Why am I not surprised? CIT group files for Ch 11 bankruptcy

•November 1, 2009 • Leave a Comment

The latest big bank to get on the insolvency bandwagon is CIT

WASHINGTON – After struggling for months to avert bankruptcy, lender CIT Group has filed for Chapter 11 protection in an attempt to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses.

CIT made the filing in New York bankruptcy court Sunday, after a debt-exchange offer to bondholders failed. CIT said in a statement that its bondholders overwhelmingly opted for a prepackaged reorganization plan which will reduce total debt by $10 billion while allowing the company to continue to do business.

The Chapter 11 filing is one of the biggest in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom andGeneral Motors. CIT’s bankruptcy filing shows $71 billion in finance and leasing assets against total debt of $64.9 billion.

A prepackaged bankruptcy, which has the support of major bondholders, speeds up the process of restructuring CIT’s debt and could allow it to exit court protection by the end of the year. In addition to reducing its debt, CIT said the plan cuts cash needs over the next three years, which should help it return to profitability more quickly.

“The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy,” said Jeffrey M. Peek, chairman and CEO. Peek has said he plans to step down at the end of the year.

CIT’s move will wipe out current holders of its common and preferred stock. That means the U.S. government will likely lose the $2.3 billion it sunk into CIT last year in return for preferred shares to prop up the ailing company. The government could have lost billions more, however, had it not declined to hand over more aid to the company earlier this year.

Treasury Department spokesman Andrew Williams said the government will be closely monitoring the bankruptcy proceedings, but acknowledged that “recovery to preferred and common equityholders will be minimal.”

Common stockholders set to lose their investment include FMR LLC of Boston with a 9.9 percent stake in CIT and San Diego-based Brandes Investment Partners LP with a 9.7 percent equity position, according to CIT’s filing.

CIT has been trying to fend off disaster for several months and narrowly avoided collapse in July. It has struggled to find funding as sources it previously relied on, such as short-term debt, evaporated during the credit crisis.

The company received $4.5 billion in credit from its own lenders and bondholders last week, reportedly made a deal with Goldman Sachs to lower debt payments, and negotiated a $1 billion line of credit from billionaire investor and bondholder Carl Icahn. But the company failed to convince bondholders to support a debt-exchange offer, a step that would have trimmed at least $5.7 billion from its debt burden and given CIT more time to pay off what it owes.

Analysts warned that the bankruptcy could add to the uncertainty around loans for the nation’s small businesses, especially retailers, which make up a significant portion of CIT’s clients and are already struggling with tight credit markets.

CIT is the financier for about 2,000 vendors that supply merchandise to more than 300,000 stores, many of which are gearing up for the critical holiday shopping season. They rely on the lender to cover costs ranging from paying for orders to making payroll. Any disruption caused by bankruptcy could wreak havoc on their operations, Joe Alouf, a partner with Eaglepoint Advisors, a crisis management company that is partly owned by Kurt Salmon Associates.

“CIT is the 600-pound gorilla in the industry,” Alouf said.

But CIT has already pulled back sharply on its lending to businesses as it tried to preserve cash. According to its most recent quarterly earnings report, the company originated just $4.4 billion worth of new business during the first six months of 2009 compared to $11.3 billion in the first half of 2008.

CIT said Sunday the bankruptcy filing is only for the holding company, and won’t affect its operating subsidiaries, such as Utah-based CIT Bank. CIT has filed a number of first-day motions to allow it to continue operations, including requests to keep paying wages and other employee benefits and to pay its vendors and certain other creditors in full.

The company has retained Evercore Partners and FTI Consulting as its financial advisers and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel in connection with the restructuring plan and Chapter 11 cases.

Houlihan Lokey Howard & Zukin Capital Inc. serves as financial adviser, and Paul, Weiss, Rifkind, Wharton & Garrison LLP serves as legal counsel to the bondholders’ committee.

Is anyone really surprised?  None of the articles I read mentioned Citibank but I have to wonder if that isnt also included….time will tell…

 

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That will buff out..

•September 30, 2009 • 1 Comment

GREAT site for funny car photos:  thatwillbuffout.com

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There are none so blind as those who will not see

•September 30, 2009 • 2 Comments

The mainstream media has been dutifully reporting now for some time about the town hall riots over Obama’s proposed Health Care reform, but what folks dont realize is that these “riots” are staged, shills planted to say provocative things and get the unsuspecting riled up enough that they will perform, like trained monkeys, or Pavlov’s salivating dogs, for the camera to capture and spread elsewhere like some societal virus until (they hope) Obama’s reform momentum loses steam.  The TRUE manipulators of smoke and mirrors behind the scenes are the same GOP fear-mongers and their corporate partners in crime.  The recent issue of Rolling Stone magazine unveils an insightful piece of investigative journalism that blows the lid off of the farce that is duping many decent Americans:

According to internal documents obtained by Rolling Stone, Conservatives for Patients’ Rights had been working closely for weeks as a “coalition partner” with three other right-wing groups in a plot to unleash irate mobs at town-hall meetings just like Doggett’s. Far from representing a spontaneous upwelling of populist rage, the protests were tightly orchestrated from the top down by corporate-funded front groups as well as top lobbyists for the health care industry. Call it the return of the Karl Rove playbook: The effort to mobilize the angriest fringe of the Republican base was guided by a conservative dream team that included the same GOP henchmen who Swift-boated John Kerry in 2004, smeared John McCain in 2000, wrote the script for Republican obstructionism on global warming, and harpooned the health care reform effort led by Hillary Clinton in 1993.”The insurance industry is up to the same dirty tricks, using the same devious PR practices it has used for many years, to kill reform,” says Wendell Potter, who stepped down last year as chief of corporate communications for health insurance giant CIGNA. “I’m certain that people showing up at these town halls feel that they’re there on their own — but they don’t realize they’re being incited, ultimately, by the insurance industry and the other special interests.”

Behind the scenes, top Republicans — including House Minority Whip Eric Cantor, Minority Leader John Boehner and the chairman of the GOP’s Senate steering committee, Jim DeMint — worked hand-in-glove with the organizers of the town brawls. Their goal was not only to block health care reform but to bankrupt President Obama’s political capital before he could move on to other key items on his agenda, including curbing climate change and expanding labor rights. As DeMint told an August teleconference of nearly 20,000 town-hall activists, “If we can stop him on this, the administration won’t be able to go on to cap and trade, card check and the other things they want to do.”

This is exactly what happened to President Clinton during his first term in office, when HE proposed a health care reform, and made his wife an integral part of the process.  Folks scoffed when Hillary Clinton said her husband was the target of a “vast right-wing conspiracy,” but she was right then, and the same thing is happening now, and surprise surprise, the same rabble-rousers are involved:

WRITING THE SCRIPT

The campaign to mobilize the town-hall mobs began with a script written by the right’s foremost fearmonger, Frank Luntz. Luntz rose to fame in 1994 as pollster for Newt Gingrich’s Contract With America, and crafted the Republican playbook on global warming. In a May memo, Luntz outlined a battle plan for conservatives to block what he branded the “Washington takeover” of health care — the most terrifying buzz words conjured up in his polls and focus groups.

Online Exclusive:
Read Luntz’s entire memo.

The logic of the language is simple, Luntz writes: “Takeovers are like coups — they both lead to dictators and a loss of freedom.” For a third of all Americans, he adds, the top worry about health care reform is “being denied a procedure or medication because a Washington bureaucrat says no.” Luntz concludes by telling Republicans how best to play the fear card. “It is essential that ‘deny’ and ‘denial’ enter the conservative lexicon immediately,” he writes, “because it is at the core of what scares Americans most about a government takeover of health care.”

Distributed widely to Republicans on Capitol Hill, the memo framed the right-wing attack on health care reform. What Luntz describes as “the best anti-Democrat message” is by now familiar to everyone in America: “No Washington bureaucrat should stand between your family and your doctor… The Democrats want to put Washington politicians in charge of your health care.”

For the archenemies of Obamacare, however, Luntz’s anti-Washington script didn’t go nearly far enough. To amp up the panic, they decided to spin the “takeover” fear to its most extreme conclusion: Washington bureaucrats plan to institute “death panels” that would deny life-sustaining care to the elderly. That portion of the script was drafted by Betsy McCaughey, the former lieutenant governor of New York, who insists that her expertise as a constitutional historian enables her to decipher the 1,017 pages of legalese that comprise the House health care bill.

McCaughey first unveiled her “findings” on July 16th, during an appearance on the radio show of former GOP presidential candidate Fred Thompson. “I have just finished reading the House bill,” McCaughey declared. “I hope that people listening will protect their parents from what’s intended under this bill.” Citing page 425 of HR 3200 — a section that outlines the same kind of optional, end-of-life counseling that Republicans have voted for in the past — McCaughey uncorked a terrifying lie. “Congress,” she said, “would make it mandatory — absolutely require that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner.” The Obama plan, she added, is financed by “shortening your mother or father’s life.”

McCaughey has run this con before. During the debate over Clinton’s health care overhaul in the early 1990s, McCaughey — then an academic at the right-wing Manhattan Institute — wrote an article for The New Republic called “No Exit,” in which she claimed that Hillarycare would prevent even wealthy Americans from “going outside the system to purchase basic health coverage you think is better.” Even though the bill plainly stated that “nothing in this Act” would prohibit consumers from purchasing additional care, McCaughey’s claim was echoed endlessly in the press, with each repetition pounding a stake further into the heart of the reform effort.

McCaughey’s lies were later debunked in a 1995 post-mortem in The Atlantic, and The New Republic recanted the piece in 2006. But what has not been reported until now is that McCaughey’s writing was influenced by Philip Morris, the world’s largest tobacco company, as part of a secret campaign to scuttle Clinton’s health care reform. (The measure would have been funded by a huge increase in tobacco taxes.) In an internal company memo from March 1994, the tobacco giant detailed its strategy to derail Hillarycare through an alliance with conservative think tanks, front groups and media outlets. Integral to the company’s strategy, the memo observed, was an effort to “work on the development of favorable pieces” with “friendly contacts in the media.” The memo, prepared by a Philip Morris executive, mentions only one author by name:

“Worked off-the-record with Manhattan and writer Betsy McCaughey as part of the input to the three-part exposé in The New Republic on what the Clinton plan means to you. The first part detailed specifics of the plan.”

McCaughey did not respond to Rolling Stone’s request for an interview.

The old adage that heads this post is a sad reminder that those who do not learn from the past are doomed to repeat it.  Your parents lost out on the chance for real health care reform when President Clinton was in office.  You stand to lose out now–poised on the very lip of reform–if you do not spread the word that ENOUGH IS ENOUGH!  GOP and Corporate special interests must BUTT OUT!  Dont fall for the phony scare tactics, dont buy their brand of snake oil!!  Dig deeper and realize the political reality of who really has the most to lose by this reform, and its not you or me or your parents or mine…its the Medical Insurance juggernaut, and their GOP operatives, all hell-bent on preventing change…

Folks wishing to read the entire Rolling Stone article can find it online HERE

Grateful acknowledgement to my friend Terry for bringing the article to my attention *hugs*

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A Challenge to all US Citizens from Karl Denninger

•September 19, 2009 • Leave a Comment

I believe Karl is on the money, and I hope by posting this I will in some way help raise the awareness of more folks, and motivate them to DO something.  Ive just contacted California’s Attorney General, and even though I dont expect a response, I will not stop there…next person I am emailing is the Governator.

Anyway, take a look:

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Reading Tea Leaves

•September 18, 2009 • Leave a Comment

My new friend sent me an email that had the following…Any folks of a Libertarian mind-set will probably be livid after reading this because it exposes the ridiculosity (like it?  I made that up!)  of their “anti-government” position!

I, ________________________, do solemnly swear to uphold the principles of a socialism-free society and heretofore pledge my word that I shall strictly adhere to the following:

I will complain about the destruction of 1st Amendment Rights in this country, while I am duly being allowed to exercise my 1st Amendment Rights.

I will complain about the destruction of my 2nd Amendment Rights in this country, while I am duly being allowed to exercise my 2nd Amendment rights by legally but brazenly brandishing unconcealed firearms in public.

I will foreswear the time-honored principles of fairness, decency, and respect by screaming unintelligible platitudes regarding tyranny, Nazi-ism, and socialism at public town halls.  Also.

I pledge to eliminate all government intervention in my life.  I will abstain from the use of and participation in any socialist goods and services including but not limited to the following:

  • Social Security
  • Medicare/Medicaid
  • State Children’s Health Insurance Programs (SCHIP)
  • Police, Fire, and Emergency Services
  • US Postal Service
  • Roads and Highways
  • Air Travel (regulated by the socialist FAA)
  • The US Railway System
  • Public Subways and Metro Systems
  • Public Bus and Lightrail Systems
  • Rest Areas on Highways
  • Sidewalks
  • All Government-Funded Local/State Projects (e.g., see Iowa 2009 federal senate appropriations)
  • Public Water and Sewer Services (goodbye socialist toilet, shower, dishwasher, kitchen sink, outdoor hose!)
  • Public and State Universities and Colleges
  • Public Primary and Secondary Schools
  • Sesame Street
  • Publicly Funded Anti-Drug Use Education for Children
  • Public Museums
  • Libraries
  • Public Parks and Beaches
  • State and National Parks
  • Public Zoos
  • Unemployment Insurance
  • Municipal Garbage and Recycling Services
  • Treatment at Any Hospital or Clinic That Ever Received Funding From Local, State or Federal Government (pretty much all of them)
  • Medical Services and Medications That Were Created or Derived From Any Government Grant or Research Funding (again, pretty much all of them)
  • Socialist Byproducts of Government Investment Such as Duct Tape and Velcro (Nazi-NASA Inventions)
  • Use of the Internets, email, and networked computers, as the DoD’s ARPANET was the basis for subsequent computer networking
  • Foodstuffs, Meats, Produce and Crops That Were Grown With, Fed With, Raised With or That Contain Inputs From Crops Grown With Government Subsidies
  • Clothing Made from Crops (e.g. cotton) That Were Grown With or That Contain Inputs From Government Subsidies

If a veteran of the government-run socialist US military, I will forego my VA benefits and insist on paying for my own medical care

I will not tour socialist government buildings like the Capitol in Washington, D.C.

I pledge to never take myself, my family, or my children on a tour of the following types of socialist locations, including but not limited to:

  • Smithsonian Museums such as the Air and Space Museum or Museum of American History
  • The socialist Washington, Lincoln, and Jefferson Monuments
  • The government-operated Statue of Liberty
  • The Grand Canyon
  • The socialist World War II and Vietnam Veterans Memorials
  • The government-run socialist-propaganda location known as Arlington National Cemetery
  • All other public-funded socialist sites, whether it be in my state or in Washington, DC

I will urge my Member of Congress and Senators to forego their government salary and government-provided healthcare.

I will oppose and condemn the government-funded and therefore socialist military of the United States of America.

I will boycott the products of socialist defense contractors such as GE, Lockheed-Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, Humana, FedEx, General Motors, Honeywell, and hundreds of others that are paid by our socialist government to produce goods for our socialist army.

I will protest socialist security departments such as the Pentagon, FBI, CIA, Department of Homeland Security, TSA, Department of Justice and their socialist employees.

Upon reaching eligible retirement age, I will tear up my socialist Social Security checks.

Upon reaching age 65, I will forego Medicare and pay for my own private health insurance until I die.

SWORN ON A BIBLE AND SIGNED THIS DAY OF __________ IN THE YEAR ___.

_____________   _________________________

Signed       Printed Name/Town and State

UPDATE:  when I originally posted this, I was under the impression that Teabaggers hated any sort of Government intrusion, or resented taxes which pay for services we all need and use daily.

Several months later, I realized, there are facets to this movement, just like there are to any political movement, and I hereby withdraw my previous sarcastic derogatory comments.  I still maintain that any republic needs to tax its citizens to provide services for the common good, but I’ll stop there.  I think any reasonable person can agree that our current system is FLAWED.  I happen to be a card carrying Democrat, however if I ever see that the Teabaggers actually promote an agenda I can get behind, AND they have the numbers to effect change, I’ll be right there with them.  I still believe in most of the ideals that the Democratic party stands for, however, the crooked politicians that inhabit that party have given it a bad name.  Not as bad as the human garbage dumps that infest the GOP, but even ONE crooked Democrat is enough to cry out for change.

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WTF??? is this for real or an Alternate Reality game?

•August 21, 2009 • Leave a Comment

there’s a lot of confusing instructions but basically you start by putting the following IP address in your browser’s address line:

http://174.133.240.117/

when the Google Search Screen comes up, you type alfa-tsentr in the search field….

google window alfa-tsentr

you may get a live feed of a girl in a room, an empty room or this video…

http://sheistheorigin.org/broadcast01/

tell me what you think….is it a very elaborate hoax or something more?

weird thing is, when you get search results, here is one of your choices:

http://alfa-tsentr.ru/en/

It seems to be a mercenary for hire organization similar to Blackwater…to me, having lived thru the Cold War, I know how intimidating Russian Operatives can seem….in fact, they scare me more than American operatives, because they seem to have excised their emotions completely.  By that I mean, Russian operatives seem more cold-hearted or ruthless than their American counterparts….Think Ivan Drago from Rocky 4……bloodthirsty efficiency coupled with physical and mental superiority…not weighed down by pesky sentimentalism that we Americans seem to carry with us like a fluffy blanket…MOMMY!

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CALLING ALL EGGHEADS–Yale offering FREE online courses!

•August 19, 2009 • Leave a Comment

LINK

I dont know about YOU boys and girls, but this got my grey matter all excited!  Nothing says “posh education” quite like YALE, except maybe PRINCETON….

anyway, take a look and see if there isnt something that interests you…after all its FREE (gotta love that right?) and it would sure look good on a resume!

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Health Care opponents dont speak for YOU, FOLLOW THE MONEY SHEEPLE!

•August 15, 2009 • 3 Comments

Im sure everyone has heard by now about how “town hall” meetings have been disrupted by irate folks angry at what they see as unnecessary government intrusion into their most personal of choices, namely health care decisions…

I am truly amazed that folks arent more discerning here….come ON!  Big Pharma, and Big name Medical Insurance companies have had their cake and eaten it too for far too long now, and who really stands to lose the most if Health Care is centralized?  YOU GUESSED IT, Insurance companies, and other middle-men who have skimmed the cream of the monetary crop now for decades!  Why do you think they pulled out all the stops when the Clintons tried to overhaul the medical care industry?  Because they knew they all stood to lose BILLIONS!  HUNDREDS OF BILLIONS!  Its just incomprehensible to me how any reasonable thinking American wouldnt embrace Health Care reform.  All I can say is:  FOLLOW THE MONEY PEOPLE!!  SEE WHO WOULD HURT THE MOST IF THIS PASSED! Not you or I, thats for DAMN sure!!!!!

LINK

WASHINGTON — The stubborn yet false rumor that President Obama’s health care proposals would create government-sponsored “death panels” to decide which patients were worthy of living seemed to arise from nowhere in recent weeks.

Advanced even this week by Republican stalwarts including the party’s last vice-presidential nominee, Sarah Palin, and Charles E. Grassley, the veteran Iowa senator, the nature of the assertion nonetheless seemed reminiscent of the modern-day viral Internet campaigns that dogged Mr. Obama last year, falsely calling him a Muslim and questioning his nationality.

But the rumor — which has come up at Congressional town-hall-style meetings this week in spite of an avalanche of reports laying out why it was false — was not born of anonymous e-mailers, partisan bloggers or stealthy cyberconspiracy theorists.

Rather, it has a far more mainstream provenance, openly emanating months ago from many of the same pundits and conservative media outlets that were central in defeating President Bill Clinton’s health care proposals 16 years ago, including the editorial board of The Washington Times, the American Spectator magazine and Betsy McCaughey, whose 1994 health care critique made her a star of the conservative movement (and ultimately, New York’s lieutenant governor).

There is nothing in any of the legislative proposals that would call for the creation of death panels or any other governmental body that would cut off care for the critically ill as a cost-cutting measure. But over the course of the past few months, early, stated fears from anti-abortion conservatives that Mr. Obama would pursue a pro-abortion, pro-euthanasia agenda, combined with twisted accounts of actual legislative proposals that would provide financing for optional consultations with doctors about hospice care and other “end of life” services, fed the rumor to the point where it overcame the debate.

On Thursday, Mr. Grassley said in a statement that he and others in the small group of senators that was trying to negotiate a health care plan had dropped any “end of life” proposals from consideration.

A pending House bill has language authorizing Medicare to finance beneficiaries’ consultations with professionals on whether to authorize aggressive and potentially life-saving interventions later in life. Though the consultations would be voluntary, and a similar provision passed in Congress last year without such a furor, Mr. Grassley said it was being dropped in the Senate “because of the way they could be misinterpreted and implemented incorrectly.”

The extent to which it and other provisions have been misinterpreted in recent days, notably by angry speakers at recent town hall meetings but also by Ms. Palin — who popularized the “death panel” phrase — has surprised longtime advocates of changes to the health care system.

“I guess what surprised me is the ferocity, it’s much stronger than I expected,” said John Rother, the executive vice president of AARP, which is supportive of the health care proposals and has repeatedly declared the “death panel” rumors false. “It’s people who are ideologically opposed to Mr. Obama, and this is the opportunity to weaken the president.”

The specter of government-sponsored, forced euthanasia was raised as early as Nov. 23, just weeks after the election and long before any legislation had been drafted, in an outlet with opinion pages decidedly opposed to Mr. Obama, The Washington Times.

In an editorial, the newspaper reminded its readers of the Aktion T4 program of Nazi Germany in which “children and adults with disabilities, and anyone anywhere in the Third Reich was subject to execution who was blind, deaf, senile, retarded, or had any significant neurological condition.”

Noting the “administrative predilections” of the new team at the White House, it urged “anyone who sees the current climate as a budding T4 program to win the hearts and minds of deniers.”

The editorial captured broader concerns about Mr. Obama’s abortion rights philosophy held among socially conservative Americans who did not vote for him. But it did not directly tie forced euthanasia to health care plans of Mr. Obama and his Democratic allies in Congress.

When the Democrats included money for family planning in a proposed version of the stimulus bill in January, the socially conservative George Neumayr wrote for the American Spectator: “Euthanasia is another shovel ready job for Pelosi to assign to the states. Reducing health care costs under Obama’s plan, after all, counts as economic stimulus, too — controlling life, controlling death, controlling costs.”

Ms. McCaughey, whose 1994 critique of Mr. Clinton’s plan was hotly disputed after its publication in The New Republic, weighed in around the same time.

She warned that a provision in the stimulus bill would create a bureaucracy to “monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost-effective,” was carried in a commentary she wrote for Bloomberg News that gained resonance throughout the conservative media, most notably with Rush Limbaugh and the Fox News Channel host Glenn Beck.

The legislation did not direct the coordinator to dictate doctors’ treatments. A separate part of the law — regarding a council set up to coordinate research comparing the effectiveness of treatments — states that the council’s recommendations cannot “be construed as mandates or clinical guidelines for payment, coverage or treatment.”

But Ms. McCaughey’s article provided another opportunity for others to raise the specter of forced euthanasia. “Sometimes for the common good, you just have to say, ‘Hey, Grandpa, you’ve had a good life,’ ” Mr. Beck said.

The syndicated conservative columnist Cal Thomas wrote, “No one should be surprised at the coming embrace of euthanasia.” The Washington Times editorial page reprised its reference to the Nazis, quoting the Aktion T4 program: “It must be made clear to anyone suffering from an incurable disease that the useless dissipation of costly medications drawn from the public store cannot be justified.”

The notion was picked up by various conservative groups, but still, as Mr. Obama and Congress remained focused on other matters, it did not gain wide attention. Former Senator Tom Daschle of South Dakota, an advocate for the health care proposals, said he was occasionally confronted with the “forced euthanasia” accusation at forums on the plans, but came to see it as an advantage. “Almost automatically you have most of the audience on your side,” Mr. Daschle said. “Any rational normal person isn’t going to believe that assertion.”

But as Congress developed its legislation this summer, critics seized on provisions requiring Medicare financing for “end of life” consultations, bringing the debate to a peak. To David Brock, a former conservative journalist who once impugned the Clintons but now runs a group that monitors and defends against attacks on liberals, the uproar is a reminder of what has changed — the creation of groups like his — and what has not.

“In the 90s, every misrepresentation under the sun was made about the Clinton plan and there was no real capacity to push back,” he said. “Now, there is that capacity.”

Still, one proponent of the euthanasia theory, Mr. Neumayr, said he saw no reason to stop making the claim.

“I think a government-run plan that is administered by politicians and bureaucrats who support euthanasia is inevitably going to reflect that view,” he said, “and I don’t think that’s a crazy leap.”

ANOTHER ARTICLE:

Who’s behind the attacks on a health care overhaul?

By Margaret Talev | McClatchy Newspapers

WASHINGTON — Much of the money and strategy behind the so-called grassroots groups organizing opposition to the Democrats’ health care plans comes from conservative political consultants, professional organizers and millionaires, some of whom hold financial stakes in the outcome.

If President Barack Obama and Congress extend health insurance coverage to millions of uninsured Americans, raise taxes on the wealthy to pay for it, and limit insurers’ discretion on who they cover and what they charge, that could pinch these opponents.

Most of them say they oppose big government in principle. Despite Obama’s assurances to the contrary, many of them insist that the Democrats’ legislation is but the first step toward creation of a single-payer system, where the federal government hires the doctors, approves treatments, sets the rules and imperils profit.

These opposition groups appear to have spent at least $10 million so far on ads attacking the Democrats’ plans. Still, supporters of a health care overhaul have outspent opponents by more than 2-to-1 so far, according to Evan Tracey of the Campaign Media Analysis Group, which tracks ad spending. Supporters include drug makers angling for their own protections, unions, the American Medical Association and AARP, the seniors’ lobby. Supporters announced this week that they intend to spend $150 million promoting an overhaul.

The opposition groups’ names sound catchy and populist: Patients First. Patients United. Americans for Prosperity. Conservatives for Patients’ Rights. FreedomWorks. 60 Plus. Club for Growth.

Here’s who’s behind them:

Conservatives for Patients’ Rights is led by health care entrepreneur Rick Scott, the co-founder of Solantic urgent care walk-in centers, which he’s spread across Florida and is looking to expand. While 80 percent of its patients have at least some insurance, Solantic also bills itself as an alternative to emergency-room care and a resource for patients with no insurance.

Scott left his job as CEO of the Columbia/HCA hospitals during a federal Medicare fraud probe in 1997 that led to a historic $1.7 billion settlement. He wasn’t prosecuted and got a golden parachute.

Solantic’s growth, Scott said in a telephone interview, is due in part to the trend in which “deductibles and co-payments are going up. As that happens, more people want us.”

Scott said he wasn’t concerned that the Democrats’ proposed revisions would undercut his business: “It’s irrelevant to us.” Instead, he said he opposes the Democrats’ plans because he doesn’t believe that government involvement will contain health care costs. He sees it killing off the best private insurance plans and ultimately leading to a single-payer system, which he predicted would lead to waiting lists and denial of treatments.

Scott said he supports some government intervention — such as preventing insurers from dumping sick patients. Those who can’t afford coverage on their own should get vouchers or tax credits, he said.

FreedomWorks, which has been advocating against the overhaul but has not launched TV ads, is chaired by Dick Armey, the former Republican majority leader of the House of Representatives from Texas.

But also noteworthy are the group’s other backers and board members. They include billionaire flat-tax proponent and former GOP presidential candidate Steve Forbes; Richard J. Stephenson, who founded Cancer Treatment Centers of America, which offers alternative as well as standard therapies, sometimes not covered by insurance; and Frank M. Sands, Sr., chief executive officer of an investment management firm whose offerings include a Healthcare Leaders portfolio.

“They’re on our board because they support lower taxes, less government and more freedom,” said FreedomWorks spokesman Adam Brandon.

Matt Kibbe, the chief executive officer of FreedomWorks, said its members believe that “the government is already way too involved in the nation’s health care system” and that government is to blame for health-cost inflation.

Kibbe acknowledged that private insurance is out of reach for many small businesses and individuals, but he contended that can be dealt with without creating a government-managed exchange. Like Scott, he expressed concern that more government interference would lead to a single-payer system, which would “inevitably” impose rationing of treatments to contain costs.

Patients First and Patients United are creations of a larger group called Americans for Prosperity. AFP’s Web site describes a grassroots organization with more than 700,000 members that advocates “for public policies that champion the principles of entrepreneurship and fiscal and regulatory restraint.”

It was started by billionaire David Koch, of the Koch Industries oil family, one of the country’s top donors to conservative, free-market causes. The foundation’s board includes Art Pope, a former North Carolina legislator also involved in conservative causes, whose family owns hundreds of discount stores.

Tim Phillips, AFP’s president, is a former Republican congressional staffer who helped former Christian Coalition executive director Ralph Reed start up the consulting firm Century Strategies in the 1990s. Clients paid the firm to build Christian grassroots support for various business causes. That included work for since-convicted lobbyist Jack Abramoff.

The group, along with FreedomWorks, was involved in promoting the anti-tax “tea parties” earlier this year. AFP also is organizing a campaign “exposing the ballooning costs of global warming hysteria.”

In an interview, AFP’s Phillips said that he couldn’t think of anyone on his board with a direct financial stake in the health care industry. “It’s more freedom-based,” he said. “They have a deep interest in protecting economic freedoms.” He also said that no one in his organization believes that more government involvement in health care will lead to reduced costs for taxpayers.

By Labor Day, he said, his group will have organized 600 rallies on health care.

“Americans are looking at these rallies that are happening and the town-hall turnouts, and they say, ‘No one group out of thin air could do that,’” Phillips said. “The American people can see through the attacks on the other side, where they try to vilify these groups as being corporate groups or front groups. They’re believing it is in fact a broad groundswell.

“We’re out here saying the truth, which is costs are going to go up and quality is going to go down. And what’s the other side saying? ‘Oh, these are front groups, these are all rich people.’ The attack route’s not going to work. It’s not so far.”

Two other grassroots groups have financed ads targeting peoples’ fears that more government involvement would hurt seniors and hasten end-of-life decisions.

One of them, Club for Growth, which advocates lower taxes, is led by president Chris Chocola, a former Republican congressman from Indiana who lost his re-election bid in 2006. Club for Growth this week announced a $1.2 million ad campaign against a health care overhaul, to run in North Dakota, Colorado, Arkansas and Nevada.

The other, 60 Plus Association, is a conservative senior advocacy group that wants to abolish the estate tax. Singer Pat Boone is the group’s national spokesman. Chairman Jim Martin started the group in 1992 with fund-raising help from conservative direct mail guru Richard Viguerie. It spent $1.5 million on TV ads opposing a healthcare overhaul in the last week.

Martin declined to identify his major donors. In 2006, he acknowledged that his group was getting funding from the pharmaceutical industry. But this year, pharmaceutical companies lead the spending spree on behalf of a health care overhaul.

“The shoe’s on the other foot,” Martin said. “They’ve gotten in bed with the White House.”

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Why Reagonomics and other Voodoo Economics programs FAIL

•August 3, 2009 • 2 Comments

Anyone who has seen firsthand the smoke and mirrors that came about during the Reagan years must now be screaming daily “I TOLD YOU SO!!!”  Why?  because it is patently OBVIOUS what happens when you pander to the Corporations and neglect the middle class, or the working classes.  In a nuthsell, Reagan said, you give tax breaks to the rich, it will “trickle down” to the poor. Then Vice President Bush termed this “voodoo economics,” and history is proving him right…..

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So, Reagan (even though you’re dead) pay attention because YOU WERE FRIGGING WRONG!  The rich dont give a damn about the less fortunate, noblesse oblige is a relic, and giving the multinationals free reign and allowing them to offshore and downsize and outsource and close factories in towns all across America brought us to this:  FOLKS WHO CANT PAY THEIR BILLS BECAUSE THE JOBS WENT AWAY….Then, you have the greedy lenders/bankers/mortgage industry….all to willing to throw caution to the winds and ignore the principles of sound lending….getting “creative” with interest rates and suckering in folks who foolishly forget to be prudent when they figure the cost of a home.  One income or two?  doesnt matter, let tomorrow take care of itself.  We’ll delay the inevitable with a balloon payment and an ARM.

On top of the bailout (which was the SINGLE WORST ECONOMIC CATASTROPHE to befall this country, is it any wonder that:

AP ENTERPRISE: Federal tax revenues plummeting

By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer 2 hrs 47 mins ago

WASHINGTON – The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.

“Our tax system is already inadequate to support the promises our government has made,” said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.

“This just adds to the problem.”

While much of Washington is focused on how to pay for new programs such as overhauling health care — at a cost of $1 trillion over the next decade — existing programs are feeling the pinch, too.

Social Security is in danger of running out of money earlier than the government projected just a few month ago. Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining.

The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies’ spending by 11 percent in 2010 and military spending by 4 percent.

For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.

Is there a way out of the financial mess?

A key factor is the economy’s health. The future of current programs — not to mention the new ones Obama is proposing — will depend largely on how fast the economy recovers from the recession, said William Gale, co-director of the Tax Policy Center.

“The numbers for 2009 are striking, head-snapping. But what really matters is what happens next,” said Gale, who previously taught economics at UCLA and was an adviser to President George H. W. Bush’s Council of Economic Advisers.

“If it’s just one year, then it’s a remarkable thing, but it’s totally manageable. If the economy doesn’t recover soon, it doesn’t matter what your social, economic and political agenda is. There’s not going to be any revenue to pay for it.”

A small part of the drop in tax receipts can be attributed to new tax credits for individuals and corporations enacted in February as part of the $787 billion economic stimulus package. The sheer magnitude of the tax decline, however, points to the deep recession that is reducing incomes, wiping out corporate profits and straining government programs.

Social Security tax receipts are down less than a percentage point from last year, but in May the government had been projecting a slight increase. At the time, the government’s best estimate was that Social Security would start to pay out more money than it receives in taxes in 2016, and that the fund would be depleted in 2037 unless changes are enacted.

Some experts think the sour economy has made those numbers outdated.

“You could easily move that number up three or four years, then you’re talking about 2013, and that’s not very far off,” said Kent Smetters, associate professor of insurance and risk management at the University of Pennsylvania.

The government’s projections included best- and worst-case scenarios. Under the worst, Social Security would start to pay out more money than it received in taxes in 2013, and the fund would be depleted in 2029.

The fund’s trustees are still confident the solvency dates are within the range of the worst-case scenario, said Jason Fichtner, the Social Security Administration’s acting deputy commissioner.

“We’re not outside our boundaries yet,” Fichtner said. “As the recovery comes, we’ll see how that plays out.”

The recession’s toll on Social Security makes it even more urgent for Congress to address the fund’s long-term solvency, said Sen. Herb Kohl, D-Wis., chairman of the Senate Aging Committee.

“Over the past year, millions of older Americans have watched their retirement savings crumble, making the guaranteed income of Social Security more important than ever,” Kohl said.

President Barack Obama has said he wants to tackle Social Security next year, after he clears an already crowded agenda that includes overhauling health care, addressing climate change and imposing new regulations on financial companies.

Medicare tax receipts are also down less than a percentage point for the year, pretty close to government projections. Medicare started paying out more money than it received last year.

Meanwhile, the recession is taking a toll on fuel and industry excise taxes that pay for highway, mass transit and airport projects. Fuel taxes that support road construction and mass transit projects are on pace to fall for the second straight year. Receipts from taxes on jet fuel and airline tickets are also dropping, meaning Congress will have to borrow more money to fund airport projects and the Federal Aviation Administration.

Last week, Congress voted to spend $7 billion to replenish the highway fund, which would otherwise run out of money in August. Congress spent $8 billion to replenish the fund last year.

Rep. Richard Neal, D-Mass., chairman of the House subcommittee that oversees fuel taxes, is working on a package to make the fund more self-sufficient. The U.S. Chamber of Commerce, which doesn’t back many tax increases, supports increasing the federal gasoline tax, currently 18.4 cents per gallon.

Well DUH boys and girls!!  It doesnt take a rocket scientist to figure this out!!  you take away the jobs, (or allow them to go away) you lose tax revenue.  Someone get a frigging taser, we need to wake up our so-called elected officials and get them to play HARDBALL with those happy-go-lucky corporations who have been sliding thanks to dumbass loopholes they acquired by lobbying and campaign financing and other nefarious means.

I hope and pray there is at least ONE legislator out there who is paying attention.  At the end of the day, he/she may be the only one left standing….

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Why I love Karl Denninger…

•August 2, 2009 • Leave a Comment

Is the FDIC broke?

http://market-ticker.org/

First, we have Corus, which reported a negative Tier 1 Ratio.  That is, they are formally “in the hole” in terms of assets .vs. liabilities.  This is never supposed to happen – but it did, “Prompt Corrective Action” be damned.

Next, we have Guaranty Bank, which also has a negative core capital ratio.  They have been trying to sell themselves (gee, I wonder why?) for a while without success.  Here’s the relevant quote from their 8-K:

Based on these adjustments, the Bank’s core capital ratio stood at negative 5.78% as of March 31, 2009. The Bank’s total risk based capital ratio as of March 31, 2009 stood at negative 5.52%. Both of these ratios result in the Bank being considered critically under-capitalized under regulatory prompt corrective action standards.

Yet Prompt Corrective Action (PCA) – a law, by the way, not a suggestion – has once again not been followed.

Finally, we have Colonial. I made a nice chunk of coin shorting and PUTting that turkey last year, when their CEO (and a lot of other people) said they were “very conservative.”  Uh huh.  My read of their balance sheet said they were (like many other regional banks) massively over-exposed to condo construction loans in….. you guessed it…. Florida (which incidentally is what killed Corus.)  Oops.  But here’s the money quote on Colonial:

If the FDIC were to seize Colonial, it would be the sixth-largest seizure, by assets, in American history. Such a large failure could strain the bank safety net. Colonial has $20 billion in deposits, while the FDIC insurance fund has dropped below $15 billion. The FDIC wouldn’t have to cover every dime, but when Florida’s BankUnited, with $12.8 billion in assets, failed earlier this year, it cost regulators nearly $5 billion.

Add all three of these up and tell me what you think is going on?

These three are not small banks.  They are significant regional institutions, unlike the tiny little banks that we hear about every Friday after the close of business.

Here’s the nut to the story above: When BankUnited was seized note that the total loss on assets was some 40%.  They were not in the hole by anywhere near that much according to their so-called “accounting.”  Neither was IndyMac, but they also created an enormous loss.

So what’s going on here?

Simple: An enormous number of banks are holding loans at or close to “par” that really aren’t.  They’re holding mortgages at massively-inflated values, even on defaulted properties, and this is why you are not seeing more foreclosure sales – that is, why inventory is being held back.  If they sell it the accountants will force recognition of the loss, which will render them instantly insolvent, but so long as they “extend and pretend” they are marking these loans way, way above recovery value.  The upshot of this is that these firms’ balance sheet claims on asset values are massively inflated, regulators know it, and they’re intentionally ignoring it.

I have been sounding the alarm on this for more than a year; it has in fact been the focus of multiple petitions to Congress and the cause of thousands of dollars of personal expense faxing letters and Tickers to members warning them of the danger of letting this sort of accounting misdirection continue.

The claim of banking sector health and “successful rescue by Treasury and The Fed” is in fact false.  No such thing has occurred.  What’s going on here is nothing more or less than intentional false claims of asset “valuation”, which is repeatedly exposed when the FDIC is finally forced to seize institutions, exposing the lies.  Then, suddenly, 20, 30, even 40% losses on alleged “asset books” come out into the light and the taxpayer eats them.

The bank executives and accountants that played this game with the books should have been arrested and the bank thrown into receivership over a year ago.

Oh by the way, just as with all such “extend and pretend” games (otherwise known as fraud when practiced by anyone without a “government can cheat all it wants and nobody goes to jail” card) the longer you play this game, the longer you wait to do the right thing, the more money it costs you (in this case the Taxpayer gets the inevitable bill.)

For those of you who say that the FDIC is “not the responsible party”, that’s nonsense.  OTS/OCC are the agencies that perform primary regulation for any federally-chartered bank but the FDIC is the agency that is responsible for resolution, and they are always working together in this regard.

Yes, the FDIC has a “backup credit line” (a big one at that!) from Treasury, but the fact remains that about 75% of the FDIC’s “insurance fund” has been depleted over the last year due to massive and intentional failures to enforce Prompt Corrective Action, with the most-expensive and most-outrageous (thus far) being IndyMac, where OTS was found (by the government’s own auditors!) to be complicit in backdating deposits to “cook” capital ratios!

Riddle me this folks: What possible positive purpose can come from the FDIC refusing to seize these institutions when their capital ratios are either negative or clearly going to become negative?  These banks have all been train wrecks that I and others have written about for more than a year; Colonial was referenced in a Ticker on the 14th of July of 2008, with my first warning on them more than two years ago in April of 2007.

What do I think?

I believe the FDIC is broke and knows it; that under the law they should have seized these three banks (and many dozens more, including some really big ones) some time ago, but doing so will force them to tap the Treasury “emergency” credit line. They’re well-aware that this could instill quite a bit of panic in the public (never mind Congress!); as such they, along with OTS and OCC are conspiring to (once again) hide the truth and pray for an economic recovery before they are forced to act as the law demanded months or even years ago!

This is nothing more than an attempt to keep this graph from looking dramatically worse than it already does and keep the “green shoot” lie alive to pump the stock market so that Americans “feel better.” Big banking and other executives are taking advantage of this lie by selling shares into an overheated market (which they have been doing, by the way: Insider sales are at levels last seen just before the top in October of 2007!)

Hint to Sheila Bair, Tim Geithner, Dugan and Ben Bernanke: It won’t work and you’re going to precipitate a credit and stock market meltdown worse than last fall’s.  You may have already passed the point where you are unable to avoid that sort of damage, but if you don’t act now the outcome is virtually assured.

Do your damn job and do it now; we must stop the fraud and force the insolvent into the open – all of them – if we are to have a durable economic recovery!

Disclosure: No position in any of these turkeys; I called all of them but Guaranty, which I didn’t follow, zeros a long time ago.


Karl Denninger has always been on top of every fiscal crisis, I hope and pray this one can be mitigated before its too late…

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