OBAMA COPIES JULIUS CAESAR'S TACTIC WITH ENEMIES

Astoria, New York
Obama may have studied more history and economics than past presidents, or may be he is surrounded by less belligerant people than his predeccesor. In the last few days, the president has visited Latin American countries in the hope of creating new relationships with some of our past enemies like Chavez and Castro. The tactic of reaching out to enemies was General Caesar's concept of strength and not weakness. As civil war raged, Caesar was able to get his enemies on his side after winning decisive battles. Caesar believed in diplomacy and would leave confrontation in the battlefield as the last resort. Of course, Caesar wouldn't take matters lightly and was ready for battle if necessary. The South American leaders of Venezuela and Cuba welcomed Obama's reaching out as they are willing to discuss various issues with the new american president. Security, drug smugglers and human rights are some the items on the agenda. The realeconomist.blogspot.com wishes Obama the best in dealing with these affairs.

WHITE HOUSE RAT PUSHES OUT GM'S WAGON

*RATNER SAYS GM'S RESTRUCTURING NEEDS NEW LEADERSHIP
*WAGONER TO GET GENEROUS PENSION PACKAGE
*OBAMA SAYS HOPEFUL OF FIAT-CHRYSLER DEAL,SAYS F.I.A.T. A FINE INTERNATIONAL COMPANY UNDER GOOD LEADERSHIP
Astoria, New York
The markets tumbled on Monday because of the continued plague of the auto industry. At the White House, President Obama said that GM's ceo was asked to resign because of need of change of direction in the auto maker pursuit to return back to financial soundness. Wagoner won't leave GM empty handed. He will receive generous pension plan worth over 20 million dollars. Obama, on behalf of the taxpayers, said that the government is not considering to run the auto industry. He said that a financial disaster has struck the industry and as if it was a natural disaster, the government has to intervene in the same manner. He is giving the auto makers GM and Chrysler another 30 days to come with a better restructuring plan. Regarding Chrysler, Obama is hopeful of FIAT-Chrysler deal. He believes FIAT to be a fine turnaround international auto maker under good leadership. FIAT, the jewel of the past Agnelli family of Italy, has undergone a major restructuring plan and now under new professional leadership, is in a position to gain from the overall global situation, said the real economist. Just a few years ago, a cancelled put option by GM netted 2 billion to FIAT.

OBAMA GETS VOTES TO PASS STIMULUS PLAN; WILL SIGN BILL IN NEXT 48 HOURS

THE 787 BILLION STIMULUS PLAN IS MAJOR MILESTONE FOR OBAMA
RESULTS OF OUR RECENT POLL INDICATES STIMULUS WOULD HELP A LITTLE THIS ECONOMY
Astoria, New York
President Obama says that this is not the end of the deep recession but the beginning of the end of it. After debates, some alteration and major opposition from Repubblicans, the new Stimulus Plan has squeaked by the Senate earlier last week, and was passed finally by Congess on Friday. Obama wants to put Americans back to work with a massive infrastructure plan. He also wants to boost new green technologies to alleviate and eventually eliminate dependence on foreign oil. A stimulus break for $400.00 per person and $800.00 per couple is expected to affect 95 percent of Americans. As most top economists say, the Obama Stimulus would only help a little this economy and much more may be needed to bring it back to normal. Therealeconomist ( THE REAL ECONOMIST ) believes that in order to protect property values, governments may need to print more money leading to longer term inflation and the amount of stimuli needed in the U.S. for the next four years, would amount to between 2 to 5 trillions.
(( Top economist LARRY KUDLOW at CNBC believed that the damage was only between 10 to 20 billions (MAY 2008 at the TAGLICH CONFERENCE ))

MINI DEPRESSION VERSUS (GREAT) DEPRESSION

Astoria, New York
Last winter, I had tossed the idea of a possibility of a mini depression looming ahead. During the summer, I was convinced that we were heading towards one. What is the difference between mini and GREAT? A lot. In a Great Depression, people will be struggling to put food on the table. Most banks will be going bankrupt, and urban areas could become vacant lots because there are no jobs available. That doesn't sound nice. It did happen in the Great Depression of the late 20's and early 30's. The inaction of the government as well food shortages and calamaties could create another one. In a mini depression, instead, the government is more efficient in allocating its resources quickly and swiftly to deal with any rising problem. Food is available as well as housing. Credit becomes scarce and unemployment rises due to cost efficiency programs implemented by companies. Today, we have resources that can help us thwart another Great Depression. These resources were not available back then. We have computers that could give us information instantly. We have better technology and communication across agencies. We have security. We have food and transportation availability. We have medical resources availability. We have cooperation among foreign governments. And we have the spirit of moving forward. So, you may ask: " Can we head towards another Great Depression ?" And I would reply: " YES, WE CAN".
But we won't , if we can stick together and we tell the powerful fat cats to do the right thing. Government bailout money to bonuses for the fat cats??? That is a no no. I don't want to think about the idea of those fat cats living 2000 years ago in Rome if they were able to get away with it, if caught.
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ALERT<> SENATE TEST VOTE IN FAVOR OF STIMILUS
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THE NEXT BLOG > MICRO CAPS HUNTING (Part 2 )

THE SENATE READIES TO VOTE ON OBAMA'S ECONOMIC STIMULUS

Markets were higher in the United States and overseas on hope that the stimulus plan would stabilize the economy, but the debate continues on what to do about the bad assets, as well as how to allocate government spending.
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Stay tuned to http://www.therealeconomist.blogspot.com/ for more developments.
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PLEASE VOTE IN THE NEW POLL REGARDING THE STIMULUS. (in the right column) ----------------------------------------------------------------------------->
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THE NEXT BLOG> MINI DEPRESSION VERSUS (GREAT) DEPRESSION
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IN MEMORY OF MARCUS TULLIUS CICERO

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BECAUSE OF AMERICAN FAT CATS GREED AND AMERICAN POLITICIAN INJUSTICES, ALL OF OUR STATES ARE NOW SUFFERING, ALL OUR FREE COMMUNITIES ON MAIN STREET ARE COMPLAINING, AND EVEN FOREIGN GOVERNMENTS AND PEOPLE ARE PROTESTING. AS FAR AS THE BOUNDS OF
THIS UNIVERSE, THERE IS NO SPOT NOW SO DISTANT OR SO OBSCURE THAT THE WANTON AND UNSCRUPOLOUS DEEDS OF THE AMERICAN FAT CATS HAVE NOT PENETRATED THITHER.
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Dear Larry,
I appreciate listening to some of your speeches. I have learnt more about what and who you are but I believe that this is a conference directed for the small stock investors. It should have a speaker who can understand and discuss the issues that the listener needs to know before he considers investing in these micro companies. Politics is an essential part of macro economics and micro economics. But politics cannot and should not persuade an economist to alter his opinion for the benefit of his fellow politicians. A media economist must remain independent at all times so he can favor what he truly believes in, and that is a fair economy and true economic growth.
Real estate as you may have learnt lately is an essential part of this economy and other economies worldwide. It is a multi trillion dollar business which affects banks, insurance companies, and any other industry that you can think of. A question came to your plate 3 years ago at this conference. It asked you if Americans had borrowed too much and if the true worth of real estate prices had been compromised. You argued that Americans had borrowed the same percentage to equity as usual and that prices were backed by the strength of the money supply of this economy. You were wrong. Freddie and Fannie were giving out or buying out loans with zero equity. When real estate gets manipulated by the politicians and by the greedy fat cats, it could overshoot causing a manic period in prices, just like small stock prices tend to soar on particular times on Wall Street. But there is a difference. Real estate affects everyone anywhere while stock prices in small stocks only affect a few. And the sad thing is that they have more regulation on small companies instead of having it on the real estate industry. You argued in the past against European policies and against its currency. You were wrong. The euro soared to 1.60. But the Europeans followed the greedy fat cats and they also fell in that fat cat trap of this global economy. Somehow, the greed of the fat cats is contagious and persuasive enough to convince people, from economies with more regulations, to indulge into an easy way out of their debt. But now change has opened its doors in America. The president elect has promised to change the way Wall Street operates. His hands are full as he inherits this financial mess. Bailouts and cry-outs are distrusting and disgusting for capitalism but not for the welfare and protection of the economy. The greedy American fat cats and those with unlimited executive compensation who don't know how or are too greedy to protect their companies on a rainy day, now will lose weight and they will feel the pain of change. Capitalism will survive in one shape or the other but it will be played on a different playground.
Taxation and regulation as well as caps on executive compensation for those public companies that are owned by private shareholders will be needed to be implemented in a fair and consistent way. This will be essential in Monitoring against excessive economic spurs that could affect anyone anywhere anytime.
For me, it was Marcus T Cicero who inspired me in writing this letter to you. Even though,
we are more than two thousand years apart, we live in a period of time that could be similar economically and politically to that of the roman senator. History usually repeats itself.
This is serious stuff. This is not what you thought just a few months ago at another stock conference. The amount of money in question here is really huge.
Sincerely, a fellow
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( written in early November 2008, ahead of the Westergaard Paulson Small Cap Conference at the Waldfoorf Astoria, NY )
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OBAMA IN FIRST RADIO ADDRESS

• In his first radio address to the nation, President Obama has outlined his proposed stimulas plan. He wants to promote education, green renewable energy, health care and security. So far, the economy has continued to deteriorate with unemployment insurance claims rising to new highs and housing starts falling again. With the Dow Jones declining almost 8 percent in 2009 and banks under serious pressure, another stimulus plan looks likely to be passed in the next few weeks. Obama also said that he wants accountability for the spending and has initiated a new website for taxpayers who wanted to know how the money is spent at http://www.recovery.gov/.
  PROPOSED STIMULAS PLAN
  SECURITY
• <>BOOST SECURITY AT 90 PORTS
  <>BETTER COMMUNICATION BETWEEN LAW ENFORCEMENT AND PUBLIC OFFICIALS IN CASE OF AN EMERGENCY
  EDUCATION
• <> MODERNIZE 10,000 SCHOOLS
  <> PROVIDE HIGHER EDUCATION TAX CREDITS TO 4
  MILLION STUDENTS
  HEALTH CARE
• <>NEW TAX CREDIT FOR PEOPLE LOOSING THEIR JOBS
  <>INCREASE MEDICAID BENEFITS
  <> EXPANSION OF CHILD TAX CREDIT
  ENERGY
• <> 3000 MILES OF NEW TRANSMISSION LINES TO CONVEY
  ENERGY FROM COAST TO COAST
• <>BUILD UP CLEAN ENERGY INDUSTRIES

I HAVE A DREAM TOO

Today, MLK's birthday is a day of reflection. While Martin Luther King was fighting for civil rights, he was dreaming of a day when equality for all would be in existence. Today, the eve of Inaugural Tuesday, we can feel that the day for equality is getting closer, as tomorrow, the first ever African-American president will swear the Oath of Office. I would have liked to be there to witness that feeling of joy by many. But perhaps my dream is a bit different. I have a dream that is not as simple as King's. My dream is more complicated and harder to understand. I will mention my dream in some future post, but now I would like to take this moment to wish good luck to Obama , as the 44th president of the United States.

PAX OBAMA vs PAX ROMANA

The economy in Roman times had its ups and downs, from times of civil war to times of peace, from times of political corruption to times of political stability. Take for example Augustus (Octavius) or Vespasian. These were two candidates who would never have been emperors but they got their lucky breaks. Octavius' lucky breaks were the death of Caesar who was his uncle and adoptive father by will, and the grain shortage that led to the civil war with Mark Anthony. Vespasian's lucky breaks were his skills as a siege general that made him famous among the legions, and the civil war that erupted after Nero's death. (We know of Obama's lucky breaks) Both emperors believed in rebuilding the infrastructure after it was damaged by civil wars. Both believed in creating an atmosphere of peace called the PAX ROMANA. Complete peace in the roman world never existed but the people in the italic peninsula felt a peaceful period after the torment of civil wars. Both emperors were not concerned too much with enriching themselves. They were humble people who instead were concerned in creating a better economy by building a better infrastructure. Augustus known for building new roads and the water acqueducts, Vespasian was known for his stadium called Colloseum, a gift he made to the people. And now Obama finds himself in a similar position. The United States has suffered from financial mishaps and financial scandals of dynamic proportions. Can we find a better way to appease the people? The infrastructure program will need lots of capital. Minimal distraction from wars is necessary to better implement the program. In order for Obama to be successful, he needs to be humble and he needs also to create a feeling of peace, perhaps a PAX OBAMA. This will make it easier for him to face today's financial challenges. Even though the US will probably be distracted by Iraq, Afghanistan, the Middle East and other war events, minimizing the effects of these events will be crucial for this administration.