Google and Apple

There was some ,,terrible'' News about Google (GOOG, NASDAQ) today.  Somebody at R. R. Donnelley and Company (definitely not a ,,Star Quality'' Company, a true Has Been) seems to have made a Mistake or somebody at Google made a Mistake in reporting Google Earnings without the proper Orchestration and Google Stock immediately took a Tumble of more than 10% in Seconds.  Google, obviously a Company with Clout, was not only able to call NASDAQ and get through but also able to demand and succeed in having the Trading of the Stock suspended until it ,,corrected'' the News but not before $ 26 Billion went down the Toilet.

http://marketday.nbcnews.com/_news/2012/10/18/14540754-google-error-triggers-pending-larry-twitter-meme?lite

The Good News is that Google has the right Telephone Numbers and knows whom to call at NASDAQ.  The not so good News is that the Google Earnings took a Tumble and a certain Kind of Reality is setting in:  spectacular Earnings for Newstarts can often be achieved and even continue for a long Time but not forever.  By acquiring Motorola, Google has entered the ,,Mainstream'' and in the Mainstream Things are not as simple as for a Start Up; even for a giant Start Up which Google is.

Entertaining and amusing to some is that Google seemed to have used ,,Smart Phones'' for the Transmission of at least some of the Information to R. R. Donnelley and/or to the SEC; apparently, Google Higher Ups are busy using their Android Smart Phones and have fallen out of the Habit of just sitting down at some Desk and doing their Work the ,,Old Fashioned Way;''  proofing, reading and re reading something that is sent out because once it is sent out, it becomes just that; sent.  Such ,,Work'' is not for Big People; it is only for the little People, it seems.

But Google is not alone in this Stratosphere.  The Darling of the Stock Market right now is and has been for some Time, Apple Computer (AAPL, NASDAQ), not all that long ago a nearly bankrupt Company.  Apple rose from the Ashes under the masterful Hand of Steve Jobs, who backed his creative Innovations with equally creative Marketing and who went after its Competitors with ruthless Vengeance.  Trouble is, there are Dozens of Cell Phones and ,,Tablets'' which work really just as fine as Apple and one can sustain this Kind of Sizzle for only so long.  Steve Jobs masterfully maintained the Apple Legend for far longer than any savvy Marketing Executive would have thought possible but his untimely Death merely accelerated the Inevitable and Tim Cook...well, Tim Cook is no Steve Jobs and the First One who should know this and hopefully does, is Tim Cook himself.  Tim Cook overshot the Mark with the Introduction of the latest iPhone and overshot it badly; apparently the Orders for 5 Million iPhones were not 5 Million; and just because Tim Cook said there would be 5 Million iPhones sold did not cause Peopole to snatch those iPhones fast enough just to prove Tim Cook was right in predicting the Number of iPhones to be sold.  Apple Stock did not fare as badly as Google Stock did; it went down only 8,5%.  Other Warts, which were dismissed during Steve Jobs' Reign, keep raising their ugly Heads:  the Working Conditions at Foxconn which is the primary Producer of iPhones, the Lawsuits which Apple is pursuing against everybody in Sight (including the $ 1 Billion Judgment Apple was awarded against Samsung, now on Appeal) and more.

Still, none of the Above really points to the Crux of the Problem here.  With the American Economy in severe Trouble, with neither Mr. Obama or Mr. Romney having put out a credible Plan as to how they are going to pull the Economy out if its Tailspin, the more relevant Question should really have to do with just how many Jobs are these two Companies creating or even sustaining in the United States.

The Reader should be aware that we are talking here about two enormous Giants; one, Apple,the largest Company in the World in Terms of Capitalization.  Apple is bigger than General Motors although, it should be noted, General Motors is no longr General Motors but Apple is bigger than Exxon, too and, sometimes, that stretches the Limits of Credulity.

The Answer is that these two Companies employ very, very few People in the United States and, really, not that many Worldwide either.  Of Course, Investors on the Stock Market are not interested in creating Jobs; they are interested in making Money and that may not offer any Benefit to the Economy, regardless of what Mr. Bernanke thinks, but, as long as they are not breaking any Laws, there is no Choice but to tolerate their Practices.

However, the Question should be asked why the Focus of the News Media on these two Companies and, possibly, others of less Significance.  We are not talking about Trade Publications but rather, Mainstream.  These two Companies, which have amassed Billions and Zillions have not added any significant Jobs to the American Economy and they are not going to.  We, as a Nation, can be more mature.  We can pay less Importance to what Google and Apple do or think or even earn and pay more Attention how to create or ,,re-create'' Jobs which have evaporated, possibly, in Part, due to the Actions of these two Companies and focus on some of the real, acute and crucial Problems which this Country is facing today, economically.

Expert ,,Recommendations'' for President of the United States

In less than a Month, the Election for President of the United States will be over, setting, most likely, a Record on how much Money has been sent for electing a Public Official anywhere, ever...

Of more than inconsequential Interest appear to be some of the People whose Presidential ,,Preference'' is being reported by various Media, People whom we should take into Account, as ,,Authorities,'' or ,,Experts'' of some Sort...otherwise, why even mention what their Opinion is on the Subject?

For Mitt Romney:  Lindsay Lohan, fresh from her Nighttime Hotel Escapade in New York!

 

Lindsay Lohan

http://todayentertainment.today.com/_news/2012/10/12/14392258-lindsay-lohan-not-yet-registered-to-vote-endorses-mitt-romney?lite

For Barack Obama:  Bruce Springsteen, a major Force in 20th Century American Politics!

 

Bruce Springsteen

http://nbcpolitics.nbcnews.com/_news/2012/10/13/14418216-bruce-springsteen-to-campaign-for-obama-in-ohio?lite

Just how is the Opinion of these People relevant to the crucial Issues which confront this Country today?

One Publication described certain Endorsements as having the Potential to be toxic.  What may be equally, if not more toxic is the Attention and Importance we and the Press pay to the Opinions of these People, just as, how can one forget, Mike Huckabee running for President being endorsed by Chuck Norris?  Are these People who should shape our Political Thinking and be held up by the Press as ,,Authorities'' of any Sort whatsoever?

Important Footnote:  we are told, Lindsay Lohan will soon register to vote in order to add ,,Gravitas'' to her Endorsement.

The Vice Presidential Debate

The one and only Vice Presidential Debate took place on Thursday.  It was at a Level which far superceded the preceding Affair which took place Four Years ago between Vice President (then Senator) Joe Biden and then Governor of Alaska Sarah Palin.  The latter, one could say, was merely a Caricature of a Vice Presidential Candidate, a Choice which Senator John McCain came to regret deeply but, of course, too late for himself.

Vice President Joseph R. Biden

Both Vice President Joe Biden and Congressman Paul Ryan had one Job to do and they both knew it; enhance the Position of their respective Presidential Running Mate and inflict as much Damage on the Opposition as possible, especially in View of the unexpected outcome of the First Presidential Debate only a Week ago.

Congressman Paul D. Ryan

Each of the two Opponents put into sharp Focus the Positions of their respective Ticket although, sadly, the National Audience for the Debate was modest; not too many seemed to care, apparently, what each had to say.  At the same Time, however, this Observer believes, they both revealed, either unwittingly or because they did not know how else to avoid, the Weaknesses in their Views.

Vice President Biden argued eloquently and flawlessly for the Responsibilities of the Federal Government when it comes to Social Security and Medicare among other Things but he was not able to offer a Plan which would show how the Federal Government can sustain over the long Term, or even the short or moderate Term, these Expenditures.  Although the Vice President argued, passionately, for an end to the ,,Tax Cut'' for People making $250.000,00 or more, the Truth of the Matter is, even if that Plan were to materialize despite the fanatical and, some would say, illogical Opposition by the Republican Members of Congress, that, alone, would not come even close to beginning to deal with the horrendous Federal Deficit which threatens to cripple not only Social Security and Medicare, but much, much more.

Congressman Ryan, on the other Hand, made the Argument, with equal Eloquence, for the Management and Control of Social Security and Medicare (but not Defense) Costs.  Certainly, Management and Control of these Costs (whether in the Form proposed by Congressman Ryan, who has been advocating much of what he said long before he became a Vice Presidential Candidate) or another, are necessary.  But, assuming for a Moment, that everything that Congressman Ryan is proposing were to be implemented, that, too, would not come even close to dealing with the - just as horrendous - Federal Deficit.

So, where does that leave us?  Lost in the Equation was the Observation and Warning by IMF Director Christine Lagarde, who warned of dire Consequences if these severe financial Problems are not addressed and, soon.

Mme. Christine (Madeleine Odette) Lagarde, Director of the IMF

One interesting ,,Tidbit'' that came out during the dueling was about Embassy Security Details.  Vice President Biden pointed out, correctly, that Congressman Ryan had voted against increasing the Security Detail Budget for Embassies and Consulates abroad by $300 Million.  One might well wonder just how much Money is being spent on Embassy Security Details in the First Place, if the Increase that was being sought, alone, was $ 300 Million.  One might equally wonder why the U. S. Embassy in Baghdad has nearly 16,000 Individuals working there (Largest U. S. Embassy abroad, according to the last Fact Check).  You could ask, which is the Second largest U. S. Embassy abroad.  Here is the Answer:  Beijing, China and, although just recently opened, it is too small and the Construction of an Addition is under Way.
 

Rising Gasoline Prices and Government Policy

Gasoline Prices are on the Rise again nationally but particularly in California.  Some Reports have Gasoline selling at $ 5,00 and above in Southern California and $ 6,00 in Northern California, particularly in San Francisco.

Gasoline Companies blame the usual Culprits:  Refinery Fires or Power Outages, Pipeline Problems, Switch from Summer Blend to Winter Blend (Winter Blend for California?), you name it, they can come up with an Explanation for it.  Some of us are reminded by all this of the Good Ole' Days when Anita Bryant was pitching Orange Juice from Florida and then the News Reports were coming up with one Florida Frost after another, justifying higher and higher Orange Prices; all that is, until Brazil started exporting Oranges and put an End to that cute little Game.

But Gasoline is not Orange Juice; the World is locked in an Oil Demand/Supply Puzzle; current Supplies may be ,,adequate'' but going forward they are not and will never be; Motorists in Lagos consume Gasoline just as voraciously as Motorists in Los Angeles.  Disruptions by Wars and Boycotts, particularly in the Middle East have essentially put upward Pressure on Petroleum Prices; so has, quietly, imperceptibly, Saudi Arabia, which, when it comes to strategizing Oil Prices can outbest the best Poker Players in the World.   But all this reveals only Part of the Answer.  The Long, Medium and even the Short Trend of Oil Consumption in the Form of Gasoline is up and nearly nothing seems to be able to stop it.  Whether you go to Baltimore, Berlin, Bucharest, Buenos Aires, one Thing is evident:  People just drive.

Is there a Solution?  There is no easy Solution.  But there can be a Strategy.  A Strategy which requires Political Courage and Vision.  Underlying such a Strategy is the empirically verifiable Assumption that People will drive just as much whether Gasoline costs $ 2,00 a Gallon as it used to or $ 4,00 a Gallon, as it does now or $ 10,00 a Gallon as it costs in some other Parts of the World.  Such an Assumption is verifiable even within the United States where People in California and New York, which have some of the Country's highest Prices drive just as much or possibly even more than say, some Place like Kansas or Wyoming where Gasoline costs much less.  They may complain about it, even vociferously at Times but drive they will.  According to Economists' Definition, Demand for Gasoline is ,,inelastic'' but it is more than that.  It is also culturally driven and has been for a very, very long Time.  As an anecdotal Example, the Federal Government ,,rescued'' General Motors by pumping $ 60 Billion into a Company without a Future; into a ,,Has Been;'' for the same Amount of Money, it probably could have started building Street Cars in Los Angeles and put just as many People back to Work (,,saving or creating'' Jobs).  But it didn't.  Instead, it chose to to ,,rescue'' General Motors.  What does one expect People to do when they buy their new General Motors Car?  (either a traditional ,,Belchfire'' or the new $ 78,000 Chevy Volt - Manufacturing Cost - which can be bought for Half of what it costs to make it)

Sit on their Porch in their Rocking Chair, look at the Car and say, ,,Look, Ma, I just bought a new General Motors Car?''

Yes, there used to be Street Cars in Los Angeles and the feeble Attempt to ,,reintroduce'' Light Rail Transporatation into Los Angeles does not come close to even being a Shadow of what used to exist in a Metropolitan Area now more than tenfold larger in Size and Population

(Speaking of Los Angeles, of course, one had to do something about the ,,405 San Diego Freeway'' to accommodate all of those new General Motors Cars being sold, some for more than what it costs to make them, some for less, by unleasing a Billion Dollar Repair Project with ,,Carmageddon II and all.''  A few more Billion Dollars there, ,,creating or saving'' more Jobs...what ever happened to the Street Cars in Los Angeles?  Answer:  They went the Way of the ,,Do Do Bird'' in the 1960's when, yes, you guessed it, General Motors bought the Operation from the City of Los Angeles and then closed it down to make Way for, what else?  General Motors Cars)

 A Street Car in the northern City of Bremen, Germany

The Strategy which has been shown to work elsewhere, both East and West is to get ahead of the Curve of the Gasoline and Petroleum Companies and, yes, even ahead of the Curve of the Oil Producing States.  Instead of begging and jawboning for lower Oil Prices, along with threatening to increase Oil Production (some at horrific Environmental Costs), the Government should pre empt Price Increases by Gasoline Companies by taxing Gasoline in line with the anticipated Increases for Gasoline Prices.  That's how they do it in England, Russia, France, Argentina, yes, even in China.

People there drive just as much.  But the excess Revenue flows into the Government's Pockets.  Something akin to Alcohol or Cigarette Tax.  You say, but Cigarette and Alcohol can be harmful or fatal to Health?  So can and is Auto Exhaust Pollution and even those much touted ,,Electric'' or Hybrid Cars'' which simply transfer the Pollution from one Place to another.

But, you say, all the Government is going to do with that Revenue is waste it?  Well, you are absolutely right.  They may and they probably will, some or much of it.  That is why we all have an Obligation to make our Views known to Local, State and Federal Officials, fight for the Issues we believe in, and attract Attention to Issues which lead the Government (Federal, State or Local) down the wrong Path, be that the War in Iraq or the Bridge to Nowhere, along with a Myriad of other equally important or less imporant Issues, but...ya know what?



Think about it...Worst Case Scenario, would you rather see the Government waste the Money, or see Exxon/Mobil, Texaco, Chevron and others like them stuff their Executives' Pockets and Corporate Coffers with it?

 

The (Un)Employment Statistics

The recently released Unemployment Figures by the Labor Department show a surprising Decline of the Unemployment Rate to 7,8%.  The Résumé represented by these Figures will undoubtedly help President Obama and most Polls confirm this as President Obama is gradually (and rather decisively) pulling ahead of former Governor Romney.

One Factor yet to be put into the Equation is what will be the Effect of the First Presidential Debate during which, according to most Watchers, Mr. Romney outperformed Mr. Obama.  However, historically, Debates, no matter who they are won by, have an uphill Battle in dramatically moving the Electorate; they may enlighten and shed Light on the Candidates' Positions but People do not make up their Minds whom to vote for based on the Debates, except on rare Occasions.

Coming back to the Unemployment Statistics released by the Labor Department on Friday, 6 October, one significant Voice which could be heard expressing Skepticism was that of John F. (Jack) Welch, former Head of GE.

John F. (Jack) Welch

 

Jack Welch, unlike his Successor, Jeffrey Immelt (about whom we have written elsewhere in this Column; see ,,Dancing Elephants'')

http://www.blogger.com/blogger.g?blogID=468652052156108416#editor/target=post;postID=2580542179106125046

was a towering and shaping Leader of General Electric, truly a Leader of ,,Grand'' Proportions like his Predecessor, Reginald H. Jones and those others before both of them.  Jack Welch came out thundering and questioned the Accuracy of the Figures of the Labor Department citing, validly, among other Things that he sees no Evidence in the Economy to support those Figures.  Unfortunately, Mr. Welch went a Step too far and theorized, ,,postulated'' that a Chicago Consipracy of some Sort was behind all this, something reminscent, to his Mind, one supposes, of the good ole' Daly Days.

http://leanforward.msnbc.com/_news/2012/10/05/14248410-welch-i-have-no-evidence-for-jobs-conspiracy-theory-but-i-dont-take-it-back?lite

Reginald H. Jones, former (Legendary) Chairman of General Electric

 

One should, of course, not make such Accusations and Mr. Welch may well regret having sent the ,,Tweet'' that made the Accusation.

However, Secretary of Labor Hilda L. Solis's Protestations to Jack Welch's Criticism notwithstanding, the Department of Labor, under the Obama Administration and before has had less than a Stellar Performance when it comes to the Accuracy of such Statistics.  More frequently than one would like, or should, these Figures have been revised upwards and downwards and sideways and every which Way.  Mr. Welch is correct in stating that the chronically unemployed and the People who have simply given up looking for Work are gradually being excluded from these Unemployment Statistics and that, again, gradually, is giving the Unemplyoment Quotient a gradually different Coloration.

 

Hilda L. Solis, Secretary of Labor

Mr. Welch could have made the further Argument, which he did not that the new Jobless Claim Reprts and the Unemployment Statistics are derived from different and non correlational Data; thusly making both Sets of Figures suspect.

More simply, Mr. Welch could have made the Argument that the Department of Labor, whether it be under Hilda L. Solis or some of her recent Predecssors, can really do a far better Job at coming up with Unemplyoment Statistics which are more accurate, credible, more in Synch with the Jobless Claims and more reflective of what is really going on in the Job Market, Presidential Election or not.

 

Good Choice of Words - ,,Intentional Irony''

Elswhere in this Column we reported a Couple of Times regarding some of the ,,Escapades'' of Lady Ga Ga; who, it seems, voraciously grabs at every Opportunity to gain her some Publicity or Attention; certainly, to some, dismissively tossing away a ,,Pack of Joints'' or whatever they were on Stage and then selecting a different ,,Joint'' (she must be a good Judge of Quality) to smoke rivals even her ,,Meat Costumes'' which were disgusting enough to make on think of Food Safety in earnest  (see our earlier recent Post).

Sometimes, trying too hard can have its Pitfalls, though.  Lady Ga Ga's main Rival, Madonna, who, it seems, is trying to hang on to her fading ,,Stardust'' by the Skin of her Teeth, her Nipple Cone Outfit Performances ,,à la Burlesque'' having been eclipsed by Lady Ga Ga's ,,Boobie Kalishnikov'' Photography Performance.

So what does Madonna do?  She goes on Stage extolling the Virtues of President Obama and then calls him America's First ,,Black Moslem'' President...

http://entertainment.nbcnews.com/_news/2012/09/25/14098317-madonna-i-was-being-ironic-when-i-called-obama-a-black-muslim?lite

(Click on the Link for the Video)

Who was her High School English Teacher?  Don't ask...

Who is her Publicity Agent?  We can only surmise, it could have been someone who suggested to her what to say to make up for the Gaffe:  ,,I was being Ironic.''  Ironic?

Did anyone suggest to her that she might want to say, ,,I misspoke'' or ,,I made a Mistake?''

Nah...never admit...never, never, never...

Punting

The Annual Deficit for the Budget Year about to close will again exceed $ 1 Billion.  While this should not come as a Surprise, it should nonetheless be jolting, especially in View of the Fact that Congress, consisting of a Group of highly paid Individuals, has chosen to be in Session for 4 Days in August, 8 Days in September and (according to the Schedule), 0 Days in October.

http://www.nytimes.com/2012/09/26/us/politics/obama-faces-test-as-deficit-stays-above-1-trillion.html?nl=todaysheadlines&emc=edit_th_20120926&moc.semityn.www

(Click the Link above in ,,The New York Times'' for more Details)


Regardless of who the Victor will be and Mr. Romney's Chances of being the Victor appear to be diminishing, a bit too rapidly, many of them due to his own doing, the Issue has thusly been punted to beyond the Election Day in November  (Comments by Mr. Romney wondering why Airplane Windows cannot be opened can be, at a certain Level, even more damaging than Comments about the ,,47%.'').

What is going to happen after Election Day?  Likely, a Period of bitter and divisive Discord will ensue and, of course, none of it would be helpful or constructive.

However, one Fear worth considering may be, what Mr. Bernanke might do, in View of a deteriorating Situation.

It is not unlikely that Mr. Bernanke  may come up again with some ill conceived Theory about what he wants to do about ,,fixing the Economy.''  It is arguable that if Mr. Bernanke were to be sent back to Princeton he would do less Damage from there but that poses an interesting Question:  had he been alive, would President Woodrow W. Wilson have rehired him?

Ben Bernanke, Chairman of the Federal Reserve

and former Professor of Economics at Princeton University

 

 President Woodrow W. Wilson

                                                                     28th President of the United States

                                                                     President of Princeton University (1902-1910)

 

 

A Hard Act to follow - not to mention...Super High Class

Now, here, again, is Lady Ga Ga, about whom we have written in this Column before.  This Time, a Super High Class Act, hard to follow, smoking Pot on Stage, in Amsterdam where, of course, smoking Pot is legal although, one should  add, a recent Regulation prevents non Dutch Citizens from buying the Stuff...they cannot buy it although they are allowed to smoke it.

And that's what Lady Ga Ga just did, after dismissively discarding what appeared to be some Stuff not of ,,Acceptable Quality.''   Goodness forbid that she would smoke something of ,,Inferior Quality.''

http://www.youtube.com/watch?v=3426ahYnoGs

(Click on the Link above to watch Lady Gaga dismissively throwing a Pack to the Side, then choosing a Joint and lighting it up)

Fortunately for some but unfortunately for her, however the Images of her smoking the Stuff that ,,changed her Life'' also managed to make her look rather pathetic.

Maybe she had forgotten her ,,Meat Outfit'' at home.

 

Interesting Argument - Billionaires should be taxed less because taxing them more inhibits their Inclination to make Charitable Donations

An interesting Argument comes from Billionaire Stephen Ross, Chairman of The Related Companies, who is saying, in Effect that a Limitation on the Ability to deduct his Charitable Donations from his Income Tax would influence how much Money he would give to Charities (of his Choice, we might add).

http://bottomline.nbcnews.com/_news/2012/09/23/14016571-tax-hikes-a-threat-to-charitable-giving-say-billionaires?lite


Not all Billionaires agree with this Argument.  However, taking Mr. Ross's Argument ,,ad Absurdum'' would mean that he (and other Billionaires like him), decides on the Distribution of Income, whether it be earned in the Form or Wages or, more likely, through other Sources; how the Part of the Income which is not kept by him (and others like him) is distributed either in Terms of funding Government Expenses or ,,Charities'' of his choosing.

We all are, I think, for reducing of Waste in Government; certainly one Way to accomplish this would have been to keep Congress more Days in Session, more than the 4 Days in August and the 8 Days in September.

However, not all of the 300 Million or so Souls who live in the United States, most likely, not a Majority of them, would agree that 400 or so Billionaires, whose Billions came out of the United States Economy (or elsewhere) but are certainly asseted as Holdings of United States Citizens/Residents, should benefit from lower Tax Rates or unlimited Charitable Deductions, in a Country confronting a catastrophic Budgetary Problem, solely for the Purposes of these Individuals having the Luxury of deciding how to distribute some of their Assets as they please.

Equivalent of $ 1.250,00 per Man, Woman and Child in the United States being handed out MONTLY to Banks and Financial Institutions - this, in Addition to the Money spent for ,,Operation Twist'' and ,,Quantitative Easing''

Dallas Federal Reserve Bank Chairman Richard Fisher expressed Criticism of the Federal Reserve Bank's and Mr. Bernanke's Decision to start a new Round of Bond Buying, without End in Sight, a Move which is the Equivalent of giving out $ 1.250,00 to each Man, Woman and Child in the United States, but with giving this massive Amount of Money only to Financial Institutions which, according to many, have been the Cause of the Economic Woes in the First Place.

http://economywatch.nbcnews.com/_news/2012/09/19/13969468-fed-dissident-says-latest-easing-wont-help-economy?lite

(Reuters)

There has been Criticism from elsewhere, as well.  Some have suggested that Mr. Bernanke does not really have a ,,Strategy'' to deal with the Situation.  One has to keep in Mind, this latest Move comes in Addition to the ,,Quantitative Easing'' and ,,Operation Twist'' being implemented by the former Princeton University Economics Professor.

http://m.welt.de/article.do?id=newsticker/news1/article109346604/US-Notenbanker-Fed-ist-ratlos-im-Kampf-gegen-Krise

(Die Welt)

Interestingly, there has been little Questioning coming from the President and his Opponent, Mr. Romney.

At a Time when the Economic Crisis, call it what you will, we think the Word ,,Crisis'' is still safe (unlike other ugly Words, such as ,,Recession'' or, worse yet, ,,Depression''), with a growing Class of Have Nots and a growing Class of Super Rich and the Middle Class shrinking at an alarming Rate, such Questions should be put on the Agenda for Examination.

 

What is Mr. Bernanke's Rationale for putting at the Disposal of Banks and Financial Institutions the Equivalent of $ 1.250,00 per Month for each Man, Woman and Child living in the United States, for the Foreseeable Future?

Edward Krudy, Reuters, writes:

NEW YORK -- Comparing the Federal Reserve to a rehab clinic offering addicted investors a synthetic high has been a favorite of Wall Street wags ever since the first round of Fed stimulus nearly four years ago. The punch line is that you always need more and more to get the same high and each bout of euphoria is followed by a crashing comedown.

Full Text here:

http://marketday.nbcnews.com/_news/2012/09/16/13868573-stocks-may-calm-as-buzz-from-fed-fades-this-week?lite

 

Spending $ 1.250,00 per Month for every Man, Woman and Child living in the United States

The Federal Reserve Bank has just announced that it will be spending upwards of $ 40 Billion per Month on a Going Forward Basis, for an Indefinite Future, purchasing ,,Mortgages'' from ,,Banks and Financial Institutions.''  This, in the Opinion of the Federal Reserve Bank, is going to stimulate the Economic Recovery in the United States because the Economy has been ,,growing'' according to the Chairman of the Federal Reserve, Mr. Ben Bernanke, at an ,,Unsatisfactory Rate.''

http://www.nytimes.com/2012/09/14/business/economy/fed-announces-new-round-of-bond-buying-to-spur-growth.html?_r=1&nl=todaysheadlines&emc=edit_th_20120914

First of all, it should be noted that a reasonable Assumption would be, the Decision, as ratified by the Federal Reserve Bank is the Brainchild of Mr. Bernanke, who was a Professor of Economics at Princeton University specializing in the 1929-1933 Great Depression.  Mr. Bernanke, we have noted elsewhere in this Column, has just returned from a Conference in Jackson Hole, Wyoming, a Place renowned for its Beauty and known to most Americans from Photographs and Motion Pictures.

http://economywatch.nbcnews.com/_news/2012/09/13/13846702-bernanke-aims-at-job-market-in-latest-bid-to-revive-faltering-recovery?lite

The Stock Market reacted jubilantly to the  Fed's Decision by immediately jumping more than 200 Points to an All Time High.  Some Financial Analysts characterized the Decision as a ,,Sugar Pill for the Stock Market.''  Others, characterized the Short Sightedness of Mr. Bernanke's Decision and the Disconnect which appears to exist between his Area of Academic Specialization and the Decisions which he appears to be making.  It should be noted, this Action comes in the Heels of the Fed's Program of ,,Quantitative Easing'' a Term coined by Mr. Bernanke as well.  The Results of the Quantitative Easing Plan have been described by many as highly questionable in Value.

These Actions could remind one of some of the Words used by former Secretary of the Treasury Henry Paulsen, of Goldman Sachs Fame, who alluded, no, not alluded, emphasized that the Fed had at its Disposal ,,Tools'' (words reminscent of some Kind of an Auto Mechanic or Woodworker's Toolbox) in order to handle Financial Situations.

Those of us who are far less well versed than Mr. Bernanke on Economic Policy Matters can likely make a following simple Arithmetic Calculation:  the Money that the Fed would be giving Banks, in exchange for purchasing Mortgages of Questionable Value (most likely, at full Face Value or possibly even at a Premium - Hey!  It's not easy to spend $ 40 Billion per Month when you've got only one Month to do it!), that Money actually amounts to roughly $ 1.250,00 for every Man, Woman and Child living in the United States, rich or poor, young or old, in one Word, everyone.  Unlike Banks, many of these People would spend their Money, creating Jobs, rather than use them for questionable Financial Investments, Executive Compensation or ,,Conferences'' in Exotic Locales, such as Jackson Hole, Wyoming.

Of course, everyone would have to sign a Promissory Note (at near Zero Interest Rates, as the Banks would be doing) to pay the Money Back and those who can, will, just as the Banks would; those who cannot, will not, just as the Banks would not.

http://www.welt.de/finanzen/article109233809/Boersianer-surfen-auf-Monster-Geldwelle.html

Interestingly, both Presidential Candidates did not express any Concerns or Opposition to Mr. Bernanke's Decision; true, Mr. Bernanke can act independently, without Accountability to the President; however, in the Absence of the Expression of an Opinion by the President or his Opponent, Mr. Bernanke may well take such Silence as a taciturn implicit ,,Carte Blanche'' that his Decision is an appropriate one.  We are wondering if Mr. Bernanke made the Calculation, or Analysis, whether seeking an alternative Method of spending $ 40 Billion Monthly (assuming that such Money should be spent), would not do more to ,,Stimulate the Economy and create Jobs'' rather than a Plan to purchase Mortgages, including potentially worthless Mortgages, from Banks.