Thursday, July 31, 2008

US Financial System a Joke; Sadly World in No Position to Laugh

Hello out there! It has been a while. I am going to try and put together a post this evening for once. It has been hectic at work, at home, and generally very busy. It is not easy to put together a good post, and I refuse to bore you with crap or just a list of links.

As an aside, I love car engines. The engine in the new car, the VQ35HR, is as well engineered as I have ever seen. If cutting edge technology is your game take a look at some of the high tech on this baby:
Sweet stuff.

Also I have an early tennis match Saturday morning so I am going to practice tomorrow night. This means it will be Saturday night rock blogging instead of Friday! You are warned Watchtower!

Extreme Home Makeover Do Over?
When I read this story I had to actually get up and take a short walk to keep myself from doing something physically nasty to the computer:

This story is a few days old, and you can find the particulars on the web. I am sick and f#ing tired of tales like this. Which ever bank loaned this family of fools any money is a short to ZERO, did you get that SEC, a SHORT TO ZERO! I am so glad the new housing bill may allow us the taxpayer to forestall foreclosure for these guys, which brings me to....

72 Senators Deserve to Be Removed from Office
The blasphemous, anti taxpayer, disgusting housing bill passed the senate by a whopping vote of 72-13. I have few words for the collection of retards that voted for this thing. There is nothing I can say that their vote does not already.

Here is what I am doing, you may copy, or at least pass it around. In September I am going to get the best polls I can find for any of the 72 incumbent senators who are up for reelection. If they have an opponent that is withing 5% of them in a good poll (Rasmussem, Zogby) I will donate $50 to the opponent. Money talks and hopefully a few of these a$$holes will walk. Republican, democrat, independent, green, rainbow coalition I don't care. Any one that voted for this bill MUST SIMPLY BE REMOVED from office. I will donate money to the cause. Will you? If not, at least try to spread this idea around. It can work, witness Tom Daschle's removal from his seat a while back, his opponent mainly helped by out of state money.

US Financial System a Joke; Sadly World in No Position to Laugh
-The housing bill is as bad a deal as can be. Fannie and Freddie are essentially backed no matter what, and the taxpayer can expect this to come back on them sooner rather than later.

-The FDIC has little cash to take over failing banks, and yet we are just starting to see bank failures. Where is the FDIC insurance going to come from?

-The new FASB reporting rules are now delayed indefinitely, because they would render the financial world insolvent instantly. Better to pretend I guess.

-The alphabet soup of FED lending has been made basically permanent (nobody saw that coming right?) so the debt ceiling must be raised.

-The economy is for all PRACTICAL purposes in recession and going to get worse.

That is a bunch of bad. Big time bad.

What to make of it all? The FED is playing for more time in an effort to bounce banks higher so they can raise cash through stock sales. They have bumped, but nowhere near a place were cash is going to be easy. The markets have been trying to rally, but nothing solid can take place, while at the same time a real down run cannot occur either due to intervention and manipulation.

In a nutshell, the entire financial system of the US right now is a joke. From short selling prohibitions, to cooked books, to outright lying (see MER and their two step this month), to government officials saying silly things daily we know this has gone one step beyond.

The rub is the world at large cannot laugh. They have no leverage, they do, but the bad kind as they are holding all our debt which is not going to get paid back. HAHAHA. Kind of funny I guess.

As a play, I am looking for SKF and the like to move lower another 2% from here, and then I am in. Another round of pummeling is coming up for the financials this fall and you will want to be in on it. That is if shorting is going to be allowed.

Government Workers Must Go
The news is out that California Governor Schwarzenegger is using an executive order to slash jobs and pay in an effort to fix the budget. The New York governor raised warnings about the same kind of thing yesterday. The two biggest economic states are clearly hurting. Rightly so, the public teat swilling state worker should be the first to go/get a pay cut. I really do not expect much to come of this at first, it will be overruled by the legislature, but in the long run there is one clear fundamental problem for all levels of government:


It is that simple. See GM and Ford for a long term idea where overpaid, overprotected, and unproductive workers gets a company. Yup, that bad.

Have a good night.

Monday, July 28, 2008

Monday Check In

Hello to all, it has been a while! I had a very productive week away for my work training. This weekend I was swamped with getting caught up with the yard and garden work. And of course yesterday I purchased the 2008 Infiniti G35X sedan, the car I have wanted for 2 years! I picked it up tonight, and this thing is a serious piece of machinery indeed!

Lots of info out there, and plenty of stories to follow. Leave some topic ideas in the comments section that you mat be interested in as there is simply too much to cover!

I plan on some blogs this week, probably Wednesday-Friday. I hope all the readers are well.

Have a good night.

Friday, July 18, 2008

Meaningless Market Gyrations Show How Clueless Everyone Is

Sweltering heat all week up here in Massachusetts. I will never complain about heat, just the cold, but you could SEE the air today it was so heavy and humid! Garden update is as follows; Potatoes look good, strawberry plant is going wild, cucumbers starting to grow out well, but turnips and carrots do not look like a go. Also, I seem to have a rampant mushroom growth problem with the lawn. Any tips on how to stop them from the more experienced lawn folks? I will be away for training at an out of state site for my company all next week, so no posting next week.

Weeks Best Articles
Wild and crazy weeks tend to produce good articles. I am becoming a fan of the site Naked Capitalism by Yves Smith, and will be adding his site to the blogroll. Check his work out.

Any of the "5 Things you Need to Know" from this week were spectacular, but yesterday's was the best:

Mish shows his comedic side with a look at the 90% drop in Orange County construction:

A look back at a 2005 post by The Mess That Greenspan Made that basically spells out where we are now, 3 years in advance!:

Plenty of others, and please post some of your favorites in the comments that I can read this weekend.

Meaningless Market Gyrations Show How Clueless Everyone Is
The saga that was the week of July 14th through July 18th was a good show. Sadness and despair on Monday in the face of outright socialism, then smile about said socialism, then exuberant excitement about possible lack of socialism! That was alot of ground to cover.

The Fannie and Freddie news was the dominator, as it should be. With backstops, bailouts, loans, and credit line extensions all ready in the wings (not that it is needed!) it was clear the FED and Treasury were removing the "implied guarantee" from the whole GSE game. While government control of FNM/FRE would mean all those shareholders were broke, it at least promised to protect the mythical "system stability" we all crave like a cheeseburger.

This at first made the stocks drop. Then the idea that there was some price for FNM/FRE stock, buyers rushed in. Faced with a new rising stock price, which Mr. Bernanke actually said he WAS TRYING TO ENGINEER, Freddie Mac bum rushed the FED and Treasury by quickly moving to place a huge stock sale for this month. How big? How about 6 Billion dollars, for a 5.5 Billion dollar company! 100% dilution baby, yeah!

So what does it all mean? I can kind of understand the fools out there lining up to buy the Freddie offering. If you rode this pig all the way down, the only way to get any capital back is to keep the thing away from the government. Why not double down your bet? It is usually good advice to gamble bigger when you are down a ton, ask any gambler in treatment they will say the same thing. I wonder if the FED will buy the offering themselves? Who knows.

When you are watching swings of 20% in a stock any stock, on a daily basis repeatedly then things are just plain lost. Right now nobody knows what the GSE's are worth, or any of the banks for that matter. Merrill Lynch had a terrible report, but Citigroup had a "better than expected" report. Which is real? I have no idea. With all of the accounting games these firms play we never know just what is going on.

The gyrations make the markets look silly and foolish. Obviously things are getting out of control. We go from total meltdown to huge upside potential withing hours of each other. I always had a feeling the big money managers were about as smart as a rock, but now I have proof daily. Freddie is a zero, then it rallies a bit, then it goes for a 100% dilution to build capital it says they do not need, and the stock still is going up. OK. Good luck with that one.

My final takeaway this week was from the JP Morgan conference call. Mr. Jamie Dimon the CEO, who I have hammered at times, was brutally honest and forthcoming to a degree. His message: Deterioration is occurring across all credit spaces. Prime loans, credit cards, auto loans, commercial loans, they are all getting worse. That is not good. His dour comments went unheard. I give him full credit for at least trying to warn people.

I wanted to take a position in this market, but the FED's stupid pet tricks and the crazy % swings are making entry/exit points tough to manage. I cannot do daily moves, so this market is just too tough for me to play. If you are out in the mix, beware and good luck!

Friday Night Entertainment
I know it is hard to have so few posts to read, but I always try to deliver the goods on Friday!

Gas Guzzler!
So you are taking the train to work instead of driving, but your gasoline bill is not going down? What could it be?
more cat pictures

I was thinking about the great Dale Earnhardt lately, basically how much less I like racing since he has been gone. So sad. Take a look at Dale's last win from 2000 at the Talladega racetrack where he came from 18th place with 4 laps to go to win the race!

If you are amazed at he whole Guitar Hero craze as I am, check out the hardest guitar song possible on the game by Dragonforce. The song is called "Through the Fire and Flames" and the guitar work is simply baffling. The duelling solos at the end bear watching!:

I heard Metallica is coming out with a new album. One can hope it is good, but if not we always have the good old stuff! Listen to "For Whom the Bell Tolls":

The "Diary of a Madmen" album by Ozzy with Randy Rhoades is one of the true masterpieces of all time. I love all the songs. Try a listen to "S.A.T.O" which features wondeeful guitar riffs and a great tempo:

Have a good night.

Monday, July 14, 2008

No Support for Financials

You have to be amazed how fast and furious the financial news has been running! I told you it was going to be a long summer, and it is not even August yet. Get your popcorn ready. I have time for a few quick thoughts.

No Support for Financials
The big news about the "backstop/bailout/support" plan for Fannie Mae and Freddie Mac was good for about 5 minutes of pop at the open. Then vicious selling returned. Times are indeed tough if a Bernanke pump cannot deliver anything positive.

Today's most important takeaway point to me was the following realization that finally has dawned on the investing world:

The Government Can Only Do So Much for So Many

Obviously the FED wants FNM and FRE helped at all costs. This is likely to be so enormously expensive that this action will command whatever resources are left to be used by the FED and Treasury. What this means of course is that Bear Stearns was an isolated event, not a new norm. Think about Washington Mutual (down 30% plus today alone). That bank got the good old "good luck" from the FED today. While traders have tried to guess what a bailed out bank may be valued at, they seem to be getting the idea that zero will be about right.

I have argued that almost all financial stocks are worth essentially zero, but that a possible FED bailout sets some kind of floor price for many banks. With FNM and FRE getting the big bucks, that price certainly is lower now, if not totally impossible. LEH, WM, WB are basically zeros. Most of the other banks are not much better off.

Tons of great stuff out there today. Hit the blogroll hard, there is a ton of analysis out there. Check out The Big Picture for a hilarious Onion article that could be a true piece of writing.

Have a good night.

Friday, July 11, 2008

Friday Addendum

And one more thing....

Friday Addendum
Most of the time I am behind the curve with information, mostly due to the fact I am at work all day. Tonight Mish has a great post up about who exactly holds the debt of Fannie and Freddie. take a look at this post:

I mention it because it has long been a central tenet here at Economic Disconnect that the Chinese watched and learned from the former Soviet Union's failure, and have applied those lessons. If FNM needs a big bailout, I argued that Taiwan would be the price for America to pay. Full post here from October 16th 2007:

Here is the relevant excerpt:
Revenge of the Communists
It is generally accepted that the USA won the Cold War with the Soviet Union, not through live combat, but through an ever escalating arms (Not those ARMS!) race that eventually bankrupted the old Soviet system. I do not want to debate the particulars of that story. I want to focus instead on what could be happening in a macro geopolitical sense.
Suppose you were a communist country, and saw what happened to the old Soviet Union. Perhaps you would learn that isolation from foreign trade really hurt them, and a weak economy meant ultimately they were doomed. Say you instead become a massive creditor to the United States. Your country, with terrible environmental rules, no worker rights, a police state that cracks down on dissent, and dirt cheap labor can manufacture every widget needed by the USA. Your economy is booming, and what's even better, you hold a silly (upwards of 2 Trillion?) dollars of US debt. Even sweeter, the US is totally dependant on your country continuing to buy their debt. So far so good.
Now the dollar is tanking badly. The US consumer has spent himself silly buying homes that moved in price like the old dot com stocks. The party is now ending, and massive financial losses are sure to come. The US is in a bad spot with huge budget deficits, massive entitlement programs, and facing a probable bank bailout on a historic scale.
By now you know the country is China. Faced with this tantalizing junction in history, what would be your next course of action?
Option1: Nuclear Option
China stops buying US debt causing a run on the dollar, and a major meltdown in US markets. A new smarter communism has crushed the US economy and exacts revenge for the loss in the 1980's.
Option2: Trading Time
Faced with the above mentioned nuclear option, the US signs a treaty of non aggression with China, and Taiwan is left to its own devices under a Chinese invasion. The US will sell out Taiwan in the face of such a catastrophe.
I do not want to have a debate on the merits of Taiwanese Independence, that's not the point of this thought process. I want to point out that because of the major Economic Disconnect that has gone on too long, neither of the two ideas floated here are beyond consideration. By all means, let me know what you think. Again, I hope I am very, very wrong.

It is getting scary. Be mindful.

Fannie Mae and Freddie Mac Show Thin Ice US Banking System is On

In the process of buying french doors and a outside deck for the den overhaul. Things are not cheap! Home a bit late tonight, but how can I not post on the wild day today? I told you it was going to be a LONG summer, and of course, I was spot on!

"The FDIC Is In Control"- Get Used to that Line
Indymac bank is has officially screwed the pooch as of about 6pm. Shocker for all but the kind of well read folks that read this blog and others like it. IMB was a huge player in the Alt-A loan market, and contrary to what Mr. Bernanke and Mr. Paulson would like to be thr truth, Alt-A is subprime only much, much bigger.

IMB is the second largest bank failure EVER in the USA. This is meaningful. This is the bigtime. If the mainstream media wants to get some credibility back, there should be serious coverage on this event all weekend. When banks close it is not funny. Treat it as such.

Get very used to the "FDIC has taken control of...(fill in the blank)". Many more banks (large and small) will not survive this summer.

Fannie Mae and Freddie Mac Show Thin Ice US Banking System is On
There is so much crazy talk going on regarding the Fannie and Freddie situation that almost anything I write tonight may be shown to be wrong tomorrow. I will not let that stop me from spreading more bad information though!

Summary: FNM and FRE were targeted in a tough piece in the NY Times that called into question the solvency of those institutions. This came on the back of former FED official Poole's comments to the same effect. Now certainly FNM and FRE are insolvent. We know this. The problem now is that other people are stopping the pretend game where they are "well capitalized". The US government through some kind of structured thingy, will have to take over the GSE's in short order. This effectively makes the common stock of both companies worthless.

What is most interesting to me was the wild, all over the place comments and reactions across many fronts during the day. Between the stock market, the FED, the GSE's, the talking heads, and the treasury you could not make heads or tails of what was going on today. I saw the headline that the FED would allow FNM/FRE borrow form the discount window. I then saw a FED comment not 5 minutes ago that read "We never agreed to that!" Which is it? (Note: it does not matter; the FED is about out of cash anyway!) The point is that there is no control of a dangerous situation.

My take on the whole thing, at this point, is this:
FNM and FRE will have a restructuring where they are taken in by the US government. I really cannot see anyway they survive on their own. This terrible reality will smack the US taxpayer and middle class twice, through higher taxes to support these stupid firms and through a devalued dollar which will further erode buying power. I do not care that the dollar did not fully reflect this today, the operative word is TODAY. There is simply no way this will not impact the dollar harshly. Does anyone else see it any other way?

Another take is that FNM and FRE stock is widely held. I mean widely held. These two clowns have lost about 90% of their stock value over the past year. That is huge. Your 401k certainly has some of this stock. Big institutions hold tons of it. Losses should start showing up next quarter in investor reports. Remember that.

My final quick take (I will try for more this weekend) is that if FNM and FRE are in as good of shape as they say, if over 98% of their loans are performing wonderful, if there is no problem at all, then they should both be barred from any help in the future. The lies must stop. present the CEO's with a form that say "I ascertain that my company will not need ant government help, and thus we are barred from any taxpayer funds" and make it a binding agreement. Then we might hear a different tune.

I will wait for things to settle out and try a more detailed post. Try Minyanville, Mish, and Calculated Risk for much more.

Musical Interlude
A little music as we watch the collapse of our Financial System!

Especially for IndyMac, one of my favorite bands Alice in Chains with "Down in a Hole":

For Ben Bernanke and Hank Paulson, get used to drinking this weekend with George Thorogood's "One Bourbon, One Scotch, and One Beer":

To Fannie Mae and Freddie Mac, from the US government, listen to Jewel's "You Were Meant for Me":

Have a good night.

Monday, July 7, 2008

Monday Check In

Had a reasonable 4th of July holiday. Strange weather made it tough to do anything in the afternoons due to raging thunderstorms. Monday back at work after 5 days off is always hard.

IndyMac Effectively Finished
The Mortgage Implode-O-Meter had an update saying the end was near for Indymac bank as of today. While IMB is not technically closed, they are basically finished as an entity. I see IMB as the first of many banks that tried to hold their breadth and pray for a turnaround in housing. They ran out of time.

The IMB banking blog report has all the particulars here:

I can sum up as follows:
-Layoffs of 50% of workforce (7,200 employees cut to 3,400)
-Additional capital raising probably not an option (lower than $1 share price does that!)
-Mortgage loan portfolio has ZERO bids; Cannot even sell assets for capital
-No new loans going forward

So IMB cannot raise cash, cannot write new business, and has a portfolio that is worthless? I am going to venture a guess they are all done, agree?

This is another marker in the poor loan marathon. It will not be the last. Many other players are still in denial about their own loan portfolios. The FED has been able to put the banks on life support since last summer, but the IMB failure is going to start another revaluation of the banks. Long summer ahead.

Blogging Update
Summer time is activity time. It has become very hard to try and fit in any after work activities and still put on good material on this blog. I hate just doing a linkfest! I think that going forward over the summer, posting may be erratic and spotty. I am going to be doing things outside more, and a remodel of the den is at hand which will limit my computer access anyway.

So what does this mean? Well, I will likely only be able to do 2-3 blogs a week. Sorry to the hard core loyal readers. I will try to do better, more in depth posts when I do to try and make up for the lower volume.

Please check in from time to time, I do appreciate all the readers that come by and contribute. When the fall rolls around I will probably be back to regular posting.

Have a good night.

Wednesday, July 2, 2008

Second Half Rebound Now Cancelled; Remember Who Got it Wrong

It was supposed to be more quiet here weather wise today, and very quiet tomorrow. As I type this there is thunder and lightning raging. The weather for tomorrow has now been changed to "unsettled" with flash storms. Not a good day to go fishing in a boat! Weather forecasters lately have been as accurate as all those "second half rebound" fools!

What Can Be Done When We Apply Ourselves
Non financial news can be very exciting as well! I have been following all of the Mars Phoenix Lander news as it has developed. The data is both exciting and amazing. Ice, real WATER based ice has been observed sublimating! This is incredible. Also, the geological makeup of Mars closely matches that of Earth, and not like the Moon at all. Very exciting. I recommend at least a weekly check in at this site: to get updates on the progress.

Also, Voyager 2 a deep space probe has now crossed into the outer limits of our Sun's influence, the heliosheath. When compared with the same area that it's twin Voyager 1 has documented, it is clear that the local bubble is not spherical, but misshapen due to interstellar space magnetic fields. Again, just jaw dropping stuff. Use Wiki for Voyager program info, but here is a an idea where the Voyager and Pioneer probes are as of now:
Second Half Rebound Now Cancelled; Remember Who Got it Wrong
Now I want to be fair here. I understand that economic issues are complex and hard to see clearly in real time. There is getting something wrong because of outside events. There is missing a call because of bad data. It happens. Nobody can be expected to be perfecto. I have no gripe with missing things, you all know my calls are usually not the greatest in the near term.

Then there is what we have regarding the whole "second half rebound" crew from CNBC, the banking CEO's, many analysts, the FED heads, and other economists. These guys looked at pretty good data. They saw the structural issues facing housing. They are aware of the precarious footing most banks are on. They have all the same information a hack like me has. They were way off. They were as wrong as could be. How does this happen?

Glad you asked. The answer of course lies in what your prospective is and what you want to accomplish. I offer that the sunshine calls were not based so much on a clear thinking take on the situation, but on a hope based effort to influence psychology. The players did not want to scare anyone. They did not want the major problems to have a spotlight on them. By trying to make people feel that things were "on the mend" they hoped to keep the ship level until a fix could be found. Maybe I do not have too much disdain for this effort.

The problem lies in that it is now clear they were all full of it. So instead of anything productive, they have sacrificed their objectivity and credibility in the face of a full blown recession. It will be harder for people to "remain calm" if things get much worse when the people that should know things were cheering a happy tune so recently. In a debt based, credit expansion economy confidence is king. Now even regular types are asking what happened. Not a good spot.

It is at a time like this that you should write down or make mental notes of some of the worst offenders. Their inability to make the right call here cancels their value as a voice. Focus on the ones that had it right way ahead of time and you will be best prepared going forward. The blogroll is full of sound minds and advice so use it, I do.

Have a good night.

Tuesday, July 1, 2008

Tough Times Force Tough Decisions

Well I am on a mini vacation for the 4th of July Holiday. No work until next Monday for me. Hopefully the crazy afternoon thunderstorms will stop occurring here in Massachusetts. Makes it tough to cook on the grill if you are worried about dodging lightning!

Bank of America Closes the Countrywide Deal Too Quietly?
Now one has to wonder how active the FED may indeed be behind closed doors when looking at the Bank of America buyout of Countrywide Financial. Since the shotgun wedding was announced, there has been nothing but highly damaging news regarding CFC in regards to:
-Nefarious Lending Practices
-Rapidly Deteriorating Loan Performance
-Obscenely High Volume of REO's
-Sweetheart Deals with Plenty of Members of Congress
-Lawsuits by Several States
Even last night the NBC nightly news had another (this makes like 4 stories this month) former CFC official type go on record with how corrupt and wild the lending criteria was. Given all of this, BAC never even blinked, and more than that often came out with reassurance the deal would go through. This leaves us with only a few possibilities.

One: BAC thinks that the massive size of their new mortgage unit will be able to pay for whatever issues CFC may bring to the table. 5 years out, perhaps BAC will be mortgage king. Maybe, maybe not. I would hope that BAC is using a model of transaction volume that more closely mirrors the 1991-1995 time frame for housing than the 2001-2005 model. They are not so foolish as to think a return to the go go days of the boom are coming back? Maybe, maybe not.

Two: The FED had identified this deal as a lynch pin, along with the BSC bailout, to keeping the system functioning. Thus they strong armed and agreed to cover any issues that BAC may face with the deal. With this backstop, BAC went full bore into the deal.

I am just speculating, but I seriously think the FED had a big hand in this thing. I also believe BAC thinks (I repeat THINKS) they are going to be better off down the road for this purchase. I think they will be wrong. Again.

Auto Sales Running on Bald Tires
Howard: Dong. Where is my automobile?
Long Duk Dong: [Laughs] Oto-mo-biiile? -from the film "Sixteen Candles"

I do not have much to add to today's auto sales numbers. Piss poor and scary about sums it up. Quick review:
-Ford down 28%
-GM down 18%
-Toyota down 21%
-Chrysler the big winner with a down 36%
Without ready access to credit and ever expanding debt, new cars are a tough sell. What do we call the collapse of credit and shrinking of lending? DEFLATION. What compounds it is that consumers may actually be at a point where they are reluctant to take on a new big car loan. Imagine the pickle we are in if that sentiment takes hold! Whoa Nellie!

My favorite cars of all time are all either Plymouth or GM products. The awesome DZ-302 engine for the 1967 Chevy Camaro which became the legendary Z-28 option. The 1963 split window Chevy Corvette may still be the sexiest car ever made. The mighty 1969 Plymouth GTX, a scary car on many levels. It is sad to see these companies face oblivion, but really the US auto makers never really made it out of the early 1980's. How long they remain will depend on fresh ideas and a probable US government stake. Sad.

Tough Times Force Tough Decisions
There is a chance, however small, that the average US citizen is waking up and seeing the mess that is the basic structure of our country. The serious economic issues are easy to see now, but they are part of a sickness that has pervaded too long. The US has for to long been too complacent. We are used to patting ourselves on the back and telling anyone that will listen how great we are. In reality we have become slow, dumb, and out of shape in a new global competition.

You can see it in our elected officials. Has there ever been a more ineffectual leadership? Both houses of Congress and the presidential Administration have proven to be useless as a guide. Both parties are to blame so don't start with blame games. In the end of course the voters that reelect bad officials are really to blame, but hey, marking a ballot is hard work so I understand how these things happen.

If a protracted credit bust occurs, as I think it will, times are going to get tough for what is left of the middle class. Already exhausted by college costs, health care costs, stagnant wages, high taxes, poor services, and other stresses this group is about fed up. Fed up with farm subsidies, section 8 housing, welfare, rewarding 13 year old moms with cash support for life, endless lawsuits for hot coffee spills and the like. They may actually want to go out and do something about it.

A rough patch is what is needed for America to set itself aright. We are still blessed with a beautiful country. We still have plenty of the most talented people across many fields. We are still the only nation that expects good things to happen to them, and use that optimism to grow. I am a believer in America, but we need to get hungry. We need to get lean. We have to get our edge back.

Can it happen? Of course it can. Maybe this flushing (a real flushing not this baby "bottom" we are seeing right now) can get us to that point. I am hopeful. Things cannot keep going as is. It will soon be time to choose America, which way you wanna go?

Have a good night.