Is the Financial Tsunami Over?

September 22, 2009

Nearly everyday for the past 6 to 8 months there have been reports that the recession is over, or that the recession is nearly over.  I guess I should jump up and go out and purchase a new Lamborghini!

Not My Car!

Lamborghini, Not My Car!

Just last week Federal Reserve Chairman Ben Bernanke announced that the recession is “very likely over”.  He then added, “it’s still going to feel like a very weak economy for some time.”  What does that mean?  Can anyone make any sense of this?  Yes I understand that technically speaking the recession ended for a month, but are things actually getting better?

Things are not getting better, in fact things are about to take a turn for the worse.  The only question is how long will it take for the government sponsored economic masquerade party to end.  Think about it, nearly every positive piece of economic news that we have had in the past 12 months has come from ill conceived government programs that have had the purpose to “jump start” the economy, but have only prolonged the pain.

Clunker...More like my car

Clunker...More like my car

Take for example the “cash for clunkers” program.  This program basically subsidized the UAW and the governments newly acquired possessions of GM and Chrysler to spark the manufacturing sector. This program gave money to people to buy cars, so people bought cars, a lot of cars.  Dealers ran out of inventory, UAW members were called back to work, and manufacturing showed improvement for 2 consecutive months, thus the program was declared a huge success.    Soon however UAW members will be getting laid off again, and manufacturing is once again stalling.  The price tag was $3 Billion, a hefty price tag  to prop up an industry for a few months.   Check out this article at National Taxpayer Union for a more in depth article.

You and I both could  list several other government “prop up programs” that have had short term success only leaving the tax payer flipping the bill.   We have been told that these programs have worked, but have they?   I’m sure you’ve heard the President take credit for bringing the economy back from “the brink”, but what exactly is he talking about, and how can we know that he is right?   They haven’t been right about anything else.

The sad truth is that there are no government programs that can end the economic crisis that we are still facing.  Ever since Wilson started the Federal Reserve, and FDR embraced John Maynard Keynes economic model, we have had a date with destiny.  Keynesian economics is not a perpetual form of economics, it has a life cycle and we are now nearing the end of this life cycle and the Fed and the government know it.

Every time they reach in their magic bag of tricks and pull out a new bail out, or new “cash for clunkers” program they are acting exactly like an magician_hat_200ER doctor getting the defibrillator and trying to shock life back into a dying body.  Perhaps this is “the brink” that the President is referring to.

Is the Financial Tsunami Over?  What do you think?


“Why is God Allowing this to Happen to Me?”

April 8, 2009

As people walk away from homes that are in foreclosure, or are dismissed from jobs that they have enjoyed for years, some may be asking the question, “Why is God allowing this to happen to me?”foreclosure

Some people are at a loss on how they will pay the bills, or put food on the table for their family.Make no mistake about it, when you have no means by which to meet your responsibilities it can add a tremendous amount of stress to your life.

9 years ago, to no fault of my own, I lost a good job that provided well for my family.I was informed about the layoff on Friday and on Sunday my wife informed me that we would be having our 3rd child in a few short months.

As a Christian I took this in stride, knowing that God would provide for us just as He always had.I would find another job and life would continue just as it always had.

3 months later, we were broke and I was still out of a job.I discovered later that when employers found out that I was on layoff and would be returning to my old job at a better salary that they had no interest in me…except for one company.

hog-processingThe local Hog Processing Plant would take nearly anyone who was willing to work.Reluctantly I took the job and began working on the “kill floor” on the maintenance crew.When I first started I wondered how I would ever get past the smell of death in the air, but soon found out that the smell was the least of my worries.

My first day on the job a “jaw pulling machine” got jammed with a hog jaw and it took 3 of us pulling on a pry bar for 10 minutes to unlock the machine.No sooner that we were done with that we had another call to a conveyor belt.

We literally had to run to the conveyor belt (sliding on “who-knows-what” on the floor), where we found that the belt was stuck because hog guts were jamming the line.Since it was my first day on the job I got the honor of crawling on my stomach under the belt where I pulled the innards out of the machine.Luckily it worked.

On breaks I changed bloody saw blades.When machines broke down I did whatever it took to get those machines up and running again.I learned to become a master plunger when blood and guts clogged the pipes.And I did it all for less then half of my former salary.cut-money-in-half

At home bill collectors were calling because we simply couldn’t pay our minimum payments.We struggled by, paid what we could and lived on next to nothing.Thankfully the Lord provided for us through the kindness of others.Around Christmas we received an anonymous envelope in the mail with money, a gift from a brother at our local church no doubt.Family members occasionally would provide groceries.This was very humbling and appreciated all at the same time.

 

Eventually God opened other doors and this time period in my life was over.When we were going through that time, it seemed as if it would never end.It was a painfully tough, pride swallowing time for me and my wife.However I thank God for that time in our life.

It was when we were struggling to make ends meet that we learned some very important lessons about life.We learned the value of a dollar.We learned about the pitfalls of debt.We learned that God does provide exactly what we need exactly when we need it, even if we don’t want it.

I also learned that God is sovereign.It didn’t matter what I wanted, it didn’t matter what I did.God’s will be done.It was His will for me to work at the Hog Processing Plant, and I had to  just bow to the will of the  King.

That brings me back to the question that we started with.“Why is God allowing this to happen to me?”Perhaps we are not asking the right question.

Perhaps the question should be something like this.“Why has God given me, a rotten sinner, anything?”The only thing that we sinners deserve is death, Hell, and destruction.

bible

I am convinced that if I had not lost my job 9 years ago and went to work at the Hog Plant that I would be making the same foolish mistakes today that I made then.I would be spiritually stagnant and my relationship with Christ and my family would be infantile.

Why is God allowing this to happen to you?Who are we to question God?Consider what God says to Job in this passage from Job 38 1-4.

“Then the Lord answered Job out of the whirlwind, and said, who is this that darkeneth counsel by words without knowledge?Gird up now thy loins like a man; for I will demand of thee, and answer thou me.Where was thou when I laid the foundations of the earth?declare, if thou hast understanding”


U.S. Already Bankrupt

March 23, 2009

The stock market has shown 2 consecutive weeks of gains.  Are we beginning to see the greatly anticipated bottom of the market, or is this just the Federal Reserve and the government artificially inflating our economy again?  Unfortunately most of the “pro’s” think that we are still in deep water.   I found the following headlines on CBNC.com stock-market-roller-coaster2

  • US is Already ‘Bankrupt’ Technically

The U.S. is already “bankrupt” because it has a debt that is almost four times the size of its economy, says Puru Saxena, CEO of Puru Saxena Wealth Management. He tells CNBC that the U.S. is at risk of hyperinflation.

  • federal_reserve_board_of_governors1Fed to Buy Treasurys is Not a Good Sign

Stephen Roach, chairman for Asia at Morgan Stanley does not view the Fed’s plan to buy $300 billion worth of long-dated government debt as a constructive sign for prospects going forward.

  • Fed’s Move Unlikely to Help Economy

The Fed pumping money into Treasurys won’t help, says Martin Weiss, president of Weiss Research. He also discusses what can be done to turn the US economy around.

  • The US Stuck in Zero-Rate Mode?

America is arrogant to deny their similarity to Japan’s economy, says Stephen Roach, chairman for Asia at Morgan Stanley. He tells CNBC that the US economy is in a “zero-interest rate” mode, like Japan.

  • Quantitative Easing & the Fed’s Balance Sheet

Thomas Lam, vice president and senior treasury economist at UOB, says the Fed’s latest moves such as to buy long-dated Treasurys will stretch its balance sheet and pump more liquidity into economy.

  • The Fed’s Recent Moves are Right

“This decision to purchase long-term assets, mortgages, long-term treasury securities, is the right thing to do. The Fed would clearly rather err on the side of inflation rather then depression,” said Dennis Gartman from the Gartman Letter. He also touches on the housing market in the US as well as the TALF.

  • Tackling US Economy

Housing problems need to be tackled before the U.S. economy can pick up, according to Adam Carr, senior economist at ICAP.

  • 2010: ‘Real Peak of the Crisis’

“We are going to see real problems in 2010 when the Fed and all the other governments which issued stimulus packages are going to try to reabsorb some of that liquidity,” Nicu Harajchi, CEO & Founder of N1 Asset Management, said Thursday. He considers whether the Fed’s latest move will work.

  • Fed’s Actions Bode Well for Asia china_worker1

The Fed’s bold moves to support the U.S. economy is good news for Asia, believes Yuwa Hedrick-Wong, economic advisor at MasterCard Worldwide.

  • Redirecting China’s Foreign Investments

China is unlikely to unload their dollar-denominated reserve as such a move will only hurt themselves at this point, says Yuwa Hedrick-Wong, economic advisor at MasterCard Worldwide. He tells CNBC how its foreign investment strategy may change.

  • China Needs Internal Demand

China needs to change its structure to an internal demand driven economy, says Stephen Roach, chairman for Asia at Morgan Stanley. He tells CNBC that China is hugely dependent on external demand as a major source of economic growth.

  • ECB in “Splendid Isolation”

The ECB should be out there pumping money into the system, says Paul Donovan, MD & head of global economics at UBS. He tells CNBC that the central bank is sitting in “splendid isolation”.

  • More Pain Ahead for Europe

There is no cause for optimism in the medium term, despite the better-than-expected data from the ZEW survey, says Par Magnusson, senior analyst at Danske Bank.

  • UK Due for Inflation Spike?

inflation1The UK economy is facing higher inflation down the road, Andy Hartwill from Quasar told CNBC, as Britain posted its highest ever budget deficit Thursday.

  • Deflation Will Hit Mid-Year

Deflation is a near-term risk that may hit global economies in the middle of the year, warns Paul Donovan, MD & head of global economics at UBS.

  • Preventing Runaway Inflation

When liquidity floodgates open, global central banks will have to sterilize very aggressively and in time to prevent runaway inflation.

Source:     http://www.cnbc.com/id/29769858


Does Bernie Madoff Deserve Hell?

March 17, 2009

He has become the embodiment of all that is evil.  His image has become the latest “2 minute hate” for all who are loosing money in the stock market.  He is Bernard Madoff.bernard-madoff

There is no doubt about it, Bernie Madoff is guilty, he admits it, and he deserves to go to prison.  He knew what he was doing was wrong and he did it anyway.  He lied to his clients, his family, his friends, and to those who loved him and to those whom he loved.  He’s a liar and a cheat.  He’s a sinner and deserves to go to hell.

With all of that said, please allow me to point out some lessons that we can all take from the Madoff scandal and some, antithetical view points.

The Big Fish Story

This scandal is the atypical story of how a little white lie can grow into a white whale.  I’m sure that when he was in college preparing for his career that he didn’t set out to lie, steal, and cheat his way to riches, and then to prison.  It probably started out as a “one time thing” to earn a little extra money, “just this one time.”  He got away with it once, no one got hurt, and thus he knew how to get away with it time and time again.  Before he knew what happened he had a raging river of deceit on his hands that he could not turn back.

Kevin Bacon and Kyra Sedgwick

Kevin Bacon and Kyra Sedgwick

Not only was he getting away with it, but he was being richly rewarded for it as well.  He became the investment guru for many stars and they loved him as they thought they were making them money “hand over fist.”  The pressure that he was under must have been great.  In retrospect it is a wonder that he didn’t die from a heart attack before he was caught.

This is what he said in court, “When I began the Ponzi scheme I believed it would end shortly and I would be able to extricate myself and my clients from the scheme, however, this proved difficult and ultimately impossible…As the years went by, I realized that my arrest and this day would inevitably come.  I am painfully aware that I have deeply hurt many, many people, including the members of my family, my closest friends, business associates and thousands of clients who gave me their money…I cannot adequately express how sorry I am for what I have done.”

You see that is how Satan works.  He gets you to accept little compromises along the way and before you know it you have compromised everything that you once stood for and believed in.

In Luke 12:3: Jesus says, “Therefore whatsoever ye have spoken in the darkness shall be heard in the light; and that which ye have spoken in the ear in closets shall be proclaimed upon the housetops.”

Is anyone else responsible?

As I have been following this story I have not heard anyone name any other responsible parties.  I would like to take the time now and name some other parties that are also responsible for Madoff’s clients loosing their money.

1.         Madoff’s Clients

Aren’t adult people responsible for their own money?  Shouldn’t  they bare some responsibility in knowing where their money was invested and to get some type of proof?  From what I have read, Bernie would at times hand write an amount on a piece of paper and the clients would accept what he wrote as the gospel.  Now that’s faith!  I have also read that some of the clients have said that they have lost everything, their entire life savings.  Have they never heard that you don’t put all of your eggs in one basket?  Lets be honest, they were greedy.  They thought that they had an inside to making big returns on their money because of their stature in their community.  Yes they were victims, but they allowed themselves to be victimized.

2. The Governmentsocial_security

Social Security is a very large Ponzi scheme, nothing more or less.  He probably justified his actions in his own mind by looking at the social security.

3. Wall Street

Investing in the stock market is risky.  You can loose all of your money.  Everyone knows this, yet most people continue to invest their money into the stock market.  When you knowingly put your money into a vehicle where you can loose it all, this is called gambling.  We can give it proper sounding names like mutual fund, but no mater how you slice it, it is gambling. Wall Street facilitates this type of gambling.  It is driven by fear and greed.  The same emotional states of mind that drive the casinos in Las Vegas

Bernard Madoff is a criminal and will probably spend the rest of his life in jail, and deservingly so.  He sinned against his family, his friends, and against God.  You know, when I think about it, so have I, and so have you.  We have all sinned against our family, friends and against God.  We all deserve to go to hell.

“For we have all sinned, and come sort of the glory of God.”  Romans 3:23

“For God so loved the world that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  John 3:16

Salvation and forgiveness is available to us all through Jesus Christ, even to public enemy number one, Bernard Madoff.


The Biggest Crisis in America

March 10, 2009

There is an economic crisis in America, but it is not our biggest crisis.

The Associated Press today released some numbers from americanreligionsurvey-aris.org

a national survey on religion in America.

Here are some of the numbers.

  • 15% of the respondents said they have no religion. An increase from 14.2% in 2001, and 8.2% in 1990.
  • Northern New England Surpassed the Pacific Northwest as the least religious Region.
  • 34% of Vermont reported that they have no religion
  • The numbers of Americans with no religion rose in every state
  • Mainline Protestants dropped from just over 17% to 12.9% of the population
  • 30% of married couples did not have a religious wedding ceremony
  • 27% said they did not want a religious funeral
  • 12% of Americans believe in a higher power but not the personal God at the core of monotheistic faiths.
  • 1.2% said they were part of new religious movements, including Scientology, Wicca, and Santeria
  • Evangelical or born-again Americans make up 34% of all American adults and 45% of all Christians and Catholics.
  • Muslim Americans grew to 0.6%

Our biggest crisis in America today is a spiritual crisis. Christians have no where to look but into the mirror when looking at these statistics. If we were at lest discipling our own children these numbers would be increasing for Christ.

Until we take seriously the commandments of God, the economic crisis doesn’t really matter.


Sinking Sand

March 9, 2009

As the Financial Tsunami makes landfall it is destroying everything within its path.  It is taking homes, mortgage companies, banks, investment companies, automobile manufactures, small businesses, large businesses, jobs, and anything or anyone else that has built their future on the sinking sands of debt.

wave-hitting-rock

“Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto a wise man, which built his house upon a rock:  And the rains descended, and the floods came, and the winds blew, and beat upon that house; and it fell not:  for it was founded upon a rock.  And every one that heareth these saying of mine, and doeth them not, shall be likened unto a foolish man, which built his house upon the sand:  And the rains descended, and the floods came, and the winds blew, and beat upon that house; and it fell: And great was the fall of it.” Mathew 7:24-27

In the area in which I live a large home builder just went out of business.  They cited the current economic environment was too tough for them to survive.  It’s true, the present economic environment is very difficult for home builders or anyone else involved with real estate to survive.  However, just a few short years ago they were making money hand over fist.  Their sales were booming and people were building a lot of homes.  What happened to all of the money that they earned when times were good?

I’ll tell you where it went.  It went to banks in interest payments.

This builder, like many other large builders, operated from a “stay in debt business model”.  It was working from the “microwave worldview” that it must be the biggest builder in the nation, right now!

They used debt to acquire land to be developed into building lots.  They used debt, in the form of a business credit line, to ‘ready’ the land for homes to be built.  They used debt to build spec. homes to be sold.

This type of operation is understandable (although risky) for a new start up business with a limited amount of cash.  However, for many builders and businesses there is no plan to get out of debt, and to operate the business debt free.  When profits are earned they are spent on bonuses, and dividend payments.  Interest paid to the bank is simply another category on the expense side of the ledger.  Sinking Sand.

The travesty of the whole thing is that’s what is taught in most business colleges today.  The students are not taught the pit falls of debt.  Debt is taught as a cost to do business.

It is more then just bad news for this builder and its employees.  There are many people who will suffer the consequences of the builder’s debt.  The towns in which land was acquired is now in questions.  Will this land sit empty with no use for several years?  What about the customers that were in the midst of building a new home; will their home be completed?  What about other companies (landscape companies, roofing companies, etc…) that became yoked with this builder; will they have to go out of business too?

I am not trying to pick on this one company, but I am using them as my example of how most businesses, large and small operate.

Debt kills, it destroys, and it enslaves.

With this in mind, think about these statistics.

  • About 43% of American families spend more than they earn each year.
  • Average households carry some $8,000 in credit card debt.
  • Personal bankruptcies have doubled in the past decade.
  • Consumers owe nearly $2 trillion. (not including mortgage debt)  That’s $18,654 per household

The current national debt is $10,964,973,383,260, and growing.  (Just in case you need to know that’s nearly $11 Trillion!)  It continues to grow at an average pace of $3.71 Billion per day.


At every level of our society (Government, Businesses, Households) debt continues to grow.  It there any wonder why

Thailand Tsunami Destruction

Thailand Tsunami Destruction

we are facing judgment?  We ignore the warning from God about debt and then we pray for blessings.

Make no mistake about it, the Financial Tsunami has made landfall, and only God knows how far it will go.  When it finally does recede we will then begin to see the destruction that it has brought forth upon our land and upon the world.  What an opportunity for the Truth of the Gospel of Jesus Christ.


The Global Financial Summit

November 15, 2008

This is a Ron Paul video on the G20 Summit that is presently taking place.  He does an excellent job of articulating the direction that our country is likely to go.