Archive for December, 2010

WikiLeaks…What We Really Learned!

December 7, 2010

A few years ago, the term ….wikileaks… might have been a symptom an older man might have complained to his doctor about, for which the prescription would have been…… Depends underwear.

But Wikileaks is that rogue Australian company which has somehow managed to get its hands on…illegally most governments say……. ultra-secret classified
documents that posed a threat of rocking the international espionage world…

The data came out this past Sunday…more than 250,000 documents…leaked United States embassy cables……according to Wikileaks…..the largest set of
confidential documents ever to be released into the public domain. Wikileaks claimed the documents would provide an unprecedented insight into the US Government’s foreign activities.

The cables, which date from 1966 to the end of February this year, contained confidential communications between 274 embassies in countries throughout the world and the State Department in Washington DC. More than 15,000 of the cables are classified as Secret.

So what did we learn from all of this?

To begin with, it appears that James Bond and Felix Leiter are alive and well.
International espionage did not become extinct with the end of the cold war or the fall of the Berlin wall.

We learned that almost every country is scared out of their pants over Iran and their nuclear ambitions…well, we already knew that…

…we learned that the United States and Russia disagree that North Korea and Iran are working together….it seems we knew that too!

..we learned that there is the possibility of war or military action against
Iran by Israel….again, no surprises there.

..and we discovered that most dignitaries don’t think a whole lot about
Britain’s Prince Charles….absolutely shocking!

What was regarded as possibly earth shattering releases by Wikileaks has largely been greeted with a shrug and a smile…now Wikileaks founder Julian Assange is saying their next round of releases has the potential to take down……… a
big US Bank…

I hope Julian will forgive the world for not getting too worried about

High Frequency Trading

December 7, 2010

One of the newer terms in the stock market is called High Frequency Trading or HFT

HFT is computerized trading of stocks, employing high speed computers to analyze market data and using algorithms to utilizing trading opportunities.

An algorithm is a set of rules for solving a problem in a finite number of
steps…these rules are fed into a computer to determine and take advantage of tiny fluctuations in the market or a particular stock …………..and initiate a trade to pounce on that tiny fluctuation.

Back in the day, brokers and financial analysts preached the virtue of buy and hold. In the late 90’s, the day trader was born…………basically a single individual who began the trading day with no holdings and tried to end up in the same position by the end of the day, hoping to profit on several  completed transactions.

High frequency trading is like hundreds of day traders on steroids,
characterized by computers searching for  trading opportunities that may exist for a couple of hours…or even just a few seconds.

High frequency trading algorithms work with any financial instrument that can be traded electronically.High frequency traders compete with other high frequency
traders, for very small, and very consistent profits….sometimes a fraction of a penny on each trade, but when multiplied by thousands and thousands of computer-generated trades….can and does add up to to millions of dollars.

Traders and regulators disagree on whether HFT helped to create or to stabilize the brief but dramatic market crash last May 6th.

CME Group, a large futures exchange, stated that its investigation had found no support that HFT was related to the crash, and actually stated it had a market stabilizing effect

A contradictory report by the U.S. Securities and Exchange Commission  stated that the actions of high-frequency trading firms on May 6th contributed to volatility during the crash.

So is HFT good for the market and investors or is it bad? Right now, there are as many opinions on either side as there are grains of sand on the beach….

……….but I wouldn’t be surprised to see the Feds someday slap a one penny per transaction tax on all trades, which if enacted, would send High Frequency Trading the way of the dinosaurs.

Manufacturing Some Manufacturing Jobs

December 7, 2010

The United States and much of Europe have painted themselves into a corner.

So many manufacturing jobs have left the US and Europe for Asian countries that it is becoming more and more difficult to find anything that is made domestically.

The average monthly wage of a Chinese manufacturing employee is 3% that of a similar employee in the US…… it any wonder corporations, struggling to compete on a global level …….are outsourcing more and more of whatwere good, solid jobs…the backbone  of the economy?

Donald Trump, who once said that China thinks we’re stupid SOBs……suggested the US should place a 25% tariff on all Chinese products entering the country.
Trump feels that would escalate the cost of Chinese goods here in the US to the point that corporations would bring those manufacturing jobs back home.

The problem with that idea is, 25% is not nearly enough. With China’s
artificially devalued currency and their incredibly low average wage, it might take a tariff of 100 or 200% to dissuade American and European consumers from buying Chinese products…and what you would end up with is not jobs coming back, but unbelievably high inflation as prices of everything would skyrocket.

Many economists have suggested a weaker U.S dollar will boost domestic
manufacturing production, which in turn will lift employment and stimulate…. economic growth.

BUT, a weaker U.S dollar will turn European exports priced in euros more expensive, also tourism in European countries will slow dramatically.

In either scenario, the only winner…is China, who, by the way, holds a
staggering amount of US debt.

In 1986, the total US debt was 2 trillion dollars….we’ve added that much debt and more, during the Obama administration alone.

Want to be sure your kids have an advantage in the world when they grow up? Make sure they learn Chinese as a second language, they may well need it.

MoneyTV Election Awards!

December 7, 2010

Well, the midterm elections are behind us and it is now time for the

MoneyTV 2010 Election Awards! …recognizing deserving individuals and groups which made our election season so  riveting.

The Hypocrite Award goes to California attorney Gloria Allred,  tireless
champion of women’s rights. Her  stunt with the illegal alien maid ended up being the turning point in keeping a very capable woman out of the California governor’s mansion…great work Gloria, we can hardly wait for your next press conference.

The Cheech and Chong Award goes to the voters in California. Faced with a ballot measure to legalize marijuana for recreational use, they apparently celebrated too early and forgot to actually go out and vote, while those who did make it to the polls….well, that brings us to the…

The Sheep Award, going again to the voters of California, who, being given the opportunity to clean house like the rest of the country, chose instead to follow the shephard and re-elected Sanchez, Pelosi, Boxer and…..that brings us to….

The Sequel Award….it’s Moonbeam, the Sequel, coming to a California governor’s mansion in January, Jerry Brown gets another crack at being the chief executive of the country’s most populated state.

The Onion Award goes to incoming Speaker of the House John Boehner, whose emotion-filled speech Tuesday night reminded everyone why it is not a good idea to chop onions right before proclaiming victory.

The Thank God For Union Support Award goes to Harry Reid, long considered to be done in Nevada, for pulling out his Senate Race in a state where the voting machines were serviced by the same employee union who strongly supported his reelection.

The You’ve Got to be Kidding Award goes to the San Francisco city council, who chose election day to pass a ban on Happy Meals, a measure they called a victory for food justice.

And finally, the Get Out of Dodge Award goes to President Obama, as he bolts for India with an entourage of 3000 people, a trip costing taxpayers a quarter of a billion dollars per day.

You just can’t make this stuff up!

Election Fraud

December 7, 2010

Depending upon which part of the world you are watching this program from and MoneyTV is seen in more than 75 countries, the midterm elections in the US are just coming up or …have  just passed.

But what is turning into a very disturbing trend is all of the news which broke this week about election ballot scams and voter fraud.

In Florida, a Daytona Beach commissioner and his campaign manager were arrested this week for allegedly obtaining absentee ballots in the names of people who did not order them, and then casting the votes for their own campaign.

In Central California, there are reports of people going door to door, offering to hand deliver absentee ballots to the polls, which is illegal.

In Nevada, concern was raised when it was reported by early voters that certain voting machines had the votes for US Senator already pre-cast.

In Houston, investigators found vacant lots which had several voters registered on them and an eight-bed halfway house with more than 40 voters registered at its address.

If it is so easy to fraudulently register to vote, how many votes cast are
legitimate and how many are bogus?

We all remember the debacle of ten years ago during the general election, when  Florida became the swing state and the country’s next President hung in the balance of some 500 votes. We learned what a chad was and even became acquainted with a hanging chad.

Is this the United States we’re talking about…or some banana republic?

There are those who believe all of this talk about voting and registration fraud is just that…all talk, but it always seems that where there is smoke, there is fire!

If it is so easy to falsify the registration of a voter, then how safe are our
elections from fraud?

Just this week, a federal appeals judge struck down an Arizona law which
required someone registering to vote provide proof they are an American
citizen…imagine that?

You can register to vote in Arizona and you don’t have to prove that you have the right to do so.

Many many millions of dollars are spent by candidates and special interest groups to get you to vote one way or another. Anytime that kind of money is at stake, there are those who are going to try to beat the system.

Chilean Miners

December 7, 2010

For two days this week, I was transfixed by the images on my television screen as the incredible story of the rescue of the Chilean miners unfolded before me.

The idea of being trapped underground…a half mile underground no less, essentially buried alive for more than two months…………… is mentally staggering.

Think back to the events of your life since the 5th of August, go ahead, look back on your calendars. Maybe there was a family vacation near the end of the Summer, maybe you went to someone’s wedding, your kids started the new school year, there was no doubt a Labor Day BBQ, perhaps you bought a car, maybe you started to pay attention to the upcoming fall elections…all during that time,
those 33 men were trapped underground, clinging to the hope that their brother and sister miners on the surface were doing all that was humanly and technologically possible to get them out.

More than two months buried alive underground, 33 men confined to a space about the size of a tiny apartment, no bathroom facilities, hot, humid and tremendously uncomfortable…yet these men were able to form the semblance of a society under those horrific conditions, clinging to hope and faith they would someday soon, again, see the light of day.

It is truly a miracle of human perseverance and achievement and it greatly overshadows the day to day issues we deal with in our lives.

Watching the seven year old son of Florencio Avalos, the first miner to emerge from the rescue capsule, break into uncontrollable sobs as his Dad was reunited with him and the rest of the family, it was hard not to get choked up. My first instinct was to go find my daughter in the house and give her a big hug….I am sure many felt the same way.

If our fellow human beings can overcome such incredible obstacles, then what we deal with on a daily basis…is a piece of cake!

California Gubernatorial Nonsense

December 7, 2010

When I was growing up in blue collar Connecticut and Maine, people there used to joke about California being the land of fruits and nuts, they would make fun of the California laid back lifestyle and the counter culture.

They must be having a good old fashioned belly laugh right about now.

I have been living in California for 30 years  and consider myself a naturalized native. But I am enormously embarrassed by what is going on in the state’s gubernatorial election, a very close and very dirty race between Attorney General Jerry Brown and former Ebay CEO Meg Whitman.

You remember Jerry Brown…he was California governor in the 1970s, he dated Linda Rondstat, was nicknamed “moonbeam”, he even questioned Bill Clinton’s relationship with the truth.

How about Meg Whitman? She was the hard nosed and blunt CEO of a dot com company, used to push around her employees around, forgot to vote in elections and…gasp!…hired an undocumented worker as a maid….in California, imagine that!

You probably noticed that my two descriptions of the candidates had nary a mention of their qualifications, their campaign promises, or what legislative and governing agenda they plan to pursue.

The answer to that is simple and I am sure at the Wonderbar Restaurant in Biddeford, Maine, they’re having a great giggle about this….

…because all California voters are being subjected to is useless and needless fluff about the two candidates…the media is covering the campaign with all of the credibility and journalistic integrity of a Lindsay Lohan driving academy.

I have no idea if Jerry Brown has matured and weathered into an able
administrator, capable of governing the country’s most populated state and helping to pull us out of an economic quandry, because all I see are video clips from nearly 20 years ago, where his record as California governor is being blasted by Bill Clinton! But today Clinton endorses Brown, so go figure.

I cannot make an intelligent decision about whether Meg Whitman can use her experience as CEO of arguably the most successful dot com company ever, to turn California back into the Golden State, because all I am subjected to is that cartoon character, headline hungry attorney, Gloria Allred, no longer defending Octomom, but now taking up the cause of an admitted illegal alien who committed a felony crime by using someone else’s social security number!

Where are the issues, where are the solutions to our problems? How are we going to fix the once great state of California?

The state is flat broke and getting broker by the minute, yet the media covering the gubernatorial campaign is giving us nothing but fruits, nuts and paparazzi journalism.

Unemployment Woes

December 7, 2010

Unemployment in the US remains in the 10% range, mind you, that is the official  number. That doesn’t take into account the number of people who have simply  given up looking for work and are not officially counted in the tally.

In some of the hardest hit states, that number is perilously close to 18%.

There is some good, albeit temporary news on the horizon, however. In another sign the economy is beginning to shake some dust off its boots, US retailers are expected to boost holiday season hirings this year, at numbers greater than we have seen the last three years.

Toys R Us, for example, is expected to double its work force, hiring 45,000 seasonal workers, in an effort to staff and support their Toys R Us Express stores, which have been popping up in malls all over the country.

Retail giant Macy’s just announced it will add 65,000 jobs in anticipation of a stronger holiday season in 2010.

According to the web site, which focuses on hourly jobs, 50 percent of hourly hiring managers will add seasonal workers this year, up from 47 percent last year and up from 32 percent in 2008.

Wages are up to, as much as 6% or more from previous years, when holiday seasonal hiring was bleak.

Obviously, retailers are expecting a more robust holiday shopping season than in the last couple of years and are staffing up in anticipation of that. For people who have had difficulty finding work, even a temporary job can take some pressure off and create a more traditional and joyous atmosphere during the season.

Bottom line, if there are more people in the workforce, earning income, that means there will be a higher level of consumer sentiment, more people will shop and the benefits of that will extend beyond the holiday season and well into 2011.

Naked Short Selling

December 7, 2010

Imagine, if you would, if you had the ability to sell something to someone else
that you did not own. I am not talking about a person employed as a sales
professional, who rightfully earns a commission by selling the product or
service of their employer, but someone who represents owning something but in
fact doesn’t, then sells it to another person at a price below market value,
hoping that starts a chain of events which would lower the overall market value
of that product or entity, thereby giving the seller the chance to retroactively
profit from selling something he or she did not own.

Does that sound confusing and complicated? It should, because it is and it goes
on in millions of daily transactions in stock exchanges all over the world.

It’s called naked short selling and while it is supposed to be illegal in the
United States, many companies have pointed to the practice as the reasons they
have had difficulty raising capital or in some cases, have failed altogether.

Naked short selling is the practice of short-selling a financial instrument
without first borrowing the security or ensuring that the security can be
borrowed, as is conventionally done in a short sale. When the seller does not
obtain the shares within the required time frame, the result is known as a “fail
to deliver”.

Naked shorters will sell securities or stocks they do not own, in the hope the
price drops, after which they can buy the shares at the lower price and profit
from the difference. To further add to the conundrum, unscrupulous manipulators
will employ people to bash a stock on internet message boards, attempting to
create a wave of panic selling, further enabling the naked short seller to do
what they do…profit from an illegal transaction.

But how, you may ask, if it is illegal, does it continue to happen? It’s because
“Regulation SHO” which was enacted in 2005, requires only that broker-dealers
“have grounds to believe” that shares will be available for a given stock
transaction, and that delivery takes place within a limited period of time.

My question is, what constitues “grounds to believe”?

This week in Europe, the European Commission has submitted proposals to
safeguard financial markets from naked short sellers. If enacted, naked
short-sales of shares and government bonds would be limited and some
over-the-counter derivatives trades would be forced through clearinghouses.

It is a very controversial issue as some believe this is a destructive and
despicable practice, while others deny it happens at all.

In the US, the laws against it already exist, they just need to be better