Friday, November 27, 2009

Mortgage woes and the economy

From the 30 November 2009 Greater Niagara Newspapers

By Bob Confer

There were a number of factors that contributed to the cause of the Great Recession and none were more significant than the initial round of foreclosures that began in earnest in 2006 and hit their peak in 2008. Those mortgage defaults occurred primarily in California, Nevada, Arizona and Florida where people speculated on primary residences or vacation homes that were way out of their income bracket. A few years into their payments - upon discovering that adjustable-rate mortgages really weren’t in their best interest - they found themselves unable to hold up their end of the bargain, leaving the banks and financial institutions (that were foolish enough to issue and/or buy the incredibly risky loans) with nothing to show for it. Because of that, the financial markets collapsed.

Both parties – the homebuyers and the financiers – were at fault for the lunacy that brought our economy to a standstill. The unfortunate thing is many millions more Americans were affected by the housing gamble. The resulting financial tension and anxiety found in workplaces, state houses and households the nation over, something not seen in such magnitude since the 1930s, has decreased our country’s economic output and caused the job market to spiral out of control.

Those job losses are having a major impact on the progress of recovery and mortgages are, once again, taking a huge hit. Yet, this time, it’s not the homeowners with not-so-humble abodes worth five to ten times their annual income who are losing their homes; it’s those whose mortgages really did make sense and were legitimate investments on behalf of the buyer and the lending institution. It’s the hardworking and fiscally responsible individual who’s unable to pay the bills now, the victim of unfortunate circumstance induced by the personal and corporate greed of others.

This trend began slowly in early 2008 when the recession took off and is now, rather frighteningly, gaining steam. Across the United States, in locales previously unaffected, hundreds of thousands of families are losing their homes or very close to joining the ranks of those who have. Currently, 3.4 percent of all US households (almost 2 million homeowners) are four months or more overdue on their payments. That’s more than double the number of 1 year ago.

Realize, though, that last year’s statistic was made up mostly of the oversized mortgages out West. With those homes mostly out of the picture the new, and higher, statistic represents the run-of-the-mill mortgage. With underemployment and unemployment a combined 17.5 percent, the number of 120-day-plus delinquent homes will rise even more and early indicators show that: 12.4 percent of all households are one month past due, over 4 percentage points more than there were in the third quarter of 2008.

Based on those numbers, and following the trend set by the corrupted mortgages, the “good mortgages” that will reach foreclosure status could easily total - and even exceed - 7 million over the next 2 years considering that 2008’s foreclosure filings (during a slightly stronger economy) were in excess of 3 million.

One can legitimately assume that with no end in sight to the job market woes, this is a very real possibility. As more people become jobless and families go from two-income to one or no income, hard choices must be made on a routine basis. If a breadwinner must choose between feeding his family or paying the mortgage the kids will take precedence over the lender.

While those families worry about their future, and rightly so, those who remain unaffected should think about their future as well, for it’s all interrelated. The pending glut of foreclosures is setting-up the economy for a double-dip, a recession-within-a-recession, if you will. The defaults of 2006 to 2008 caused the financial markets to fail. The defaults of 2009 to 2011 will do the same. If timing holds true to the first round, Wall Street will be reeling quite badly come late 2010 or very early 2011, pushing it, the stock markets and, subsequently, our weakened economy off a cliff.

That disaster will be a repeat of the last four and a half months of 2008, except this one won’t be so easily fixed with our national resources already having been exercised. This will represent a valley – and a deep one at that - amongst many peaks and valleys that will become commonplace in our country’s very, very long road to economic recovery.

Friday, November 20, 2009

Cuomo plays politics

From the 23 November 2009 Greater Niagara Newspapers

By Bob Confer

New Yorkers have long had a love affair with their Attorneys-General. Many of the men who have been the state’s chief legal officer have done great things while in office. With New York City being the financial capital of the world there has never been a lack of activities for them to put under the microscope. This ongoing level of excitement in the realm of public defense has consistently earned them the respect of the average New York resident who typically considers the Attorney-General to be the second most powerful elected official in the state, just behind the Governor.

That same citizen tends to look at the position as something above the political fray. After all, the Attorney-General is supposed to look out for the singular and the collective, the well-being of both the little guy and the state’s citizens as a whole. But, despite those populist trappings, many of the most revered of our attorneys-general have gone on to a higher office, using the position as means to further their careers in government. Martin Van Buren became the eighth President of the United States. Jacob Javitz became a 24-year US Senator. Most recently, Eliot Spitzer went from the attorney’s office directly to the Governor’s mansion.

The current Attorney-General, Andrew Cuomo, is of the breed of those three, a determined man with his eyes on the same office once and temporarily held by his predecessor. But, unlike the men before him – who typically worked independently of Albany’s political machine when in office – Cuomo recently performed his magic in an effort to, at once, appease the people (by tempering an “evil corporation”) and appease the legislature (by helping the state government bailout its worst investment ever).

Earlier this month, Cuomo launched a lawsuit against microchip maker Intel, citing unfair practices in its control over 80 percent of the microprocessor market. Never mind that Intel was operating within reason, using normal practices (like rebates) over the course of business while making a product that was low in price yet high in quality. It was a lawsuit eerily reminiscent of the federal anti-trust suit against Microsoft more than 10 years ago in which Microsoft was wrongly chided for controlling the market when, in reality, it was consumer demand that allowed Microsoft to rule: Microsoft made a product people wanted at a price they were willing to pay. Microsoft’s competitors held a smaller market share for the same reason that Intel’s competitors do. They sell inferior products that their customers don’t want.

With the Microsoft case setting a precedent that Intel felt it couldn’t overcome, the company saved itself billions in penalties by settling out of court with Advanced Micro Devices (AMD) to the tune of $1.2 billion.

That’s obviously the outcome that Cuomo wanted. He couldn't have cared less about the lawsuit and wanted to do everything within his power to help out AMD.

It’s the second time in the past year and a half that our state government has bent over backwards to help AMD. In early 2008, then-senator Joe Bruno (the same fellow who is a defendant in a well-deserved corruption trial) teamed with Governors Spitzer and Paterson to put the finishing touches on a $1.3 billion incentive package for the chipmaker to open a new plant in NY under the guise of “Globalfoundries”. The legislature and Empire State Development cited it as a huge win for NY. Somebody – most everybody, really – didn’t do their homework because it was, more appropriately, a huge gamble for NY.

AMD - whose products rate poorly against Intel’s - has a long track record of bad performance. In the fourth quarter of 2007, just before the economy fell apart, their quarterly losses were $1.772 billion, among the biggest of their 9 consecutive quarters of losses which continues to this day (losses were $128 million for the quarter ending September 30). Numerous reports indicate that AMD will put the settlement towards its $3.7 billion in debt. So, you see, the settlement was NY’s way of guaranteeing its investment.

For the time being, Cuomo’s early Christmas present for AMD will keep the company afloat. But his charity – stolen from the coffers of Intel – coupled with the charity of our legislature –stolen from the taxpayers – show no signs of long-term return. There will be, though, a return on investment for Cuomo himself: By placating the legislature and helping it save face he has gained some powerful friends who will help him on the campaign trail and in the Governor’s office. It reeks of the very collusion he claims to fight.

Friday, November 13, 2009

Dobbs brought down by his opponents

Originally published at the website of the New American on 13 November 2009.

Dobbs brought down by his opponents
By Bob Confer

At press time it’s much too early to know the true reasons why, on November 11, Lou Dobbs unceremoniously left his post as a primetime anchor and analyst on CNN.

Speculation is running rampant, and many people believe that his exit was not of his doing. The common sentiment is that he was forced out by CNN management who were caving-in to the controversy created by his ongoing crusade against illegal immigration. Similarly, he may have decided to end his show to guarantee the safety of him and his family from real threats posed by his detractors.

Either way, it’s a huge victory for the internationalists and Washington’s power brokers who, no matter what side of the aisle they are on, are proponents of broken and open borders. Dobbs had represented the only voice in the television press who rightly addressed America’s failures in securing the border, past, present, and future. Now with him out of the way, they can continue, almost unabated, their drive to assimilate illegal immigrants into the American landscape while, at the same time and through the same methods, chipping away at America’s unique identity and assimilating our nation into the international landscape.

His well-meaning pursuits had left Dobbs a marked man. It was only one month ago that Dobbs’ wife was nearly struck by an assassin’s bullet while at home in rural New Jersey. The bullet missed Mrs. Dobbs by a mere 15 feet. Not surprisingly, mainstream media — like the New York Times — downplayed the incident and reported the attempted murder as a shot at the Dobbs house itself and said the bullet may have only been a stray from a hunter’s gun. Not coincidentally, that nearly deadly attack was preceded by months of threatening phone calls, which came to an end immediately after the gunshot. In a similar vein, a fire had been set on the Dobbs property during the summer.

On his radio show in the weeks that followed, Dobbs attributed the violence and vandalism to supporters of illegal immigration who have dehumanized the commentator. During his October 30 show, he observed, “Fringe ethnocentric groups have been calling for my head, figuratively.” It’s apparent that the miscreants took it quite literally.

If this was not the sole reason for Dobbs’ sudden retirement from 30 years of employment at CNN, it was definitely one of the contributing factors, which no doubt was joined by pressures exerted by the same organizations who may have incited the attacks on the Dobbs family.

First in line to assume responsibility for his departure was none other than Media Matters for America, the left-wing thinktank that prides itself on “comprehensively monitoring, analyzing, and correcting conservative misinformation in the U.S. media” (in other words, providing counterclaims to and nonfactual information against conservative values and practices). By 7:44 p.m. Eastern on November 11 (not even three-quarters of the way through the Lou Dobbs Show), Media Matters sent out a brief news release quoting its president as saying, "For too long, CNN provided Lou Dobbs with its stamp of approval as he pursued a dangerous, one-sided and all too often false conspiracy tinged crusade against immigrants. This is a happy day for all those who care about this nation of immigrants and believe in the power of media to elevate the political discourse."

The following day Media Matters issued a more detailed puff piece that began with this smear: “Since CNN's Lou Dobbs first began spreading false, racially charged conspiracy theories about President Obama's birth certificate in July of this year, Media Matters for America has published 299 research items, video/audio clips, column, and blog posts about his misinformation and hate speech.”

Media Matters, an organization that supposedly prides itself on truthfulness, inaccurately cited Dobbs as the propagator of what became known as the “Birther Movement”. While on CNN he never theorized that the President may not have been born in the United States. Instead, he only covered and reported on the various people and organizations that were pursuing the possible conspiracy. Even CNN’s president Jonathan Klein, who was often at odds with Dobbs, verified that Dobbs' coverage was "all about the phenomenon of doubters."

But that was only part of Media Matters message. Throughout the follow-up article, beyond just the hateful opening assault, they alleged that Dobbs is “racially-charged” and exudes “hate speech.” By doing so, Media Matters is guilty of inane hyperbole, crass manipulation, and the same narrow-mindedness they claim to battle.

Media Matters claimed that Dobbs lost his job because he discussed illegal immigration far too often (isn’t this a direct result of other news sources failing to cover this subject?), incited hate groups (aren’t hate groups guilty of threatening his family?), hosted “too many” conservatives (where is the uproar over CNN’s Situation Room hosting too many liberals?), and cited Mexico as an enemy (isn’t it they who have silently invaded our country?). The organization went so far as to marginalize one of Dobbs’ other crusades (and, just like illegal immigration, also a crusade of liberty-loving organizations like the John Birch Society), his attempt to shine light on the North American Union. Media Matters called his assessment a “wild conspiracy theory,” rather than addressing the reality of this threat on American sovereignty.

Media Matters chose to pat itself on the back for the collapse of the Lou Dobbs Show. The organization admitted it took a lead role in the Drop Dobbs Coalition ( and worked behind the scenes with major corporations to stop advertising during his television show. They also claimed success via ads that ran on opposing cable networks, calling for Dobbs to “be held accountable.” They also bragged of the nearly quarter million hits that their anti-Dobbs ads and videos received on a variety of websites.

That very same day, Media Matters’ cheers were joined by those of the hate group National Council of La Raza, which is known for promoting illegal immigration and amnesty while putting the Latino race above all others. Their press release predictably said they hoped “this resignation begins to undo the climate of intolerance fostered against the Latino community, restore journalistic integrity to the CNN brand, and bring civility and truth back to the immigration debate.” Those words are spun in such a way to identify as racists all who want our broken borders fixed or insist on bringing truth to the subject.

Ironically, the CNN brand will lose — not restore — its journalistic integrity through what was probably a forced resignation by Lou Dobbs. By succumbing to naysayers who may not agree with his legal and practical approach to the hot-button issue of illegal immigration, CNN is allowing only one side (the illegal and impractical side) of the argument to take over. That is a horrible situation not only for political discourse in America, but for the future sovereignty and safety of our people. Unchecked, illegal immigration and its horrible outcomes will persist until America reaches its breaking point.

Thursday, November 12, 2009

Concerns for the H1N1 vaccine

From the 16 November 2009 Greater Niagara Newspapers

By Bob Confer

Due to fears perpetuated by governments and news media the world over, people have been lining up in droves to be vaccinated against H1N1. This mass hysteria has created a demand for shots so vast that shortages of the vaccine have become the norm. In a recent briefing to the members of the House Appropriations Committee, Thomas Frieden, director of the Center for Disease Control, said there are only 32.3 million doses of the vaccine available for 159 million people who are of the highest risk to catch the swine flu. Basically, 4 out of every 5 of those who the government thinks should be vaccinated can’t be.

With supply and demand having become so imbalanced, especially for something deemed crucial to the national well-being, manufacturers are being driven by capitalism and pressed by public authorities to produce as much vaccine as they can in the shortest amount of time possible. That has led, internationally, – and could lead, nationally, – to the introduction of vaccines into the marketplace that have questionable, if not incredibly damaging, attributes.

One of the biggest concerns over mass vaccination campaigns is focused on the use of adjuvants. Adjuvants are additives to vaccines that heighten the body’s reaction to the vaccine, meaning less of the antigen can be used and, therefore, more doses can be created from available resources. Basically, the introduction of an adjuvant would allow large-scale production of the H1N1 vaccine that would double the traditional output and come closer to satisfying the current demand.

The World Health Organization strongly supports the use of adjuvants and most nations, including the Asian powers, the European Union and Canada, are administering shots which posses an adjuvant called squalene. Squalene is a naturally occurring organic compound that is commercially derived from shark oils.

Many scientists believe that not everyone can properly accept squalene and many peoples’ immune systems will attack the oil and, in turn, create an autoimmune disease. Numerous studies performed on lab rats have shown that squalene can lead to debilitating long-term illnesses like rheumatoid arthritis in which your body attacks its own tissues.

Squalene has long been in and out of the news. Many people who served in the military during Desert Shield/Desert Storm or have loved ones who did will recognize it as one of the probable causes of Gulf War Syndrome. Many people believe that the syndrome – which brings with it a wide range of symptoms from fatigue to memory problems to insulin resistance – was brought on by experimental Anthrax vaccines (with squalene as the adjuvant) that were administered to the armed forces in the Gulf War of the early 1990s. According to studies conducted by the Tulane Medical School more than 95% of GWS sufferers showed antibodies to squalene while veterans who were of good health exhibited no antibodies to the adjuvant. The study has since been criticized and marginalized by the Department of Defense but many scientists and the countless soldiers whose lives have been affected by GWS cite the Department’s findings in contrast to be a self-serving means to save its hierarchy and bureaucracy from the disgrace that comes with having potentially poisoned your own people.

Squalene was added to the Anthrax vaccine for the sake of convenience. It allowed the US military to quickly and, in their eyes, effectively deliver to the troops much-needed protection against the deadly biological agent. Many people fear that same mindset will be applied to the current influenza crisis and the United States government will join the international community in promoting squalene-spiked H1N1 shots.

At this time, the government has not allowed such shots to be distributed in the states because the H1N1 adjuvant is, unlike other adjuvants, not licensed in America. In a recent interview with PBS’s Newshour, Bruce Gellin, director of the National Vaccine Program said the Food and Drug Administration could have issued an Emergency Use Authorization which would have side-stepped the licensing process. The FDA chose not to for the time being. But, there exists the very real possibility that it might in the coming weeks with the demand for the flu vaccine so great and urgent.

So, as it stands, Americans have the luxury of consuming the safest of the H1N1 vaccines (at least in the squalene department). Unlike other countries we have not gambled on the long-term health of our citizens. Ten or twenty years from now, given the scientific evidence holds true, the rest of the world will see an unusual increase in the cases of arthritis and diseases which mirror GWS. Our populace will be free of that anomaly given that the Obama Administration does not cave-in to anxiety and allow the use of the disabling additive.

Friday, November 6, 2009

The cost of cap and trade: part two

From the 09 November 2009 Greater Niagara Newspapers
By Bob Confer

Opponents of cap and trade routinely call the legislation a “job killer.” When nondescript talking points like that get thrown around it’s impossible to make a case for the denial of the bill’s passage. One really needs to qualify and quantify such a statement. Once that is done, it’s very easy, almost too easy, to show how flawed the federal government’s newest idea for taxation and control truly is.

It doesn’t matter if you start at the low end or the high end of the spectrum when it comes to estimating the impact. In last week’s column I mentioned that the Congressional Budget Office estimates the cost to households to be $175 per year in direct energy costs while the Heritage Foundation puts the value closer to $1,500. My company (an average small business employing some 130 people), for example, uses as much energy as 800 homes. Under the CBO’s numbers we’d be paying an extra $140,000 per year in energy costs (a 15 percent increase). Applying the Heritage Foundation’s calculations, we’d be paying an extra $1.2 million every year. Our annual electrical costs are “only” a million dollars now. This would not go unnoticed because neither number - the large or the small - is a pittance. They are significant in all respects.

This is only the tip of the iceberg. Energy is our third-largest cost behind material and labor. The former would rise as well, at a rate of 50 percent or more, because all of the US-based companies that extract natural gas from the earth and transform it to plastic pellets will be saddled with the same odious taxes. When you the consumer buys any product that’s made of plastic – whether it’s one of our durable goods or another company’s disposable commodities – most of what you’re paying on the base cost is to cover the material itself.

Such an all-encompassing increase in expenses would make it extremely difficult if not impossible for Confer Plastics to compete in the marketplace and maintain its customer base. Product prices would rise by a factor of one-half. At that rate, we would lose customers and revenues and be forced to let-go our coworkers. We’re just one of thousands of US manufacturers, large and small and across multiple industries, that would be forced into such an uncomfortable situation. American manufacturing communities would become ghost towns.

When such a thought is broached, pro-cap and trade Congressmen and green activists offer a knee-jerk reaction. They usually say that such a line of thinking is nonsense because all manufacturers would have to increase the price of their goods at the same rate so we’d all be competing on the same level playing field.

That’s a misguided and backwoods way of looking at the modern business world. The cap and traders are living in the 1950s if they think manufacturing begins and ends in the United States. In a hypocritical fashion, those who say they’re looking out for the greater global good are patently oblivious to the fact that we’re living in a global economy. That said, if cap and trade were passed, the exodus of manufacturing jobs to Asia and Mexico would go into overdrive because none of those nations will be forcing their businesses to follow anything even remotely similar to our ridiculously-strict rules.

American companies already have a competitive disadvantage of 22 percent (before labor) versus competitors from our country’s 9 largest trading partners. So, it’s a no-brainer: We must overlook the altruistic pursuits of cap and trade and focus on the realistic outcome of the legislation. It would extend our nation’s jobless recovery from the current recession (which could take 15 years without cap and trade) by stifling development in the private sector, which, in conjunction with other government failures (the impending collapses of Social Security and Medicare) would force a Depression that will make this recession look like a walk in the park.