Posts Tagged ‘Secretary of the Treasury’

The present world economic and political order – A madhouse where the Arsonists are Running the Fire Brigade‏

2 december, 2013

I have written a lot about the present economic and political disorder (including foreign policy), where the common people are the ones paying the price for the gigantic folly by the political class, old media, central and investment banks, hedge funds etc.; who are pushing risk, leverage and debt to ridiculous and dangerous extremes.

This absurd Alice in Wonderland economic and political farce has been going on now for some time. And the Rabbit Hole is getting deeper and deeper because of the actions, and inactions, of the people mentioned above.

When you start analyzing these figures you get utterly horrified of the totals of the open derivatives positions in the US and European markets.

Just as an example: the four big investment banks in USA (Goldman Sachs, JP Morgan Chase, Citibank and Bank Of America) ONLY “covers” 2,27 % of the Total Exposure with ALL their Assets!

To sum up – TOTAL EXPOSURE TO DERIVATES for ONLY these four banks:

207, 375, 086, 000, 000 TRILLION DOLLARS!!!!!!!!!!!

TOTAL ASSETS for these four banks:  4,720,464,000,000 TRILLION DOLLARS

And remember: these figures are now over one year old. Today’s figures are worse.

If you do the math for example for Goldman Sachs, it has a total exposure to derivatives contracts that is more than 364 times greater than their total assets!

To put these GIGANTIC sums into perspective let’s compare with the GDP from USA and all of EU from 2011.

There a lot of different way to calculate GDP and the figures for each year. Add to that exchange fluctuations, conversion rates etc. So the figures below come from the same source (IMF) to make the comparison easier.  And it is their conversion.

GDP USA 2011 – 15,094,025 billion US dollars

GDP EU 2011 –  17,610,826 billion US dollars

Total GDP for EU and USA 2011: 32,704,851 billion US dollars.

Let’s compare these 32,704,851 billion US dollars with TOTAL EXPOSURE TO DERIVATES for  these four above mentioned banks:

207, 375, 086, 000, 000 TRILLION DOLLARS!!!!!!!!!!!

                                        VS

32,704,851 billion US dollars in COMBINED GDP of EU and USA

Anyone see any problem???”

See among others my posts:

After Cyprus there can be NO Trust Anymore

The economic mess and structural problems in EU and US – Part 1

The economic mess and structural problems in EU and USA – Part 2

Why the Euro is doomed – the German households net wealth in not EVEN HALF of that compared to Italians

Citizens! Forgive us for not arresting those truly responsible for this crisis: bankers and politicians

This is why the Euro is doomed

EU a stupid empire on purpose

EU – an unaccountable mess created by an undemocratic treaty – Now also a crony Bankocracy

The scam that is called EU and the Euro is behind the present crisis

Below are some observations from people with very long experience in the investment and economical field. So rather than me writing again I give you these people’s views.

First from John Mauldin in his newsletter from November 30th (you have to be a subscriber). John Mauldin is a renowned long time financial expert who has written extensively and in depth about the world markets and economic situation. He has his own investment companies; he is an advisor to hedge funds, he an author of several books etc.

(Note: Most of the bold are mine and all underlining is mine. And the charts are mine)

Arsonists Running the Fire Brigade

”I led off by forming an analogy to my Thanksgiving Day experience:

I rather think the stock market is acting like we did at dinner. When the alarms go off, we note that we have heard them several times over the past few months, and there has never been a real fire. Sure, we had a credit crisis in August, but the Fed came to the rescue. Yes, the subprime market is nonexistent. And the housing market is in free-fall. But the economy is weathering the various crises quite well. Wasn’t GDP at an almost inexplicably high 4.9% last quarter, when we were in the middle of the credit crisis? And Abu Dhabi injects $7.5 billion in capital into Citigroup, setting the market’s mind at ease. All is well. So party on like it’s 1999.

However, I think when we look out the window from the lofty market heights, we see a few fire trucks starting to gather, and those sirens are telling us that more are on the way. There is smoke coming from the building. Attention must be paid.

I was wrong when I took the (decidedly contrarian) position that we were in for a mild recession. It turned out to be much worse than even I thought it would be, though I had the direction right. Sadly, it usually turns out that I have been overly optimistic.

This year we again brought my now-96-year-old mother to my new, not-quite-finished high-rise apartment to share Thanksgiving with 60 people; only this time we had to contract with a private ambulance, as she is, sadly, bedridden, although mentally still with us. And I couldn’t help pondering, do we now have an economy and a market that must be totally taken care of by an ever-watchful central bank, which can no longer move on its own?

20131129_youth

I am becoming increasingly exercised that the new direction of the US Federal Reserve, which is shaping up as ”extended forward rate guidance” of a zero-interest-rate policy (ZIRP) through 2017, is going to have significant unintended consequences. My London partner, Niels Jensen, reminded me in his November client letter that,

In his masterpiece The General Theory of Employment, Interest and Money, John Maynard Keynes referred to what he called the ”euthanasia of the rentier”. Keynes argued that interest rates should be lowered to the point where it secures full employment (through an increase in investments). At the same time he recognized that such a policy would probably destroy the livelihoods of those who lived off of their investment income, hence the expression. Published in 1936, little did he know that his book referred to the implications of a policy which, three quarters of a century later, would be on everybody’s lips. Welcome to QE.

It is this neo-Keynesian fetish that low interest rates can somehow spur consumer spending and increase employment and should thus be promoted even at the expense of savers and retirees that is at the heart of today’s central banking policies. The counterproductive fact that savers and retirees have less to spend and therefore less propensity to consume seems to be lost in the equation. It is financial repression of the most serious variety, done in the name of the greater good; and it is hurting those who played by the rules, working and saving all their lives, only to see the goal posts moved as the game nears its end.

Central banks around the world have engineered multiple bubbles over the last few decades, only to protest innocence and ask for further regulatory authority and more freedom to perform untested operations on our economic body without benefit of anesthesia. Their justifications are theoretical in nature, derived from limited-variable models that are supposed to somehow predict the behavior of a massively variable economy. The fact that their models have been stunningly wrong for decades seems to not diminish the vigor with which central bankers attempt to micromanage the economy.

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The destruction of future returns of pension funds is evident and will require massive restructuring by both beneficiaries and taxpayers. People who have made retirement plans based on past return assumptions will not be happy. Does anyone truly understand the implications of making the world’s reserve currency a carry-trade currency for an extended period of time? I can see how this is good for bankers and the financial industry, and any intelligent investor will try to take advantage of it; but dear gods, the distortions in the economic landscape are mind-boggling. We can only hope there will be a net benefit, but we have no true way of knowing, and the track records of those in the driver’s seats are decidedly discouraging.”

”but now let’s jump into Code Red. In this section, we deal with the topic of central banking and its failures and ponder the implications of continuing to give the same people ever more authority and responsibility. This is from Chapter 5, called:

Arsonists Running the Fire Brigade

In the old days, central banks raised or lowered interest rates if they wanted to tighten or loosen monetary policy. In a Code Red world everything is more difficult. Policies like ZIRP, QE, LSAPs, and currency wars are immensely more complicated. Knowing how much money to print and when to undo Code Red policies will require wisdom and foresight. Putting such policies into practice is easy, almost like squeezing toothpaste. But unwinding them will be like putting the toothpaste back in the tube.

20131122_buck

Promoting Failure

We’ll admit that we’re having too much fun criticizing central bankers, the Colonel Jessups of the Code Red world. But please don’t just take our word for it when we tell you that they’re clueless. Let’s look at what others have written.

In 2009 Congress created the Financial Crisis Inquiry Commission to uncover the causes and consequences of the financial catastrophe that almost brought down the world financial system. They roundly condemned the Federal Reserve:

We conclude this crisis was avoidable. The crisis was the result of human action and inaction…. The prime example is the Federal Reserve’s pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage lending standards. The Federal Reserve was the one entity empowered to do so and it did not…. We conclude widespread failures in financial regulation and supervision proved devastating to the stability of the nation’s financial markets.

Not surprisingly, public confidence in the Fed has plummeted.

Italian Ind production

The Federal Reserve performed disastrously before the Great Financial Crisis, but almost all central banks were asleep at the wheel. The record of central banks around the world leading up to the Great Financial Crisis was an unmitigated disaster. All countries that had housing bubbles and large bank failures failed to spot them beforehand. In the case of England, where almost all major banks went bust (some rather spectacularly!) and required either nationalization or fire sales to foreign banks, the Bank of England never saw the crisis coming. Let’s look at what The Economist has to say about central bank failures:

In 1996 the Bank of England pioneered financial-stability reports (FSRs); over the next decade around 50 central banks and the IMF followed suit. But according to research cited by Howard Davies and David Green in ”Banking on the Future: The Fall and Rise of Central Banking,” published last year, in 2006 virtually all the reports, including Britain’s, assessed financial systems as healthy. In the basic function of identifying emerging threats, ”many central banks have been performing poorly,” they wrote.

According to published reports, the Bank of England only learned about the bankruptcy of one huge bank after another a few days before the actual public announcement. So much for staying on top of the situation. The regulators were captured by the very institutions they were supposed to regulate, with neither the banks of the regulators understanding the serious nature of the problems they were creating with their actions.

20131119_thisismadness

Housing bubbles swelled and burst everywhere: Spain, Ireland, Latvia, Cyprus, and the United Kingdom. Countries that had to recapitalize or nationalize their banks were broadsided by a disaster they did not anticipate, prepare for, or take action to prevent. In the case of Spain, even after the crisis unfolded, the Bank of Spain acted like a pimp for its own banks. It insisted nothing was wrong and proceeded to help its banks sell loads of crap to unsuspecting Spaniards in order to recapitalize the banks. (We apologize for our language, but there is no other word besides crap that properly characterizes selling worthless securities to poor pensioners – well, there are, but they are even less suitable for public consumption).

In fairness, central bankers did save the world after the Lehman Brothers bankruptcy. The money printing that the Federal Reserve oversaw after the failure of Lehman Brothers was entirely appropriate to avoid another Great Depression. But giving them credit for that is like praising an arsonist for putting out the fire he started.

The failure of central banks makes it all the more remarkable that they were given even more responsibility in the wake of crisis. Since 2007 central banks have expanded their remits, either at their own initiative or at governments’ behest. They have exceeded the limits of conventional monetary policy by buying massive amounts of long-dated government bonds, mortgage-backed securities, and other assets. They have also taken on more responsibility for the supervision of banks and the stability of financial systems.

Japan%20Charts%20Abenomics

The Banking Act of 1933, more popularly known as the Glass-Steagall Act, forced a separation of commercial and investment banks by preventing commercial banks from underwriting securities. Investment banks were prohibited from taking deposits. Until it was repealed in 1999, the Glass-Steagall Act worked brilliantly, helping to prevent a major financial crisis. It was replaced by the Graham-Leach-Bliley Act, which ended regulations that prevented the merger of banks, stock brokerage companies, and insurance companies. The American public’s interests were thrown to the wolves of Wall Street, and the Fed and the Clinton administration gave the middle finger to financial stability.

After the Great Financial Crisis, Congress could have simply reinstated Glass-Steagall. The act was only 37 pages long, but it had worked incredibly well. Instead, after an orgy of bank lobbying and Congressional kowtowing to the bankers who had brought the world to the brink of a global depression, Congress passed the Dodd-Frank Act. It is over 2,300 pages long; no one is sure what is in it or what it means; and it has added a dizzyingly complex tangle of regulations and bureaucracy to what should have been a simple, straightforward reform of the financial sector. (The act is so long and complicated that it was nicknamed the ”Lawyers’ and Consultants’ Full Employment Act of 2010.”) You will hardly be reassured to learn that the Federal Reserve’s powers were expanded through Dodd-Frank.

Please note that it was the same banks and investment firms that lobbied to repeal Glass-Steagall in 1999 that so aggressively and successfully lobbied for the Dodd-Frank Act. While there are some features contained in the plan that are good, the basic problems still remain. Industry insiders were able to assure that business as usual could continue. And to judge from their profits, it has done so remarkably well.

Figure 5.4 Major financial legislation: number of pages

Financial legislation

The Fed didn’t need more powers. In the years leading up to the Great Financial Crisis, the Fed already had almost all the tools it needed to prevent the subprime debacle. It simply failed to use them. You could call that lapse nonfeasance, dereliction of duty, going AWOL, or anything other than doing their duty. If you don’t believe you are capable of recognizing a bubble in advance, then all the additional regulations in the world won’t make any difference in preventing a bubble. Dodd-Frank merely gave them more regulations not to enforce. It is the mindset that needs changing, not simply the regulations.

According to the Financial Crisis Inquiry Commission, the Federal Reserve failed to use the tools at its disposal to regulate mortgages or bank holding companies or to prevent the abusive lending practices that contributed to the crisis. The central bank didn’t ”recognize the cataclysmic danger posed by the housing bubble to the financial system and refused to take timely action to constrain its growth,” the report said. It also ”failed to meet its statutory obligation to establish and maintain prudent mortgage lending standards and to protect against predatory lending.”

The most sordid part of the Great Financial Crisis was not the extreme failure by central banks to regulate. The most egregious violation of the public interest came in the form of the massive subsidies and aid the central banks gave to the banking system when the crisis was underway. The great journalist and essayist Walter Bagehot argued in the mid-19th century that during a financial crisis central banks should lend freely but at interest rates high enough to deter borrowers not genuinely in need, and only against good collateral. During the crisis, the Fed and other central banks lent trillions of dollars at zero cost against the shoddiest of collateral. And the Fed went out of its way to provide gifts to Wall Street banks via the back door. For example, when AIG went bust, Timothy Geithner decided that the US taxpayer should pay out credit default swaps to AIG’s counterparties at full price. Goldman Sachs was given a parting gift to $10 billion. Geithner did not even negotiate a haircut. The money went to dozens of banks, many which were not even American. It is no wonder Geithner became well-known as ”Wall Street’s lapdog.”

20131115_SpainGDP

Our good friend Dylan Grice wrote a fascinating piece on what happens when you have too many rules and too little common sense. In a Dutch town called Drachten, local government decided to take out all traffic lights and signs. They hoped people would pay more attention to the road rather than fixate on rules and regulations. They were right. In Drachten there used to be a road death every three years, but there have been none since traffic light removal started in 1999. There have been a few small collisions, but these are almost to be encouraged. A traffic planner explained, ”We want small accidents in order to prevent serious ones in which people get hurt.” Let’s see what Dylan has to say about the lessons for capital markets:

You might be thinking that traffic lights don’t have anything to do with the markets we all work in. But I think they do. Instead of traffic lights and road signs think rating agencies; think Basel risk weights for Core 1 and Core 2 bank capital; think Solvency 2; or think of the ultimate market regulators of our currencies – the central banks – and the Greenspan/Bernanke ”put” which was once imagined to exist. Haven’t these regulators provided the same illusion of safety to financial market participants as traffic safety tools do for drivers? And hasn’t this illusion of safety been even more lethal?

Wouldn’t it be nice if central bankers thought more like Drachten town planners? But central bankers and parliaments prefer extensive rules to a common-sense approach.

Central Banks and GDP growth

Unlike the planners of Drachten, the Federal Reserve and central banks around the world issue extensive sets of regulation, fail to enforce them, encourage everyone to speed, and then when crashes happen they protect as many banks as possible from the consequences of their own actions.

The Federal Reserve is in desperate need of reform. This doesn’t mean that politicians should be deciding interest rates or that banking supervision should be taken away from central banks. But central bankers should be answerable to the public for how they do their jobs. Accountability has been completely missing throughout the entire crisis. Almost all central banks failed to do even the basics of their job. The regulations they created, especially in Europe, made it possible for banks to take massive risk and make huge profits that ultimately had to be bailed out by taxpayers.

They believe the banks and other institutions they were regulating when they showed the models which they created which demonstrated conclusively there was no risk. Everyone, bankers and regulators, believed we were in a new era, for the old rules of common sense didn’t apply. Central bankers didn’t need more rules or regulations. They failed miserably at even carrying out the simple job they had. The regulatory functions of central banks should be treated like those of any other regulatory agency. It is critical that we hold central bankers accountable for their management of the banking system.

Participation%20Rate_0

No Apologies, Only Promotions

One of the most disastrous battles of World War I was the British Gallipoli campaign in Turkey in 1915. It was utterly devastating, leaving more than 50,000 British wounded and almost 100,000 dead. Winston Churchill, first lord of the Admiralty, was one of the architects of the campaign. In the wake of the outcome, he resigned his post to become a soldier in the war. Churchill was a humble man who felt he was at fault. He was honorable. But if Churchill had been a central banker, he would never have had to accept responsibility or resign. He would have kept his job and been given even more far-reaching powers and a big pay raise to boot.

For the past few years, central bankers have been living large. The same people who brought us the Great Financial Crisis are now bringing us a world of Code Red policies and financial repression. The arsonists are running the fire brigade.

Where is the central banker who has apologized for contributing to the crisis or for being asleep at the wheel? Given how disastrous their performance has been, it is extraordinary that the same cast of characters is still running the show. Central bankers are lucky that they still have jobs. As far as we are aware, no central banker was fired for incompetence or mismanagement. Many have retired and are now enjoying generous pensions and highly paid consulting careers advising investment funds as to what their former colleagues might do next.

Labor%20Force

Central bankers have had plenty of time to discuss the financial crisis since 2008, but they have provided only scholarly disquisitions as to what went wrong in the banking crisis, without accepting any responsibility at all. At no time have any central bankers admitted that they might have ignored the warning signs of excessive debt, kept interest rates too low for too long, ignored bubbles in housing markets, failed to regulate banks correctly, or proved themselves even mildly incompetent.

Not only were central bankers not fired, many were promoted instead and given pay raises. Timothy Geithner, who headed the Federal Reserve Bank of New York, not only failed to regulate a host of banks that needed massive government bailouts but was an active apologist for Wall Street banks. For his efforts he was promoted to Secretary of the Treasury under President Obama. In Europe, Spanish central bankers stand out as perhaps the most incompetent ever, having overseen dozens of banks that created the biggest housing bubble in European history and having failed to recognize problems not only before but after they happened. Bankers like Jose Viñals, Jose Caruana, and others were given plum jobs at the IMF and the ECB after being asleep at the wheel in Spain.

Japan debt

Granting extra powers to central banks without a change in the philosophy behind their management is like encouraging an irresponsible teenager. Imagine your teenage son borrowed the family car and crashed it, and instead of punishing him you bought him a new Ferrari to test drive. Conventional monetary policies are like a sturdy old family station wagon, but Code Red policies are like a modified Ferrari 288 GTO capable of hitting 275 miles per hour. Given how spectacularly central banks failed during the Great Financial Crisis, it blows the mind that they’ve been handed the keys to a faster set of wheels.

One last thought. You might get from reading this that we are against rules and regulations. Far from it. We just like very simple, workable rules. Reinstate Glass-Steagall. Limit the ability of banks to create leverage, and require even more capital as they get larger. Banks that are systemically too big to fail are too big, period. Take away the incentive to grow beyond what is prudent for the deposit insurance scheme of a nation to maintain. Allowing bankers to take the profits and then hand taxpayers the losses in a crisis is not good policy, even if it is bolstered by 1,000 pages of regulations written by lawyers and bank lobbyists who then proceed to ”massage” them in order to do what they want to anyway.

But, alas, such hopes may remain dreams deferred until there is yet another crisis and taxpayers are asked to absorb even greater losses (but we can always hope!). So, in the meantime, as prudent investors and managers, we must be aware of the realities we face. The saying in Africa is that it is not the lion you can see that is the danger, instead it is the one hidden in the grass that leaps out at you as you try to escape the one you see. Later we will talk about a few strategies that can help you handle the risks that crouch hidden in the grass.”

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Second this presentation from Grant Williams, investment and financial expert from Singapore, with 28 years of experience of world markets, to get another angle of the same problem. He is now a portfolio and strategy advisor for a hedge fund in Singapore.

“Grant Williams ”pulls no punches” in this all-encompassing presentation as the ”Things That Make You Go Hmmm” author reflects on what is behind us and looks ahead at the ugly reality that we will face when ”the impurities of QE are finally flushed from the system.” Central bankers of today have ”changed everything” he chides, ”in ways that will ultimately end in disaster.” Following extraordinarily easy monetary policies across all of the world’s central banks, Williams explains why ”we are now near the popping point of the 3rd major bubble of the last 15 years,” each bigger than the last. The only way Janet Yellen avoids being at the helm when this ship goes down is to blow an even bigger bubble than Bernanke’s government bond experiment, ”which is highly unlikely.” From how QE works, why many don’t ”feel” wealthy anymore, to the fact that ”the geniuses that gave this thing life, don’t have the guts to kill it,” Williams warns, ominously, ”the bills have come due on the blissful latest 30 years.”

20131130_TTMYGH3

Returning to a world with which we are familiar is going to require either some real magic on the parts of Draghi, Kuroda, Carney, and soon to be Yellen; or some kind of tornado that sweeps away everything in its path and allows the world to build again from more solid foundations.

20131130_TTMYGH5

Wizened In Oz: ASFA 2013 Presentation. Perth, November 2013

Third, just to remind us that it is the normal, hardworking people that are following the rules that are getting screwed, just take a look at this graph from USA below:

This is why all these welfare systems are going to crash taking the societies with them.

And ALL these SYSTEMS were put in place by politicians KNOWING FULL WELL WHAT THEY VERE DOING and THAT THESE SYSTEM COULDN’T LAST IN THE LONG RUN.

US welfare cliff

http://www.zerohedge.com/news/2013-11-30/other-america-taxpayers-are-fools-working-stupid

“While what little remains of America’s middle class is happy and eager to put in its 9-to-5 each-and-every day, an increasing number of Americans – those record 91.5 million who are no longer part of the labor force – are perfectly happy to benefit from the ever more generous hand outs of the welfare state. Prepare yourself before listening to this… calling on her self-admitted Obamaphone, Texas welfare recipient Lucy, 32, explains why ”taxpayers are the fools”…

”…To all you workers out there preaching morality about those of us who live on welfare… can you really blame us? I get to sit around all day, visit my friends, smoke weed.. and we are still gonna get paid, on time every month…”

She intends to stay on welfare her entire life, if possible, just like her parents (and expects her kids to do the same). As we vociferously concluded previously, the tragedy of America’s welfare state is that work is punished.”

As quantitied, and explained by Alexander, ”the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.

“We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and… have the same disposable income at the end of the day.”

WELFARE ABUSE: 32 years old Austin, TX welfare recipient says (October 30)

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America, You are at a tipping point and you have your last change to stop it – Part 6

1 november, 2010

                             The Government

”We don’t pay taxes. Only the little people pay taxes.” (Leona Helmsley)

Federal workers who owed money to the Internal Revenue Service in 2009.

http://www.washingtonpost.com/wp-srv/politics/irs-federal-workers/index.html

Capitol Hill employees owed $9.3 million in back taxes last year, data show

http://www.washingtonpost.com/wp-dyn/content/article/2010/09/09/AR2010090903376.html?wpisrc=nl_polalert

41 Obama White House aides owe the IRS $831,000 in back taxes — and they’re not alone

http://latimesblogs.latimes.com/washington/2010/09/congress-taxes-irs.html

“We now know that federal employees across the nation owe fully $1 billion in back taxes to the Internal Revenue Service.

As in, 1,000 times one million dollars.”

Now, back taxes have been a problem for the Obama-Biden administration. You may recall early on that Tom Daschle was the president’s top pick to run the Health and Human Services Department. But it turned out the former Democratic senator, who was un-elected from South Dakota in 2004, owed something like $120,000 to the IRS for things from his subsequent benefactor that he just forgot to pay taxes on. You know how that is. $120G’s here or there. So he dropped out.

And then we learned this guy Timothy Geithner owed something like $42,000 in back taxes and penalties to the IRS, which is one of the agencies that he’d be in charge of as secretary of the Treasury. The fine fellow who’s supposed to know about handling everyone else’s money. In the end this was excused by Washington‘s bipartisan CYA culture as one of those inadvertent accidental oversights that somehow never seem to happen on the side of paying too much taxes.”

“But we do know that as of the end of 2009, 41 people inside Obama’s very own White House owe the government they’re allegedly running a total of $831,055 in back taxes. That would cover a lot of special chocolate desserts in the White House Mess.

In the House of Representatives, 421 people owe a total $6,524,892. In the Senate, 217 owe $2,774,836. In the IRS’ parent department, Treasury, 1,204 owe $7,670,814. At the Labor Department, where Secretary Hilda Solis’ husband had some back-tax problems before her confirmation, 463 owe $7,481,463. Eighty-one workers for the Federal Reserve System’s board of governors owe $1,076,733.

Over at the Justice Department, which is so busy enforcing other laws and suing Arizona, 1,971 employees still owe $14,350,152 in overdue taxes.

Then, we come to the Department of Homeland Security, which is run by Janet Napolitano, the former governor of Arizona who preferred to call terrorist acts ”man-caused disasters.” Homeland Security is keeping all of us safe by ensuring that a Dutch tourist is aboard every inbound international flight to thwart any would-be bomber with explosives in his underpants.

Within that department, there reside 4,856 people who owe the tax agency a whopping total of $37,012,174.”

 

2010 Congressional Pig Book Summary. An exposé of pork-barrel spending.  The Pig Book revealed 9,129 earmarks worth $16.5 billion.

 http://www.cagw.org/assets/pig-book-files/2010/2010-pig-book-summary.pdf

Sixty percent (60%) of U.S. voters say most members of Congress don’t care what their constituents think, according to a new Rasmussen Reports national telephone survey.

http://www.rasmussenreports.com/public_content/politics/general_politics/august_2010/60_of_voters_say_most_in_congress_don_t_care_what_they_think

 White House Insider: ”They were in shock at the president’s behavior.”

http://newsflavor.com/politics/world-politics/white-house-insider-they-were-in-shock-at-the-presidents-behavior/#ixzz13i2hI5gk

Our latest interview with the White House Insider reveals a Democratic Party civil war, with growing opposition to the Obama White House.

 “So who do you place the most blame for the Democratic Party’s troubles today? President Obama and his administration -without a doubt.  The Obama White House has been a political train wreck from day one, and it isn’t getting any better at the moment.  You already know my feelings on that.

Previously you stated that Obama could be re-elected in 2012, and that if he improved himself on the job – that if he took a more active and responsible role as President, that you would support him.  Do you still feel that way?  Is that what I said? (shakes head) Well…(pauses) Ok, I’ll just come out and say what is already underway, and to hell with the possible consequences to me.  I will not support Barack Obama in 2012.  That possibility has left the table for me.  Based on what I know, what I have been told, what I have seen in recent weeks…no, I cannot support the President for a second term.  My concern for the party , for the country…my conscience does not allow me that option any longer.  Obama is not fit to be president.  He simply does not possess the inclinations necessary to lead the country.  And I don’t like saying that.  I helped the man get elected.  I was in the trenches day after day from city to city helping things get done in 2008…I take no pleasure in saying I was a part of that.  And I take no pleasure in saying Obama should not be re-elected in 2012.

That is a very strong statement – anything recent that causes you to now say you will not support Obama in 2012?  (Long pause – question is repeated) There is much I have been told, some I know, some more that will probably develop in the coming weeks and months.  But you want specifics, right? I understand that…I’ll give you an example of why President Obama is not right for AmericaHe sure as hell has not been right for the party.  Not long ago, the president took a meeting.  He’s late, which apparently is becoming more and more common with him.  The meeting was almost cancelledIn strolls the president, joking with an aide.  He plops down on a sofa, leans over and claps another guy on the back asking how he’s been.  Apologizes for being late, says he was “held up”.  He laughs some more.  The meeting begins.  After just ten minutes, during which time the president appears to almost totally withdraw into himself,  an aide walks in and whispers something to the president, who then nods and quickly stands up, shakes a few hands and tells another aide to update him later on the rest of the meeting.  As the president is walking out he is laughing at something yet again.  He asked no questions of those at the meeting – not one.  He left after just ten minutes, coming in laughing and leaving laughing.  His behavior during that brief time he was there was described as “borderline manic”.

Ok, you have already stated previously that the president doesn’t show much interest in the day to day business of being president – why is this example so bad, or different?  Care to know what that particular meeting was about on that day?

Certainly.  Afghanistan.  That meeting was an update on Afghanistan, and the President of the United States, the Commander in Chief, could give a -expletive-. 

Were you actually there to witness this?  No, I was long gone from the White House by then.  It was told to me though by someone who was.  They were there.  First hand.  They were also left to apologize to the ones left in the room after the president left.  Some of these were military.  They were not happy.  No…that is not accurate. They were pissed.  They didn’t say much at the time, but word got back.  They were in shock at the president’s behavior.  The country had just lost a number of soldiers the week prior, the public opinion on the war was falling…and the president didn’t seem to care.  He arrives late, leaves early, appears to emotionally shut down during the actual discussion, and to then start laughing once again as he is leaving…how does someone reconcile with that kind of behavior?  I can’t.  It turns my stomach.  I didn’t want to believe what I was being told, but I had seen similar kinds of behavior from the president myself, and I can’t dispute the credibility of the source.  They have no reason to lie.

 

          

So is that one example the real tipping point for you in no longer being willing to support Obama in 2012? Or do you have any others you wish to share? Oh, I have others, though I cannot share all of them at this point because they involve some still in range of potential White House retribution.  Then again, I suppose I am still in range of such retribution myself.

What do you mean by retribution?  Punishment.  Political punishment, and even personal punishment.  The powers of a president extend far beyond the Oval Office – you know that.  I make my living, and it has been a very good living, working within the system of politics.  A president can create considerable…pressure if you will, to limit or even destroy my place in that system.  Working with a president is an extraordinary and terrifying thing.  In regards to my experience with Obama, it became far less extraordinary and far more terrifying.  And it’s getting worse.

Terrifying? Yes, terrifying.  To see one’s expectations so disappointed.  To see a figure who wields such great power and influence fall so short of the responsibilities of that power and influence…that is terrifying to witness. Initially I developed great fear for my party – for the Democrats whose political careers were being destroyed by this administration and party leader ship.  Now I sincerely fear for my country.

Part 2 here:

http://newsflavor.com/politics/us-politics/white-house-insider-president-obama-is-lost-absolutely-lost/

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