Economic Cancer

US Diagnosis: Terminal Bankruptcy

Our doctors, politicians, economist, FED leaders and yes even you and me knew the day of reckoning would come. Well the dawn is breaking. Auto, Bank, Credit Cards and more to come – Retail, Airline, Consumer Electronics etc…. Some of the only beneficiaries are bankruptcy lawyers. And the FED is gearing for another rate cut so inter-banking money will be almost interest free! We conveniently call it a deep RECESSION when in fact this country is dying.

Here are some close facts so listeners can become more aware of how bad it really is:

The US deficit will reach $11 Trillion next year – We refinance the debt and interest + spending Isn’t that what the banks did?
50% (appx) of the deficit is owned by Social Security – Medicare and Medicaid Where did our money go?
Social Security, Medicare and Medicaid are projected at a $99 Trillion deficit Can anyone even fathom that regardless of the above and below?
The FED is printing money 24-7 flooding the world markets with US Dollars Is this Pre War Germany to come – currency devaluing will be a final nail
Healthcare and social programs – stack on another $50 trillion over the next few decades. Healthcare and social programs can’t be paid for – more pandering!

The US is a Consumption Economy – No Longer manufacturing or industrial. Consumers cant or want consume – what does that do to the economy in the next few yrs?
95% of Americans use credit, loans and other debt Credit addition is killing and will kill tens of millions of consumers
All majors sectors of our economy are at historic lows Industrial Revolution era, Depression Era and Pre WW II levels (I hope we hear that)
Unemployment and underemployment have approached historic markers And it will go far beyond 12 years – many more decades to fall in ranks
Corporations crumbling under global competition Unions, High Wages and 2nd largest corporate tax rate

Oh there is so much more! OK now given the above – I would love to hear from anyone that can tell me how the US isn’t insolvent or bankrupt already!

Here is the US Medical picture if easier to visualize:

ILLNESS: Cancer National Deficit Consumption Economy

Cause: Long Term Credit Addition US Lawmakers US Consumers

Symptoms: Run Away Spending Massive Bailouts Consumer Unemployment – Under Employment & Bankruptcy

Doctors: Lawmakers The FED Big Businesses

Treatment: Print Money 24-7 Allocate $2 trillion thus far we don’t have Pray the world holds its confidence in our economy, treasuries and currency


Unfortunately, government and business leaders who most listeners and Americans have never met or spoken to – and never will – are in surgery and recommending radiation treatment to kill off many of us with squeezing the consumer and their ability to work, buy good and keep paying their loans. Doesn’t that seem likely to cause the greater economy to fail and fail again. Yes radiation, FED rate cuts, useless stimulus checks to come, bailout etc… are things in the past that didn’t work. Right – if you continue to do the same – you will get the same result. We need massive transformation and radical solutions or we are DEAD.

So to quote another author “What got you hear..Won’t get you there”. And my favorite “No matter where you go – There you are”. And we are smack in the middle of either saving our way of life or completely ruining our country. So here are the solutions – I have been talking about for a year.

1. Pay off deficit in 1 year.
a. US Institutional Investors – required to invest 100% of the money have over $100 Trillion under management and over 50% in fixed income. Pass Law to require 10% of those monies invest in buying back all US debt = America owes America and Economic Revolution
2. Economy Bonds
a. Only Americans can buy them and the Government gives every tax payer bonds for 5% of their taxes (govt still uses money) and we build a savings nation again.
3. Expunge 30-60-90 – 120 days lates over last year and halt negative reporting until economy settles
a. Why? Our economy depends on consumers. If over $30 million have poor to average credit – they won’t get loans, credit cards etc.. SO THEY CANT BUY ANYTHING – YES EVEN A NEW CAR!
4. Refinance America:
a. We are credit addicted and need rehab. Everyone cannot do this themselves – so the govt should create a huge boom in banking revenue (pay off our loans to banks) by allowing the debts Americans have anyway to be refinanced and consolidated in one payment. This would liberate tens of millions and get their debt under management and require counseling. Toxic loans are toxic because people can’t pay. Through stringent counseling then they can work themselves out of the hole or face many many more bankruptcies.
5. Office of Financial Defense
a. Our economy is the heart and brain of our national security. We are under constant threat right now of Economic War. Immediately set up and office to oversee all economic decisions of this country – ESPECIALLY CONGRESS AND THE BUDGET.

Some food for thought for you and the many listeners we serve.

HOW CAN THE CONSUMPTION ECONOMY SURVIVE WITHOUT CONSUMERS

Who is going to be buying cars?

Answer to that – very few. So bail out the auto industry – and It will happen – and they will find themselves right back in trough again because they can’t sell as many cars as they once did. Do we really think people are going to be traveling all over? No they can’t afford to and wait until the credit card companies cut up to 40% of the available credit of consumers. The consumer is already cut off from home equity, refinancing and will emerge regardless of bailouts hobbled at best. Well what does that do to the consumption economy businesses depend on. Yes a car wreck no matter what.

I use the car wreck analogy because as businesses like the auto industry, which is topical, are bailed out, even if you and I don’t agree, the consumer certainly isn’t going to be out buying cars and worse many just can’t. Consumers now suffer from 30-60-90-120 day lates on their credit reports. Consumers are unemployed and with an Obama program of “Great Works” the consumers supporting the economy will find themselves under employed even if they go build bridges and roads. May be great for job numbers and political equity but overall for the economy it will fail to meet the massive waves of chaos that have hit our shores and will continue to drown many industry sectors.

The government is saying this will tighten the belt – it will get worse – and this process will expunge the nation’s credit addicted consumers and bad debts. Really? So you do that and tens of millions of consumer emerge with their credit destroyed and wouldn’t qualify to use credit to purchase anymore. What do you do about that. NOTHING! There are few big ideas, including my rants, that would seem to attack the deficit (our cancer) and the various symptoms to correct our course in history. And by every measure this is historic and will be remembered as the depression of the 21st century. We feel better saying deep recession but it’s a farce. Consumers are the lifeblood of the economy and they are affected the worst.

Yes everyone is culpable – consumer – bank – credit cards etc.. in this massive upheaval, but that is yesterday. No matter where go – There you are! So we are here and watching the corpses of our consumers rotting on the credit battlefield as big business and our government just run right over them. Mark my words a stimulus package – with pandered money – with small checks to consumers will happen. Appalling – that is a waste of money for sure. What about the consumer having credit expunged so they can get credit, having all Americans consolidate debt under one payment (huge surge for banks) so the toxicity of the loans and portfolios isn’t as bad, economy bonds in exchange for some taxes (Japan was a saving nation which saved their financial industry from total wipeout),the 10 percent solution for the deficit – on and on. You thankfully allow me to rant therefore I have a voice – just as you do – can’t we together do something to impact this? Let’s see.

THE TITANIC

Is the US Economy and Big Business too big to sink?

Too big to fail! We have heard this time and time again. Through the history books we heard the same label about the Titanic. Industry after industry keeps running aground as the government continues to bail water out of the sinking ships. How do we save the ship as the life rafts have already been used. What’s next? Pensions, hedge funds, retailers, airlines! How can the US keep printing and borrowing money to plug the leaks stay afloat? IT CAN’T.

The collapse of the US economy is upon us, the ship hit a mortgage iceberg first, then insurance, and keeps ripping the hull at every turn. Bush was right to call Wall Street drunk and I throw in politicians also, Remember Exxon Valdese. The people steering our economic ship were drunk and now even hung over their heads are not screwed on right. while government believes bailing out companies that are too big to fail –like AIG – we all sit in the second and third decks locked in like rats powerless to do anything but drown. The Bread lines we are so familiar with that represented people during the Great Depression have been replaced by companies and entire industries. Everyone is looking to get a hand out, bailout and some way out. But government is not the answer.

During the 80s, 90s and early 2000 the companies we see trying to get a seat at the table have aggregated so many businesses that they are way “too big” now and many can’t fail. So the government has to bail them out? YES. But why hasn’t someone thought of a plan to break up these businesses if government has to step in. GM finance would be a huge IPO and reap billions for GM. GE finance the same and banks and insurance companies can do the same. I know the Leveraged Buyout funds are just licking their lips ready to begin buying assets from failed business. Why isn’t the government forcing the issue that if you take our money we will force a debundling of car brands, insurance lines of business, bank brokerages and lines of business. If we lend the money we can recover the capital quickly through sale of assets and IPOs and really regenerate the markets and streamline big business. Now doesn’t that sound more plausible?

What about the 10% solution for retiring the deficit I suggested. Want a pension and hedge fund bailout then make the markets soar by mandating 10% of their portfolios go toward retiring the US debt. Heck they own some already buying more would cause the stock market to soar. What about Economy Bonds. What about a forced refinancing and consolidation of every household’s debt. 30,60, 90 day lates expunged. If we do nothing but bailout companies then our economy – a consumption economy – will fail worse because millions are out of work and can’t pay their bills. Even if you can pay your bills millions are so hobbled they won’t be buying a car, products, goods and services as they were over the last 30 years. Worse even more millions can’t participate in the future economy because their credit is ruined. How can the US economy be sustained this way. IT CAN’T.

But the government choice is to print money 24-7. Isn’t it clear that this strategy will for certain devalue the dollar and risk our currency as the underpinning of trade. The US is also borrowing money from around the world that it can’t pay back. We see the headlines of trillions of dollars necessary to save the US economy but how does this help when our consumption economy is getting wiped out?

I believe the plan is flawed, even if we take large ownership stakes in businesses to help assure shareholders, you and me, that the money being invested actually is repaid. But if we bail out airlines or auto then what happens when people can’t buy a car? Right it fails later anyway. So the government is trying to play smart and casting off life boats like crazy. But the government is also at the helm and I am certain the policies being implemented will take it down with the ship. Ans remember you and I are trapped on the ship and the life boat, probably in the form of a silly, useless check to stimulate the economy, is what we are being offered. Well grab a life jacket and jump into freezing water – you are sure to economically die either way.

BIG GOVERNMENT BAILS OUT BIG BUSINESS: WHAT HAPPENED TO BAILING OUT CONSUMERS DIRECTLY

Despite Bailouts if consumers can’t or won’t buy PRODUCTS, GOODS AND SERVICES these industries will fail anyway

Big Government is bailing out big business. Citigroup is another example. While our politicians continue to prop up various sectors of the economy consumers like you and me sit on the sidelines not consuming products, goods and services. So what does that mean? Well Citigroup like so many banks is sitting on “toxic loans”. The loans are toxic because Americans are defaulting and behind on mortgage payments, car loans, credit cards and many just trying to provide the basics for their families. With no plan to protect these people the circle will continue to go around and around because millions – tens of millions - of consumers won’t support our economy by buying goods and services because they can’t. This will assure every bailout scenario will fail over time.

50,000 workers laid off at Citigroup. Do you think those people and so many others unemployed and struggling to make ends meet will actually buy a new car, big ticket items, electronics, travel, dinning and the list goes on. Certainly not. Even worse when the years of financial woes to come continue to batter people’s credit rating there will be segment of our society that just can’t or won’t buy things. Forget about banks tightening credit, tens of millions of consumers won’t even qualify to come back into the market to support our failed and failing economic sectors. Tens of millions of consumers will have terrible credit ratings and be shut out. An immediate impact would be to expunge 30, 60, 90 days lates for people trying to pay their bills over the last 12 months and next 12 months. That would have an immediate “mainstream” impact and assure future spending. Otherwise this economy will not recover any time soon especially due to lack of consumption by those hobbled unworthy credit consumers.

Here is an example. The auto manufacturers. Even if they are bailed out their future is bleak. So they survive for a period of time but have no hope of meeting sales requirements in the future. What of airlines, banks and wait for retail among others that will for certain underperform because consumers just aren’t what they used to be. Why isn’t a team of experts, leverage buy out, investment bankers, economist and others with real world experience going into the segments and buying assets that these “To Big To Fail” businesses sit on while their hands are out to government. Why isn’t GM spinning out and taking public GM finance, GE Finance, all the brands they have acquired and rolled up over the past 20 years. Now there is a plan – even if we loan them money we need to break up the conglomerates and unlock shareholder value. If the companies are too big to fail then break them up and fast.

I have spoken to thousands of consumers and everyday people, unemployed, underemployed and credit constrained. Almost 100 percent of them are not buying things – especially big ticket items – and are being forced to raid their stock holdings and 401ks to survive despite huge penalties. With Desperality comes Depression. A deep recession, and we are in one, needs to have consumer support to turn around. There is no way the American consumer of the 90’s and early 2000’s are going to be even close to the sales numbers this year and for the foreseeable future. Without us, you and me, big government bailing out their donors and friends in big business have a failed strategy.

Here comes our President elect. Even now, and I have been saying for a year, the bailout packages combined are well over $1.5 trillion and will approach $2 trillion fast. Well here is a plan to save us! Consumers first.

1. The US takes its next $700 billion and places it in a trust to insure every American’s credit risk. Now that would be a stimulus and guess what assure banks that their portfolios aren’t toxic.
2. Every American gets a 30 day holiday on payments so they can catch up on their bills. Yes this would stifle collections but frankly we are already giving these institutions money anyway.
3. Support every American in an effort to refinance the entirety of their debt under one payment scheme again supported – not paid for – by the government guarantee program.
4. Expunge 30 – 90 day lates across the board over last 12 and at least next 12 months to assure that consumers will participate and can participate in the economy or we will sink.

Then Economy

1. We have an Office of Homeland Defense. Wouldn’t it make sense to create an office of Financial Defense to regulate and oversee the vulnerability of the America heart and soul – Capitalism. We are wide open to the real threat of Economic War by most any nation on earth. Not a shot needs to be fired to crater our economy and therefore our way of life.
2. American Board of Directors comprised of the most capable – real world – executives to oversee all the endeavors of runaway government and make sure we only spend what we have not to borrow against our future. If we had real world executives the US would not be bankrupt and can be turned around from the brink of catastrophe,
3. Pay off the deficit by requiring 10% of all portfolios in the US to be pooled into a deficit fund to retire our debt. All the intuitions must invest 100% of the money anyway why don’t we require that all invest in our nation. We would raise over $10 trillion in the first year, pay off the deficit and their stock portfolios would skyrocket.
4. Immediately step into the world markets and buy back as much currency as we can. The US dollar is soon to lose its status as the underpinnings of world trade. Worse the FED is printing money 24-7 flooding the market with dollars that will roost and cause inflation or perhaps hyper inflation. What would happen if a country like China or Russia dumps a hoard of dollars on the market. Or worse doesn’t show up at our next treasury action. You have it – Economic War.

I am certain that if American consumers don’t get real relief the economy will continue to erode. If we send out say a $1000 check to everyone that qualifies I will be sickened. That is a voters bribe and does nothing for the eroding credit and future credit worthiness that supports spending. They will say it stimulates spending and consumption and it will for some but frankly its flawed, ridiculous and I certainly don’t want Russia and China among others to lend me money or write me a check.

ECONOMIC PROZAC: DEPRESSED CONSUMERS CAN'T BUY GOODS AND SERVICES

Bail out after bailout of big industry won’t help if American’s can’t or won’t consumer their products

A depression is looming over America. Recession is already upon us and American’s inability to afford their current debts and worse companies’ inability sell goods to them will exasperate the economic woes. Regardless of the American people’s vote, the bailout of big businesses will continue, although I suspect overwhelmingly voters would choose bailing out themselves too. Why is this a good idea?

Much of the trouble with banks, auto manufacturers and definitely retailers to come is that consumers are strapped with debt, having lines of credit and credit cards cut off and can’t squeeze any money out to support the industries being bailed out. This should be at the core of the bailout. My solution calls for a converged strategy where consumers get a cash infusion and loans are provided to failing companies. The convergence occurs when consumers clean up their balance sheets so big business won’t have so many bankruptcies and defaults, the core of the problem, while businesses shore up their balance sheet while assuring more spending in the future that is necessary to bolster sales.

Worse millions of Americans have been burdened with 30, 60, 90 day lates on their credit reports further assuring that future access to loans for houses, cars, appliances, air travel etc.. will not be available for up to a decade. This issue alone will cause havoc long term by denying the fundamental supporters in our economy the ability to consume. Bailouts are only a short term fix. With programs focused on simply cash for the big companies we fail to see the long term problems and the ongoing defaults and bankruptcies ahead.

A balanced approach. If government is going to roll up bad loans, thus far in real estate and soon in credit cards, student loans and all other credit markets, then why don’t they attack the core issue to help every American pay their bills. Removing all late payments from the credit bureau over the past year and insulating the next year is a great way to relieve stress and assure a strong future economy. A balanced approach of spending our money to support industry while giving Americans enough money to pay off their revolving debt, up to 100 thousand dollars, will change the game. Fundamentally another issues looms long term. Our credit addicted nation needs to transition to a savings and investment nation again like prior to 1960. Why doesn’t the government issue economy bonds to US citizens instead of selling and refinancing our debt all over the world. This will provide every American a way to have a nest egg while the government still gets to use the money.

The many ways to solve our economic woes are out there. But if we do not fundamentally release the consumer’s burdens and clean up credit bureau reporting the US economy will suffer long term and assure we sink straight into a depression. The government should be issuing Economic Prozac to assure American consumers will be there after the industries are cleaned up. A fair and balanced approach.

ECONOMIC PROZAC: DEPRESSED CONSUMERS CAN'T BUY GOODS AND SERVICES

Bail out after bailout of big industry won’t help if American’s can’t or won’t consumer their products

A depression is looming over America. Recession is already upon us and American’s inability to afford their current debts and worse companies’ inability sell goods to them will exasperate the economic woes. Regardless of the American people’s vote, the bailout of big businesses will continue, although I suspect overwhelmingly voters would choose bailing out themselves too. Why is this a good idea?

Much of the trouble with banks, auto manufacturers and definitely retailers to come is that consumers are strapped with debt, having lines of credit and credit cards cut off and can’t squeeze any money out to support the industries being bailed out. This should be at the core of the bailout. My solution calls for a converged strategy where consumers get a cash infusion and loans are provided to failing companies. The convergence occurs when consumers clean up their balance sheets so big business won’t have so many bankruptcies and defaults, the core of the problem, while businesses shore up their balance sheet while assuring more spending in the future that is necessary to bolster sales.

Worse millions of Americans have been burdened with 30, 60, 90 day lates on their credit reports further assuring that future access to loans for houses, cars, appliances, air travel etc.. will not be available for up to a decade. This issue alone will cause havoc long term by denying the fundamental supporters in our economy the ability to consume. Bailouts are only a short term fix. With programs focused on simply cash for the big companies we fail to see the long term problems and the ongoing defaults and bankruptcies ahead.

A balanced approach. If government is going to roll up bad loans, thus far in real estate and soon in credit cards, student loans and all other credit markets, then why don’t they attack the core issue to help every American pay their bills. Removing all late payments from the credit bureau over the past year and insulating the next year is a great way to relieve stress and assure a strong future economy. A balanced approach of spending our money to support industry while giving Americans enough money to pay off their revolving debt, up to 100 thousand dollars, will change the game. Fundamentally another issues looms long term. Our credit addicted nation needs to transition to a savings and investment nation again like prior to 1960. Why doesn’t the government issue economy bonds to US citizens instead of selling and refinancing our debt all over the world. This will provide every American a way to have a nest egg while the government still gets to use the money.

The many ways to solve our economic woes are out there. But if we do not fundamentally release the consumer’s burdens and clean up credit bureau reporting the US economy will suffer long term and assure we sink straight into a depression. The government should be issuing Economic Prozac to assure American consumers will be there after the industries are cleaned up. A fair and balanced approach.

OLIVER TWIST: PLEASE SIR CAN I HAVE MORE MONEY FROM THE GOVERNMENT

Glynn’s Appearance on Fox news underscores predictions of industries with their hand out

It’s a run on the Federal Government by many industries and giant companies. Big companies are running to the government for help – AGAIN! Auto, Finance, Airline and there are many more mouths to feed. The cascade of the housing and financial meltdown is rippling through every sector of the economy and it’s a worldwide cotangent. Even China is being hurt and had to implement a stimulus package. When do the handouts stop!

The most recent proposal to bailout the auto industry and here comes AMEX adds to the long and growing line of companies seeking government handouts. Although proposed investments are being considered in businesses and loans carrying high interest with warrants it is still just a drop in the bucket. $700 billion is not enough and I suspect it is going to at least $1.5 trillion over the next year. And what we don’t see is the off US balance sheet money being used to help industries suffering front the effects of long term cancer.

The government is wrapping feeble businesses and industries with band aids so much that they look like a mummy. Mummies are already dead when wrapped and this is true for many companies and even industries that continue to line up with their dead hands out. The Ferry Man skeleton we are all familiar with wants a coin in its bony hand to get across the lake. In this case the lake is like the Great Lakes and the shore is so far away many of the companies will drown because of terrible management, unions and the inability of American consumers to consume. These are the fact and wait until retail is hammered this Christmas and forced to come to the government with a hand out. I say chop it off. The government is trying to be Rumpelstiltskin but the spinning of hey into gold isn’t going to happen.

We all want solutions and the cancer this nation faces is the deficit and the banks not lending and cutting off credit without methadone. And when this is all over, which will be a long time, consumer will emerge with horrible credit – 30, 60 and 90 day late or worse bankruptcy. Everyone is hobbled and millions won’t be able to access decent loans and credit cards, auto loans etc in the future. Why doesn’t someone give relief there and allow consumers trying to pay their bills to have their records wiped clean if they have had any negative reporting over the last year. If someone doesn’t recognize this as a major consumption problem then we are blind and this will trickle right down to small businesses, retail, airlines and every industry that requires US consumers to consume. This alone will exasperate the long term crisis.

Why don’t these giant companies immediately begin selling off profitable assets and businesses and even taking them public to unlock shareholder value. GM finance, GE finance and AMEX insurance for example. All huge value producers and obvious vehicles to raise capital though spin offs and IPOs. Also, why aren’t we tackling the deficit – I offered up the 10% solution that I believe is a revolutionary opportunity for everyone. I don’t propose we shut down the auto industry but I do want a bridge loan provided and then a debundling of assets as I would require in other industries. All these business have acquired so many companies throughout the 80’s and 90’s that they are now way upside down and just too big. We should assemble a group of turn around and Leverage Buy Out groups immediately to replace management and get these companies profitable as a condition of any loan or hand outs. These people are experts in unlocking value and have 100’s of billions to participate as a partner in the plans.

There are so many capitalist plans that can be implemented and if we don’t pursue them or force them to happen this will continue to be a cancer we cannot recover from. Worse it has spread to a vast group of consumers that just are out of the consumption game and this will perpetuate the pain everyone is undergoing. With or without our input these bailouts will happen. And the line up just will not end until government puts its foot on the necks of the failing industries and get out of the commercial lending arena.