead Colombia states:

THE YEAR 2008 may enter history as the time when the Democratic Party lost its way on trade. Already, the party's presidential candidates have engaged in an unseemly contest to adopt the most protectionist posture, suggesting that, if elected, they might pull out of the North American Free Trade Agreement. Yesterday, House Speaker Nancy Pelosi declared her intention to change the procedural rules governing the proposed trade promotion agreement with Colombia. President Bush submitted the pact to Congress on Tuesday for a vote within the next 90 legislative days, as required by the "fast-track" authority under which the U.S. negotiated the deal with Colombia. Ms. Pelosi says she'll ask the House to undo that rule.

When we do this, countries like Venezuela move in for the kill. Will the Democratic Party ever wake up?

The MS-13 gang, considered to be the most dangerous gang in Central America, whose base spreads from El Salvador to Honduras, has received hefty sums to smuggle foreign born terrorists to the United States. What will Funes do about the MS-13 gang?

Barack Obama does have an opportunity . Obama should take Funes up on his willingness to trade with the United States, but in doing so, he should monitor El Salvador for activity by Venezuela, Iran, Cuba or other enemies of the United States. Mexico's president Felipe Calderón won by a scant one percent of the vote. It is very possible that Mexico can turn to a leftist president in its next elections especially since the drug cartels are expanding their reach. The left turn of Central and South America is a new reality we need to face. Latin America has become the new breeding ground for terrorist activities. We need to expand our influence throughout Latin America, and at the same time we should monitor the activities of foreign governments in these countries.

We know terrorists are entering the United States via Mexico. The 9/11 commission report warned that terrorists would find different ways to attack the United States. President George W Bush and now President Barack Obama refuse to send troops to the border even though it represents an unprecedented security threat. Will we wake up to the new reality that Central America and South America can become the new launching pad for countries like Iran in their pursuit to destroy the West?

Sunday, March 22, 2009

Is Anybody Listening?

A video on how the recession is touching high school students in Pomona, Calfornia.

I vehemently disagree with Barack Obama's policies, but when he saw this video, he included the students in his speech, and he subsequently visited them at Village Academy High in Pomona. I give credit where credit is due. This was impressive. He may have been doing it for political posturing, or he may truly care. Whatever the motive - it was still impressive. It had to mean something to the students. Imagine a sitting president visiting your high school from an uploaded video. This was definitely a good thing Barack Obama did (oooh it hurt to say that). He didn't have to do it.

Wednesday, March 18, 2009

I am not buying….

"If it doesn't make sense, it's not true" - Judge Judy

The stock market is up for the fifth day in a row, but I am not buying. In a bear market, there will always be bear market rallies. For years investors have been advised to diversify and to buy and hold in bear markets and in bull markets because this way investors purchase stocks at varying prices. In the long run, the investor should come out ahead so goes the conventional wisdom. This is advice that is not so easy to follow. Since July 2007, the market has lost 50% of its value, and every market class has fallen, (ie: stocks, bonds, real estate) except for cash. As companies continue to layoff, the economy continues to deteriorate, and the market continues to decline I suppose the advice would be don't worry, hold on, you can't time the market. In my opinion, that is just plain stupid advice.

Before the Dot-com crash, I was 80% in the market, and two months before the dot-com crash I was 80% out of the market. In other words, I missed most of the crash. I knew valuations were way too high, and I patted myself on the back for avoiding what could have been a train wreck. I have to admit I was lucky in timing it so perfectly. Then comes 2007, and although not as obvious as the Dot-com crash, there were still warning signs. When Bear-Sterns was purchased by JP Morgan, I should have completely exited the market. It was a harbinger of things to come. I also understood as we approached the election, if it appeared that Obama would win the election, the markets would react negatively. There was indeed an Obama effect. These events did come true, and the markets continued to tank. Instead of instilling confidence in the markets, Obama fomented panic. I did not exit the market at the right time, and like many I was hit by the downturn. I held on in the hopes of selling on market strength, but the market continued to plummet. I sold a considerable portion of my portfolio even though the market was falling, because I had no confidence in the current state of affairs and the incoming administration. By doing this I avoided continued deterioration of my portfolio.

I am now struck with a form of paralysis as to what to do now. This has never happened to me before because I could always anticipate that sooner or later the market would rebound. I see the market go up now, but there remains an uneasy feeling about the current state of affairs in which we find ourselves. We have a president whose radical left agenda includes totally reshaping America into a socialistic utopia. Obama's call for cap and trade, taxes on the rich, socialized health care, and the list goes on do not bode well for an economic recovery. And, if an economic recovery does take place, hyperinflation will set in from the massive spending and borrowing undertaken by our government. In the last five months, the money supply has almost tripled, 271%. The Fed is buying up another trillion dollars of treasury bonds to further expand the money supply. This will move the money supply up an additional 60%. Banks are not lending right now, but when banks do begin to circulate this money, the result will be double digit inflation. Inevitably this will halt any recovery and we will begin to see phase two of Jimmy Carter only worse – stagflation déjà vu.

Even Democrats are beginning to have reservations about Obama's big spending plan as reported by Politico:

There is rising doubt among Democrats — particularly moderates already concerned about the big costs and deficits called for in Obama's budget — that either Obama or Washington have enough bandwidth this year to stimulate the economy, overhaul the failed financial sector and move on to a far-reaching domestic agenda.


The latest illustration of the incompetence of this administration is the dog and pony show we are witnessing with the bonuses of AIG. We hear how outraged Obama and his cronies are with the paying of AIG's retention bonuses. The bonuses represent 1/10th of 1% of the total 170 billion dollar bailout. The only reason the administration is outraged is because there was an outcry from the public over the weekend. Where was the outrage in the 9,000 earmarks in the omnibus bill? Or where is the outrage with the Fannie Mae and Freddie Mac bonuses? The one problem with all of this hoopla is the congress and the administration knew all about it. Senator Chris Dodd inserted the following amendment into the TARP bill:

The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary

The adminstration knew bonus payments were going to be paid, and so they allowed them to be paid. if the administration were so concerned, why now? why didn't they question it at the time of the bailout? They knew about it. The payments of these bonuses were in the filings of AIG a year ago.

There are two things of note here 1) these are contractual obligations – since AIG did not claim bankruptcy, these contracts are still enforceable. AIG cannot just abrogate enforceable contracts without massive lawsuits and 2) these are retention bonuses. Retention bonuses are paid to keep employees from leaving in order to prevent work stoppage or retraining new personnel. The administration is feigning outrage to try and assuage the public fear and divert attention elsewhere.

In Actuality, there are 400 million dollars in bonuses that AIG intends to payout. In defense of the retention bonuses, CEO Edward Liddy said the following,

We have to sell 70% of our company." But to make those businesses saleable, "you have to keep the people in place.... If you don't use retention bonuses -- those people are some of the best in the insurance industry, they will go elsewhere and we won't have anything to sell ... and we can't pay back the federal government. We want to pay back the federal government.

I have been paid retention bonuses in the past, and retention bonuses are for the exact purpose stated by Liddy.

Obama has noted that his approval rating is dropping and his disapproval rating is rising as Rasmussen reports, so he intends once again (like he did last week) to appear on primetime to try and justify his actions. He seems to be doing a lot of that lately.
To do this, he intends to usurp American Idol angering many of Idol's fans including me. Tonight, he plans to be on Jay Leno. He sounds worried. Senator Chuck Grassley (R-Iowa) wants the recepients of these bonuses to commit Hare Kare and Congress wants to impose a 90% tax on said bonuses. But, this outrage is to cover up an even bigger sin by AIG.

The beneficiaries of the government bailout include according to the Wall Street Journal two dozen foreign and U.S. financial institutions. These institutions received $50 billion dollars. Foreign banks include Germany's Deutsche Bank AG and French bank Société Generale SA and Scotland Group. AIG has become a clearing house for these foreign institutions. Where is the outrage here?

The question should not be why did AIG pay retention bonuses? but the questions should be why did we bailout AIG to the tune of 170 billion dollars in the first place? and why are we bailing out foreign banks with the bailout of AIG? And why didn't tax cheat and treasury secretary Tim Geitner bring this up when he drafted the AIG bailout bill?

This AIG bailout and bonus outrage do not pass the smell test.

This could have been an opportunity for Republicans, but I am wondering if they have any "cojones" left. Many of the Republicans were complicit in this bailout and I do not hear the outrage from them. Have they learned anything?

The Republicans have an opportunity to return to their conservative principles, but I do not see anything as of yet. Barack Obama's approval rating may be declining, but if there is no viable alternative, will he be around for a second term? Why would I or anyone want to invest in this environment?

Where is the change?

Monday, March 16, 2009

The Fed is printing money.

Part one

Part two

Well, Ben Bernanke last night on 60 minutes confirmed what we all knew. While it is the job of the Fed to control the money supply, the Fed is printing money at an unprecedented rate, and the result will ultimately be inflationary. I had to rewind my DVR to hear him say it again. Imagine if you have a bank account, and you run short of funds. You call up your bank and ask the bank manager if he wouldn't mind just increasing your balance because you are short of funds. What do you think your bank manager would say? Well, this is what Ben Bernanke said the Fed is doing with these failed banks.

Moreover, Bernanke said it is not tax money? Hmmm, maybe not now, but it sure will be. There are two ways this will hit the average American. When there is too much money in the system, inflation occurs. Inflation is a hidden tax that eats at the purchasing power of your money. Second taxes will inevitably increase on everyone when the government cannot pay its increase debt from its massive spending.

"It's not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It's much more akin to printing money than it is to borrowing."

"You've been printing money?" Pelley asked.

"Well, effectively," Bernanke said. "And we need to do that, because our economy is very weak and inflation is very low. When the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation."

To say that we can have a recovery that does not involve inflation with the amount of money that is being added to the money supply is wishful thinking.

Ben Bernanke did say that one of the major reasons for the Great Depression was because of tight money, and he is right. I just wonder if going down the hyperinflation road of Germany's Weinmar Republic or Argentina is the right answer. The markets apparently liked Bernanke's remarks.

In any event, everyone should watch the 60 minute segment with Bernanke. Alan Greenspan never gave an interview during his tenure.

I do have one recommendation on investing at this juncture. Buy Treasury Inflation Protection Securities,(TIPS). The interest rates are low now but they protect against inflation.

Friday, March 13, 2009

California’s Foster Youth

There is much to dislike about the Foster Care system in California, but the proposal in front of California legislators, AB 12 will go a long way in alleviating one of the major pitfalls of the System . As a parent who has been involved with foster youth, and parents of foster youth, I have seen firsthand the downside of the system, but AB 12 could give foster kids a chance in life.

Imagine being on your own at the young age of 18. I came from a relatively stable home, and it was difficult for me. Foster kids tend to come from broken homes and go from foster home to foster home before the age of majority. At age 18, they are given the clothes on their back,left on their own to fend for themselves, and basically thrown to the wolves to see who can survive and who cannot survive. There are outside resources to help them through college, and there are programs such as The Independent Living Skills program which have proven to be beneficial, but still not good enough. These kids have no support group or no family to make sure they continue on the right path. As their 18th year birthday approaches, instead of looking forward to college, many become anxious and worry about the future. Even though legal, an 18 year old is naïve and understands little of the world. It is no wonder that few foster care children ever graduate from college. In fact, statistically it is between 1% and 5%. Many end up poor or in prison. Things may be looking up.

The other day, a foster teenager came to the door selling newspapers trying to collect money for college. I bought the newspaper only because he was a foster kid. After the initial period runs out, I intend to cancel the paper because I get my news over the Internet. I do not read the newspaper much. But if it helps foster kids, I do not mind shelling out a few bucks.

Currently at age 18, Foster kids "age out" of the system. This means stipends from the government stop, and the kids are left to fend for themselves. AB 12 will change that and if it becomes law will allow foster youth to remain in the system until age 21. Some states like Wisconsin, Illinois, and Iowa already have extended the "aging out" for foster youth with much success. Foster youth are three times more likely to attend college "aging out at 21" than if they "aged out" at 18. California may finally get something right.

The San Jose Mercury stated the following:

Currently, most youth "aging out" of foster care are bounced off state support at 18, a tender age for a vulnerable population that often has nowhere to go and no one to rely on. But an assembly bill written by Speaker Karen Bass, D-Los Angeles, and Assemblyman Jim Beall, D-San Jose, would draw on newly available federal funds to support relative caregivers and transitional living programs through age 21.

Former foster youth who gathered in the state Capitol on Monday in support of the bill described their loneliness and desperation as they entered the adult world with no money, no job, nowhere to live and, in many cases, no family or stable adults to rely on.

Many, if not most, foster youth depart from group homes or foster families with only a list of referrals and a bag full of their stuff. A lucky few may find an apartment in a transitional housing program, or get help applying for welfare benefits.

Wednesday, March 11, 2009

The Lights are Fading....

Salon.com is one of those far-left websites like moveon.org or mediamatters.org. So, when one of it's liberal contributors begins to recognize the recklessness of the Obama administration, one has to wonder if the lights are beginning to fade.

Camille Paglia in Salon.com, an Obama supporter and a liberal writer makes some interesting observations in her piece "Heads should Roll."

Yes, free the president from his flacks, fixers and goons -- his posse of smirky smart alecks and provincial rubes, who were shrewd enough to beat the slow, pompous Clintons in the mano-a-mano primaries but who seem like dazed lost lambs in the brave new world of federal legislation and global statesmanship.

Heads should be rolling at the White House for the embarrassing series of flubs that have overshadowed President Obama's first seven weeks in office and given the scattered, demoralized Republicans a huge boost toward regrouping and resurrection. (Michelle, please use those fabulous toned arms to butt some heads!)

First it was that chaotic pig rut of a stimulus package, which let House Democrats throw a thousand crazy kitchen sinks into what should have been a focused blueprint for economic recovery. Then it was the stunt of unnerving Wall Street by sending out a shrill duo of slick geeks (Timothy Geithner and Peter Orszag) as the administration's weirdly adolescent spokesmen on economics. Who could ever have confidence in that sorry pair?

And then there was the fiasco of the ham-handed White House reception for British Prime Minister Gordon Brown, which was evidently lacking the most basic elements of ceremony and protocol. Don't they read the "Iliad" anymore in the Ivy League? Check that out for the all-important ritual of gift giving, which has cemented alliances around the world for 5,000 years

Of course, but then she goes on to say:

President Obama -- in whom I still have great hope and confidence -- has been ill-served by his advisors and staff. Yes, they have all been blindsided and overwhelmed by the crushing demands of the presidency. But I continue to believe in citizen presidents, who must learn by doing, even in a perilous age of terrorism

It will probably take a bit more convincing, but sooner or later some of the more intelligent liberals (and there are some) might also actually recognize that Obama is nothing more that a radical neophyte whose only interest is to alter the United States to his make-believe utopian world. Or, is that hoping for too much? Obama must be stopped.

Tuesday, March 10, 2009

Obama too Tired?

The Telegraph reports that Barack Obama may have been too tired to properly welcome Prime Minister Gordon Brown.

Sources close to the White House say Mr Obama and his staff have been "overwhelmed" by the economic meltdown and have voiced concerns that the new president is not getting enough rest.

While I am sure that that is not the real reason Barack Obama gave Gordon Brown less than a stellar welcome, but I will give him the benefit of the doubt. Barack Obama should take a break for the next three years. He is doing way too much. He needs his rest. The economy might actually stabilize if Barack Obama just does nothing.

So, Mr. President, Sit Back, Relax do nothing - you deserve it.

Friday, March 6, 2009

Barack Obama snubs the Prime Minister of Britain and Barack's message to the Stock Market

"If I had only followed CNBC's advice, I'd have a million dollars today provided I'd started with $100 million." Jon Stewart, The Daily Show

When I attended college, I received a scholarship to travel to Spain with the Experiment in International Living. I lived with a Spanish family and learned about Spanish culture or Spanish women as some have suggested. We were advised to find a gift that would be appropriate to give our new family – something that would be representative of the United States. I purchased a set of proof coins from the United States Mint. It was perfect. Proof coins are different from uncirculated coins in that they are made for collectors, and only a limited quantity are made each year. It demonstrated that I put some thought into what I wanted to give, and I wanted to make sure it truly represented the United States.

It is tradition when a new president meets a chief of state gifts are exchanged. Makes sense – right? I guess it all depends on what you give. What does Barack Obama give the Prime Minister of Britain Gordon Brown - a box of 25 DVDs which include ET, the Wizard of Oz and Star Wars, DVDs which you can buy for under $6.00 each at amazon.com. Star Wars is about $14.00. Total price of the DVD set about $160.00, but it is eligible for free super savers shipping. As Iain Martin of the U.K. writes, " "Oh give me strength, we do have television and DVD stores on this side of the atlantic." Oh, and Mr. President, Europe uses a different DVD format than the United States. When I visited the Reagan library, you can't help but notice all the gifts from the foreign dignitaries - each gift unique and representative of the specific country. Imagine if Barack Obama received this gift. Could you imagine seeing all the wonderful gifts from other chiefs of state at the opening of his presidential library, and then in the corner, a box of DVDs. One only has to wonder if this is the gift he gives our friends whom he apparently must disdain, what will he give President Mahmoud Ahmadinejead of Iran whom he admires?

Barack Obama on the stock market.

Gary weiss, a former senior writer of business week, wrote the following in his blog post, Obama needs to channel Richard Nixon.

What's missing is the kind of helpful nudge that came from none other than Richard Nixon in 1970, during the depths of what then seemed like a pretty deep recession. Nixon said: "Frankly, if I had any money, I'd be buying stocks right now." The market soared

Barack must have listened. A few hours later, Barack Obama said the following:

What you're now seeing is ... profit and earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it,"

Well, Mr president – what is a profit and earnings ratio? Anybody who has a modicum of intelligence regarding the stock market knows that the basic valuation metric for stocks is the price/earnings ratio not the profit/earnings ratio. A profit/earnings ratio is meaningless. There is no such ratio. How is that for giving confidence to the market? The market reacted - it fell. And, for Obama's long term horizon, I wouldn't invest any new money in the market until competence returns to the presidency. According to Bloomberg, The Dow Jones Industrial Average has fallen 20% since inauguration day, the fastest drop under a new president in 90 years surpassing Herbert Hoover and Jimmy Carter. The American people have hired the most incompetent president of all time. I said before the election that Barack Obama will go down as the worst president this country has ever known, and I believe that even more now. I was hoping I would be wrong.

Meanwhile, Retirees, Investors, and people of all stripes are seeing their life savings evaporate before their very eyes. I expected the market to fall, but not like this. The Wall Street Journal says that Obama's radicalism is killing the Dow. We have always heard about the buy and hold strategy for stocks – but what if that entails complete incompetence in the presidency. Do we still buy and hold? Barack Obama inherited a problem, that is for sure – but by his agenda, he has compounded the problem by his attempt in transforming our market economy to an economy that history has already proven does not work and during precarious economic times. Barack Obama is basically winging this presidency. As of this writing, the Dow is down another 104 points and sits at 6,489 down from 9,654, 3,165 points since the Nov. 4th election, a whopping 33%.I hope the American people wise up.

Wednesday, March 4, 2009

Jim Cramer "The Greatest Wealth Destruction by a President"

Yesterday on the Today Show Jim Cramer called Obama's radical agenda, "The Greatest Wealth Destruction by a President." Jim Cramer is the Host of Mad Money and he cofounded thestreet.com.

I never much cared for Cramer's flamboyant style on Mad Money nor do I know what the success of his stock picks have been that he recommends on his show. I don't pay attention to the financial gurus on CNBC. I don't buy a stock unless I do my own due-diligence. That being said, after reading many of Cramer's pieces on bloggingstocks.com and Thestreet.com, I have come to the conclusion that Cramer is a smart man when it comes to things finance. For the life of me, I cannot understand how intelligent people could have voted for Obama, but they do exist. Warren Buffet is another example.

On the positive side, Cramer's demographics include many Democrats so maybe even they will begin to realize that Obama's policies are destroying this economy. One can only hope.

Since Cramer was an Obama supporter, we know that he is not some Republican ideologue. This is a must read on Cramer's Response to the White House.

In it he states:

I also made it clear in a New York magazine article that I favored Obama over McCain because I thought Obama to be a middle-of-the-road Democrat, exactly the kind I have supported all my adult life, although I will admit to being far more left-wing during my teenage years and early 20s.

To be totally out of the closet, I actually embrace every part of Obama's agenda, right down to the increase on personal taxes and the mortgage deduction. I am a fierce environmentalist who has donated multiple acres to the state of New Jersey to keep forever wild. I believe in cap and trade. I favor playing hardball with drug companies that hold up the U.S. government with me-too products

Of course, I have no idea how he could have thought Obama was some kind of middle of the road politician. But, his article is right on the money, (no pun intended.)

March 05, 2009, Dow drops another 281 points and sits at 6,594. down from 9,654 since the election down over 3,060 points, a 32% drop, and the freefall continues. When are people going to wise up and realize that Obama is destroying this economy?

Tuesday, March 3, 2009

“In God we trust; all others pay cash.” – Berkshire’s annual letter to Shareholder’s

The annual letter by Warren Buffet was sent to Shareholder's over the weekend. For investors, Buffett's letter is always welcome and an interesting read. Buffett is a liberal, but he is also one of the most knowledgeable minds in the investing world. Buffett's letter not only gives the state of affairs on Berkshire Hathaway, Buffett's company, but it is very instructive on the economy. Buffett was prescient when he called the derivative debacle for what it was, "Weapons of Financial Destruction" years before the current housing crisis. Buffett's annual letter to shareholder can actually move markets.

Buffett uses analogies to convey his message. Investors Buffett wrote "were bloodied and confused, much as if they were small birds that had strayed into a badminton game." That sure sums up me. Buffett believes that the massive bailouts of the banks were necessary to prevent a total collapse. Wall Street, Main Street and everyone else were all in the same boat. The one likely consequence of this bailout and the massive spending by the current administration is the onslaught of inflation.

Buffet makes the observation that in spite of World Wars, The Great Depression, etc, the standard of living for Americans has improved seven fold since the 1900s, and the Dow Jones Industrial has risen 66 to 11,497 (of course now it sits at 6,793). Buffett says our best days lie ahead, but I say it won't be until after Obama is dethroned. Buffett then went on to say, "In our usual opinionated view…we're certain that the economy will be in shambles throughout 2009 – and, for that matter, probably well beyond – but that conclusion does not tell us whether the stock market will rise or fall." Of course, I am not sure how he arrives at that conclusion since the stock market is reflective of the economy.

Pessimism is your friend, Euphoria is the enemy says Buffet, and then he continues with one of his analogies. I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly taking action. Buffett says one of these mistakes was his purchase of ConocoPhillips.

Buffett talks about the mortgage crisis, Lenders happily made loans that borrowers couldn't repay out of their incomes, and borrowers just as happily signed up to meet those payments. Both parties counted on "house-price appreciation" to make this otherwise impossible arrangement work. It was Scarlett O'Hara all over again: "I'll think about it tomorrow." The consequences of this behavior are now reverberating through every corner of our economy. Buffett observes that the current housing crisis did not occur because a house is worth less than its mortgage, although that is indeed the case in many situations. When a homeowner makes a meaningful down-payment that he/she obtained from savings and not from borrowing seldom walks away if the house falls in value. In the current debacle, homeowners counted on further price appreciation that they could either flip or refinance to extricate themselves from their situation, hence the problem. Lenders happily made loans borrowers couldn't repay out of their incomes, and borrowers just as happily signed up to meet those payments. Home purchases should involve an honest-to-God down payment of at least 10% and monthly payments that can be comfortably handled by the borrower's income. That income should be carefully verified. Keeping people in their homes not putting them in their homes should be the country's objective. In other words, not everyone should be in a home. If you haven't seen MSNBC's House of Cards, I recommend you watch it.

Derivatives were another subject which Buffett wrote about in great detail. Derivatives were what allowed Fannie Mae and Freddie Mac to engage in massive misstatements of earnings for years. Freddie Mac and Fannie Mae were so indecipherable that their federal regulator OFHEO who had more than 100 employees had only one job, overseeing Fannie Mae and Freddie Mac. In spite of it all, they completely missed their cooking of the books. In 2006 OFHEO issued a 340 page report detailing the malfeasance of Fannie Mae and Freddie Mac blaming the fiasco on both parties, but not congress and the OFHEO. CEOs were unable to manage a business with the complex instruments known as derivatives. Buffett talks about how he and his partner could not understand these derivatives, so when he decided he could not get a handle on them, he closed up shop on General Re in 1998 because of their 23,218 derivatives. He quoted a line in a country song in reference to the derivatives, "I liked you before I got to know you so well."

Improved transparency won't help these derivatives says Buffett. Auditors can't audit these contracts and regulators can't regulate them. Buffett says, "When I read the pages of 'disclosure' in 10-Ks of companies that are entangled with these instruments, all I end up knowing is that I don't know what is going on in their portfolios, and I reach for the aspirin." If Warren Buffett, cannot understand these derivative instruments, no one else will be able to understand them. CEOs who continue to leverage their business sometimes in excess of fifty times and run huge books on incomprehensible derivatives, Buffett states the following, "Modest incompetence simply won't do, it's mindboggling screw-ups that are required."

My Thoughts

The housing crisis was of course the impetus to this current debacle, but there is a more pernicious event unfolding - the failure of the administration in understanding what makes economies grow The market needs to have confidence, but it doesn't, there is a crisis in confidence,, and the market is reflective of business and the business environment. We have seen the effects in California with out of control spending and high taxes, and we will soon see the results of even higher taxes on the Golden state. The Dow sits at 6,793. On November 4th, the Dow stood at 9,654, a 2861 point decline, a 30% drop since Obama was elected. If the market has confidence in an incoming president, you would see market rallies even if the economy were sitting in the doldrums. The president can give confidence to the market if he so desires. The market has continued a downward spiral. Whenever Geithner, Obama, or someone else from the administration speaks, the Dow falls. The market looks at the economy but it also looks at the current administration. The investor class is not dumb.

The AP writes:

While tackling the economic crisis, he is asking Congress to enact contentious measures that have been debated, but not decided, in calmer times: cut subsidies for big farms; combat global warming with a pollution tax on industries; raise taxes on the wealthy; make big changes to health care, including lower reimbursements for Medicare and Medicaid treatments and prescription drugs.

Standing alone, any one of these proposals would trigger a brawl in Congress and fierce debates outside Washington. Obama wants the proposals done largely in concert, as an interrelated plan to undo major elements of Ronald Reagan's conservative movement.

And the Wall Street Journal notes the following:

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth

The market became afraid of an Obama presidency when he began to rise in the polls because of his anti-business rhetoric he espoused during the campaign. After his election, there were two factions of conservatives, those that said (or at least hoped) that he would be a moderate or a centrist, and the other faction who said he would lead as a radical. I was of the latter because that is what his history suggested, and he didn't disappoint, (I was hoping he would.) Thus far, he has spent a trillion dollars in stimulus pork soon to be followed by more. He intends to increase the tax on those who create the jobs, those making $250,000 dollars or more a year, (those who make over 200K already pay 60% of the taxes) and he intends to raise the capital gains rate to 20%. He has begun to create protectionist policies using a "buy provision" in the stimulus bill which will inevitably hurt trade and he will begin a cap and trade scheme whose effect will be to stifle economic growth and make us globally non-competitive. This, of course, is only the beginning. Investors will sit on their cash awaiting better times ahead. You cannot expect to have a healthy economy when you suck the very capital out of the people who create the jobs or do the investing. I never thought I would be nostalgic for Bill Clinton. Obama has proven to be the radical he is – he in effect has declared war on capitalism. God help us all.
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