To listen to the politicians in Washington, the unemployment problem is well on its way to getting solved. Just like that, the unemployment rate fell to 9.7% from 10% and we only lost 20,000 jobs. As a rule of thumb you never want to fully trust the sound bite that leaves the mouth of a politician. As another rule of thumb, you don’t want to fully believe the headline number that the government is reporting either.

Politicians don’t care how you get to the more positive numbers; they are just going to run with it and call it reality. January’s unemployment numbers are far from reality.

The Drop in the Unemployment Rate

How can you get to a lower unemployment rate with so many people unemployed? It is pretty easy. You just don’t count them. Hundreds of thousands of people have fallen out of the system since they have been unemployed for so long. Then there are the ones who have given up. They are just not being counted. As a result, you get a lower rate.

Seasonality also plays a part. There are a lot of part-time employed workers that are hired depending on the time of the year. For this report, seasonality gave the report a positive bias.

The lower drop in jobs

As we have discussed throughout the year, the government estimates how many jobs were created through the “birth/death” formula. Typically, this adds hundreds of thousands of jobs throughout the year. These aren’t verifiable jobs. These are jobs that the government “assumes” are created from small business. In January they typically revise that number and subtract jobs from the system. These are pretty large revisions. This revision was a job loss of 427,000 jobs for the month. Yet, we only lost 20,000 jobs? Really??

That is the magic of revision. They wait until time has passed and then subtract jobs from past months and even years well after the fact. They will get that figure in there some way. Getting it into the system can happen well after the fact when it will not affect the market. Can you imagine the carnage on Wall Street had they really reported the truth? They will report it when it matters the least.

I am currently reading a very detailed account of all of the financial crises that this country and other countries have faced through the decades. The premise of the book is that it is not different this time and this is not unprecedented. As I get through the book, I will write about it. The authors write that a common thread exists amongst all financial crises. It is the crisis of confidence. Confidence can quickly escalate to crisis levels.

My greatest concern is that this Government continues to sell the American people on a story that does not jive with reality. Confidence could be severely damaged when reality come into full view.

For a good example of this in real time, just watch the implosion of Toyota. You are looking at a car company that has been hiding problems for years. Now that the truth is coming out, there might not be enough confidence left for consumers to want to buy a car that has had a bad sudden acceleration problem. It looks like they really don’t have an answer for it and they are buying time. Well, more on that story at a later date!

Tags: Bob Brooks, financial crisis, Unemployment, unemployment numbers, Wall Street

Is Greece showing us our future? Euro-zone countries Portugal, Italy, Ireland, Spain, and mainly Greece, all appear to be in over their heads with exploding deficits. They basically have more debt than they can service and are in a serious threat of defaulting on that debt. A default of this magnitude definitely affects the United States markets. The good and the bad of the global market place is that we are all tied together. A large default would have ripple effects.

The problem is three fold – First, these governments cannot find buyers for their government bonds. In other words, no one, for obvious reasons, wants to lend them money. Second, even if they were to borrow money it would only be used to make the debt service payments that they are having trouble making today. Finally, and this is the biggest of all concerns, there is no one at the bail-out window to help these countries out. As a global economy, we are all bailed-out. This could very well be the kick-off of round two of the debt crisis.

Are we watching the future of America? After all, we are the biggest debtor country in the world and credit rating agency Moody’s is concerned about our credit rating as a country.

Moody’s said this week that the United States, along with 16 other countries, could lose their Triple-A credit rating if fiscal deficits and heavy debts are not effectively managed.

Which that just raises a few questions for me. First, why do we still have a Triple-A credit rating in the first place? Second, it is only a matter of time as the politicians are showing every day that they are not effectively managing our debt.

This is the problem with a debt crisis. As history will confirm, the only way to solve a debt problem is to pay back the debt or someone loses through default. Printing more money doesn’t fix it. It just adds to it. We should be taking a look at what is happening in Greece and recognize that this is our future unless we drastically make some changes.

Tags: Bob Brooks, debt crisis, Greece, Moody's

I received this PR announcement and wanted to pass it on. This isn’t getting much publicity.

The millions of Americans who have donated money to the earthquake relief efforts underway in Haiti will be able to claim an itemized tax deduction on their 2009 tax returns, when a bill passed by the U.S. House of Representatives and the Senate becomes law.

H.R. 4462 gives taxpayers the option of claiming charitable contributions for relief in Haiti on either their 2009 or 2010 tax returns, so long as the contribution is made before March 1, 2010. In addition, the bill allows taxpayers to use a telephone bill as proof of donations made via a text message.

In the PR announcement, they also warn of scams. As you might expect, there are many that are trying to take advantage of such a tragic situation.

Reputable non-profit organizations such as the International Red Cross, Doctors Without Borders, UNICEF, and The Salvation Army are staging and providing relief to Haiti. All of these organizations have experience in dealing with these types of disasters and are well established with a solid reputation of monetary and volunteer relief that will go directly to Haiti.

Research the Other Organizations Before You Donate:

There are many credible and worthwhile charities that were operating in Haiti before the quake hit that are now in desperate need of financial assistance.

Check the Better Business Bureau site at http://www.bbb.org/us/charity/ for information about the charity’s mission, compensation, expenses, and rating.

Check to see if the charity is a 501(c)(3) organization by visiting this link: http://www.irs.gov/charities/article/0,,id=96136,00.html.

Use an Internet search engine on the charity name to see what news articles may have been published and what the public is saying about it. Has there been an investigation recently on how that particular charity misused funds? Is one charity giving more of their proceeds than another, which could sway your final donation decision? Also, read message boards to find out what others are saying about their experiences with the charity.

Be An Educated Donor:

Do not give out your personal or financial information freely. If you give a credit card number, address, or birth date, you can easily be a victim of identity theft. Do not respond to unsolicited e-mails, since it could be a scam or the e-mail could contain a virus. The safest way to donate is to call an organization and ask what the best way is to donate to it.

The PR announcement said that it would take an estimated $41.5 billion dollars to recover. Take a moment and go to this web-site for some great information www.360financialliteracy.org.

Tags: Bob Brooks, donations, earthquake, Haiti, tax deduction

It was announced that FHA and Fannie Mae are lifting restrictions for individuals who want to flip houses. Flipping houses is the process of taking foreclosures, fixing them up and then selling them to make a quick profit. The biggest downside to flipping houses is getting the financing. Until yesterday, it was tough. Now, house flippers can get financing pretty easy.

In addition, Fannie Mae is giving a 3.5% incentive to those who buy properties from their HomePath properties, that is, foreclosures Fannie now owns.

So think about it for a minute – Let’s say that you have never bought a house before, making you a first time home buyer. First time home buyers get an $8,000 tax credit, 3.5% up-front to deal with closing costs (if they purchase a Fannie Mae foreclosure), the ability to buy a home with a low credit score, and the ability to purchase a home with little down.

Isn’t that what created the foreclosure mess to begin with? Apparently, they haven’t learned from the first and ongoing crisis.

Basically, it is the government encouraging people to be real estate speculators. How about encouraging home ownership instead? How about putting affordable mortgage programs together on these foreclosed homes instead of luring people into real estate investing? What about encouraging home ownership for those who never thought it possible and solving this enormous supply of foreclosures?

Looking into the future, it is my guess that Fannie Mae or FHA will do whatever it takes to unload these properties –that could include financing them for people who really can’t afford them in the first place.

Sounds like another government induced mess.

Tags: Bob Brooks, Fannie Mae, FHA, first time home buyer, Foreclosure, HomePath, real estate

The Dallas Morning News ran an investigative story Sunday that is simply disturbing. It is a story about Dr. Franklin Frisby and the Ambassador for Christ Convention Churches. Dr. Franklin Frisby claims that God has entrusted him with hundreds of billions of dollars. God also instructs him to give out this money to the people who are “dues-paying” members. For $100 to $200 a month, you belong to the lotto of God and receive big bucks because Dr. Frisby has been “anointed.”

According to Dallas Morning News he has pledge to give members $50 million each to fund community projects. He has described how he would pay each project leader $100,000 and cover personal debts with $60,000 thrown in for a car allowance.

The Dallas Morning News describes the program as follows – “Pay your annual membership dues of $100 a year ($200 a year for pastors), submit a project proposal, attend a set number of meetings (where they hit you up for additional tithes and offerings) around the country, then wait to get funded.”

He also warns members that they will need security training to protect themselves once they receive all of the money. He recommends that they get security training from TASC Security and Investigations Inc. of Orlando. Of course, he fails to mention that he is the director of that company.

Other money-making ventures offered by the church include everything from business classes at the church, which he urges people to take, as well as a business that sells honorary degrees.

He has been promising that the money is coming. Of course, darn the luck, the money is tied up and he doesn’t have access to it right now.

This is wrong on so many levels. If God did tell this guy that he is to distribute millions of dollars and he does, then I will be the first to apologize for calling him a scam artist and join his church and become a dues paying member so that I can get my cash (just kidding).

It is absolutely disgusting that people use God as a way to collect money that goes to fund their personal lifestyles versus building the Kingdom of God. Late night TV is littered with individuals preaching the prosperity gospel. I recently received a letter from a televangelist that claimed that he had a formula for prosperity. I should wear this bracelet that he prayed over, do a few other things (I cannot remember), and then send him some money.

Giving is not about what we get in return. God will bless you if you faithfully give. There is no doubt. Keep in mind that blessings come in many forms and sizes and are not always financial. However, it is not the intent of giving to determine that blessing ahead of time nor is it the intent of giving to do so just for the blessing. Giving is about an experience of worship, of relationship, of surrender, and of obedience. Unfortunately, scam artists see the golden opportunity to take advantage of those gullible enough to buy into the lie.

Tags: Ambassador for Christ Convention Churches, blessing, Bob Brooks, Dallas Morning NEws, Dr. Franklin Frisby, Giving, scam artists

“The richest, most powerful nation on earth faces a fiscal tsunami which threatens to overwhelm Government and citizens alike.” – Former Comptroller General of the US, David Walker

I had a great opportunity to interview David Walker this week. Mr. Walker is uniquely qualified to talk about this country’s financial mess as he served as the Comptroller General for the United States between 1998 and 2008. He was the nation’s chief accountability officer and head of the US Government Accountability office or GAO. I have had many authors on the program that have written books about the financial crisis as well as what the future holds.

However none of those authors can give the perspective as Mr. Walker. He was on the inside for 10 years in Washington. He had no party affiliation. He never had to play politics. He was appointed to a 15 year term and never was in jeopardy of losing that appointment. He also was sounding the alarm at the same time and doing something that no one in Washington would dare. He was telling the truth. The above quote was from a speech in 2006 well before the financial crisis even began. He started sounding the alarms in 2005.

Prior to being the Comptroller General, he was a trustee for the Social Security fund. He has really been on the inside. The interview was about his book Comeback America. The good news from his perspective is this is all very fixable. He says that social security is fixable. Deficits are fixable. The uniqueness of this book is that you are getting actual solutions from someone who has been in the numbers and watched the train wreck in Washington develop over a period of 10 years. When he started there were no deficits.

That is the good news. The bad news is that you have to fix Washington and politics. The biggest problem might not be fixable. How do you take the politics out of Washington?

This book is a well rounded book giving you insight into the problems as well as a thorough look at the solutions. I would encourage you to get a copy of this book. If you would like to hear the interview, listen to the podcast here. For more information about the book, you can click here.

Tags: Bob Brooks, Comeback America, Comptroller General, David Walker, Social Security, Washington

I am watching the politicians grill Treasury Secretary Tim Geithner and former Treasury Secretary Hank Paulson with complete disgust. This is only about grandstanding and elevating them above fault. They just cannot understand why they took aggressive measures to bail-out AIG. They just don’t see how this would create further unemployment. One politician asks, “Tell me how what you did saved us from high unemployment?”

Really? Do you really not understand? These are the sane people who are in charge of overseeing the welfare of this country and they have to ask these questions?

In one former grilling about a year ago, one politician had to ask Geithner how the crisis occurred. Are you kidding me?

Once again, Geithner, Paulson, Bernanke etc. are not the problem. They had to clean up the mess that was created due to the lack of attention from the politicians. The politicians did not do their job and turned the other way. It was convenient for them and certainly was a good move for campaign contributions. These politicians are on a witch hunt and determined to find a scapegoat for their responsibility in the financial crisis.

Do they really think that the American people are that stupid? Does President Obama think that the American people are going to think he is doing something by stating he will be freezing spending? When in reality we are talking about saving a few billion dollars. If he wants to do something, he should go back and cut out all of the special interest projects that we the taxpayers are funding.

Remember some of these projects funded by the taxpayer?

• A high speed rail line between Disneyland and Las Vegas – $500 million – This is going to be extremely helpful for the economy. Of all of the people, who can afford to go to Disneyland and go gambling in Vegas? You can thank Senator Reid (who represents Nevada) for that piece of wasteful spending.
• Storm-related repairs to NASA facilities – $50 million
• A jump-start for the domestic lithium-ion industry – $2 billion
• Cleaning out leaking underground storage tank according to the Solid Waste Disposal Act – $200 million
• Benefit for small shipyards in metropolises like Ketchikan, Alaska and Bayou La Batre, Alabama – $100 million
• Wireless and broadband deployment grants – $2.825 billion
• Digital to analog converter box program – $650 million (this is good – I think that everyone should be able to watch American Idol in digital)
• Digital TV coupons – $650 million
• Art projects and activities which preserve jobs in the non-profit arts sector threatened by decline in philanthropy during the economic downturn
• Postponed maintenance on the Smithsonian – $150 million

The sad thing is that this is just a small representation of the irresponsible spending.

Tags: AIG, bail-out, Bernanke, Hank Paulson, irresponsible spending, Obama, Tim Geithner

Could it be that the foreclosure crisis is about to get worse? Let’s take a look at the above chart. The first set of green lines shows the number per quarter of the adjustable rate mortgages that were coming due between 2006 and 2008. These were sub-prime type adjustable rate mortgages. Now look to the right of that big green arch and see the next wave of adjustable rate mortgages that are coming due. This is all of the other types of adjustable rate mortgages coming due.

The problem with the first wave is that the vast majority of the mortgages that went into foreclosure because of the adjusting rates had to do with the homeowner not being able to make the payment. The problem is that when these adjustable rate mortgages “reset” (and the chart is showing you by the 100,000’s of mortgages and when they reset), homeowners have trouble making the larger house payment. Thus they become a foreclosure.

This next wave is much bigger and lasts longer than the sub-prime phase. Plus, unemployment is much worse and more people now owe way more than their house is worth. Today, it is much more socially acceptable to walk away from your house than a few years ago. Will a good percentage of these houses go into foreclosure as the mortgages reset? Well let’s look at the other variable that is becoming a problem.

For many of those who had mortgages reset last year, they enjoyed a lower payment. When their rates adjusted, it went down and positively affected the payment. There is a cost of funds index that is the benchmark that determines whether rates go up or down when mortgages reset.

Between November 2008 and October 2009, that rate plummeted from 3.155 down to 1.259. That changed in November 2009 as the rate shot up from 1.259 to 2.094. If this trend continues, it could spell additional bad news for homeowners.

Tags: adjustable rate mortgages, Foreclosure Crisis, Homeowners, sub-prime, Unemployment

All of the analysts are out this morning describing last week as nothing more than the normal correction that we have been expected. “Don’t panic – this is no big deal.” “It is great to be normal again.” To be fair, everyone who is bearish is calling for this bear market rally to be over and done. So, who is right? Corrections are normal. The fact that we haven’t seen a correction is not normal. So, welcome back to normal stock market activity. At the same time, the charts are potentially showing a change of character in the market that would also support the bearish case.

Every time the market changes direction, you have to look at the catalyst. Unfortunately for the bullish case, the catalyst is Washington intervention and finger pointing. Washington wants to assert control (continued move towards socialism) and wants to point the finger. There were two news items beyond not so hot earning reports that had a negative effect on the markets.

First issue – On Thursday, President Barack Obama proposed new rules designed to restrict the size and activities of the U.S.’s biggest banks, the latest in a series of administration moves to curb Wall Street.

If you think back to last year, they forced all of the investment companies like Goldman Sachs and JP Morgan to be banks so that the Government could give them aid and help protect them from failing. Well there is a price that comes along with that protection and it is called control. Basically President Obama wants to tell banks how big they can be and tell them whether or not they can participate in what is called proprietary trading.

Healthcare was only one of the ingredients of socialism. Nationalization of the banking system is the other. So, we just continue to follow their game plan. Last year they took some major steps in gaining control over the banking system. They performed an unnecessary stress test on the banking system last year in order to tell us (which was not necessary) the banks that were healthy and unhealthy. They also announced a list of problems that might force the government to step and take over.

Well one of those problems is unemployment. The government said that banks might have difficulty in an environment where we had a 10% unemployment rate. Guess what our unemployment rate is today? Yes, technically we are starting to meet the criteria as stated by Washington that would require them to assert control. It makes you wonder if President Obama’s announcement last week was a reenergized effort towards nationalization of the banking system.

As you might imagine, Wall Street wasn’t too happy with the President’s plan to assert control. You can look at the stock market and the moment he stated that he no banks should be allowed to run proprietary trading systems and that he wanted to limit the size of banks, the market fell apart.

This also gives the politicians during an election year the ability to point the finger at those big old bad banks that gave mortgages to people that couldn’t afford them. Those bad banks are the problem and the Obama administration and Congress are going to correct the problem.

Second issue – Members of Congress came out and declared that they would not vote for reappointment of Fed Chairman Ben Bernanke for another term. This is the ultimate in finger pointing. It is real convenient to blame him for the financial crisis and take the spotlight off of their part (the largest part of the blame) in the financial crisis. Not reappointing him would be a grand mistake. These politicians are too interested in their own survival to realize the problems they will create in the markets by not reappointing him.

This is the risk that we run into with the markets. You create problems when Government wants to fix things, assign blame, and start over regulating industry. They don’t regulate when they need to and when they regulate they do it too much.
Politicians should practice preventative medicine to prevent the crisis from happening and never should be allowed to fix anything after it is broken. You just have to look back to the Great Depression to see they same type of effect when they passed the Smoot-Hawley Act which many historians state made the Great Depression much worse.

Once again, we come to the same conclusion. These politicians seem to continue to be the problem.

Tags: Bob Brooks, Goldman Sachs, JP Morgan, Nationalization, Obama, socialism, Stock Market

We have talked many times on the radio show about the real problem that ignited the financial crisis. The financial system was allowed to practice acts of greed and take advantage of an unregulated system. As a result, there are trillions of dollars of losses for which the consumer/investor paid the price.

The politicians in Washington are charged with the duty to monitor these systems to make sure that this type of thing is not occurring. They are charged to write laws that protect consumers from greed and dishonest business practices. Unfortunately, politicians do what works for them politically, which means, they don’t bite the hand that feeds them. If campaign contributions are involved, they turn the other way.

For years they turned the other way and let Wall Street, Credit card companies, and the real estate industry create an enormous mess. If you were paying attention (and they are charged to pay attention) you could see this train wreck coming a mile away.

So, the best way to reform the system is to reform Washington. You do that by taking away the conflict of interest. More needs to be done to diminish the effect of campaign contributions and lobbyists in Washington. One shouldn’t have power, influence, and special favors just because they can write a check. Well, yesterday the Supreme Court made that much easier.

A divided Supreme Court struck down limits on corporate political spending, overturning two precedents in a ruling likely to affect campaigning in the 2010 elections. The 5-4 decision rolls back at least two decades of restrictions on what unions and corporations can spend in elections and frees special interest groups to unleash a flood of advertising to sway the outcome of races close to elections.

Now it appears that corporations can spend freely to get whatever they need from their politicians. It is amazing to me that our highest court just threw gas on the fire.

The most interesting aspect of this Supreme Court decision is the timing. It sure is convenient timing since we have crucial elections in November where it appears the democrats are in trouble. Imagine that……politicians getting a little boost just days after they received the reality check that the November elections might not go their way. Who would have ever imagined that the Supreme Court might also be in the special favor game?

Tags: campaign contributions, financial crisis, lobbyists, Supreme Court

Dr. Denison is a very gifted teacher who has a heart after God. I wanted to share the following commentary with you.

Is God punishing Haiti for worshipping the devil? Pat Robertson claims that Haiti made a pact with Satan for which the island’s 9.7 million inhabitants are now facing the wrath of God. Let’s examine Robertson’s statement in biblical perspective, investigate the historical background behind this alleged pact, and consider the intersection of natural disaster and divine love.

We begin with Robertson’s actual statement : “Something happened a long time ago in Haiti, and people might not want to talk about it. They were under the heel of the French. You know, Napoleon III and whatever. And they got together and swore a pact to the devil. They said, ‘We will serve you if you will get us free from the French.’ True story. And so, the devil said, ‘OK, it’s a deal.’

“And they kicked the French out. You know, the Haitians revolted and got themselves free. But ever since, they have been cursed by one thing after the other. Desperately poor. That island of Hispaniola is one island. It’s cut down the middle. On the one side is Haiti; on the other side is the Dominican Republic. Dominican Republic is prosperous, healthy, full of resorts, et cetera. Haiti is in desperate poverty. Same island. They need to have and we need to pray for them a great turning to God. And out of this tragedy, I’m optimistic something good may come. But right now, we’re helping the suffering people, and the suffering is unimaginable.”

I need to make four biblical responses.

First, God loves the suffering people of Haiti. He cares passionately for the poor and oppressed. His word tells us, “He who is kind to the poor lends to the Lord, and he will reward him for what he has done” (Proverbs 19:17). The Lord said of King Josiah, “He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me?” (Jeremiah 22:16).

The alleged 1791 Haitian pact with the devil would put our Father on the side of slavery and Satan on the side of those seeking freedom. The reverse is actually the case. Satan is a “murderer from the beginning” (John 8:44), a thief who “comes only to steal and kill and destroy” (John 10:10) and seeks to make us “slaves to sin” (Romans 6:17). Satan enslaves—God liberates.

Second, the Haitians are suffering because we are fallen people living on a fallen planet. In the Garden of Eden, this tragedy would not have occurred. In God’s perfect plan there would have been no Hurricane Katrina, no tsunami in southeast Asia, no cancer or heart disease or earthquakes. But when we fell into sin, the entire planet was affected. As a result, “the whole creation has been groaning as in the pains of childbirth right up to the present time” (Romans 8:22). The earthquake is not the Haitians’ fault. God cares for their pain as his own.

Third, God’s people must respond. We are the body of Christ (1 Corinthians 12:12), his hands and feet. He will help the suffering Haitians through us. Give to help the relief effort; go if you can; pray fervently. Don’t speculate on the causes of this crisis—respond personally and practically.

Last, I must state that Robertson’s statement is unbridled audacity. Robert Jeffress, pastor of First Baptist Church in Dallas, said that it is “absolute arrogance” to claim that we can interpret such events as divine judgment (http://abcnews.go.com/GMA/white-house-advisor-valerie-jarrett-speechless-pat-robertson/story?id=9555714). Franklin Graham said that Robertson “must have misspoken” and added, “God loves the people of Haiti.”

As we will see, Robertson should have checked his sources before making his allegation. Scripture calls us to “test everything. Hold on to the good. Avoid every kind of evil” (1 Thessalonians 5:21-22). And he should speak only the truth, in love (Ephesians 4:15).

Christians should pray now for the Haitians, asking God to redeem this horrific tragedy for his glory and their good. A suffering world will believe that God is love (1 John 4:8) when they see his love demonstrated in ours. As my friend Ken Medema says in one of his songs, “Don’t tell me I have a friend in Jesus without showing me first I’ve got a friend in you.”

You can read his Parts 2 and 3 at the web-site – http://www.godissues.org/

Tags: Bob Brooks, Dr. James Denison, freedom, Haiti, Pat Robertson, slavery

It is no secret that Washington has been manipulating the system for years. There is a difference between manipulation of the past and present. In years past, they would manipulate behind closed doors. Today, they do it right in front of your face. America is starting to figure out how bad the manipulation actually has been. For example, conspiracy theorists (myself included) have often thought that Washington has been manipulating the stock market. Over the weekend Barron’s Magazine wrote about a report that a research company named Trim Tabs released. Trim Tabs analyzes the flow of money in and out of the stock market.

Looking at the past 10 months and given the tremendous stock market rally, they have come to one conclusion. Their report was “suggesting the Fed might be goosing stocks because publically observable fund flows seem not to be able to account for the 70% gain since the March bottom.”

In other words, the flow of money into the market does not support such a rise in price. It makes sense that the Fed would buy stocks and help push the market up. People feel better when the stock market is going up (even if it is artificial).

Then there is what happened in the Democrat-controlled state of Massachusetts. A Republican win sends a huge message to Washington. The march towards socialism has hit a big road block. No longer can Democrats control what is happening now that Republicans have the power to filibuster. Now the Democrats are scrambling for cover with re-elections coming up in November.

Finally, things are coming to light. Finally, America is getting a backbone. Just maybe we can get our country back from the politicians, socialists, progressives, etc (whatever your label of choice).

“Socialism only works in two places: Heaven where they don’t need it and hell where they already have it.” -Ronald Reagan

Tags: Bob Brooks, Democrats, FED, manipulation, Ronald Reagan, socialism, Washington

I received a disturbing public relations e-mail from Dr. Jerome Corsi who has been on the show several times. The subject of the e-mail was a news story that was circulating around for a while last year. However, it was more of a mention than anything. Well, the notion of Washington forcing Americans with 401(k) plans and IRAs to give up a portion of their accounts for a guaranteed annuity down the road is surfacing again. Dr. Corsi gives some evidence that the Obama administration might be seriously considering the hijacking of retirement plans in order to get money into the government coffers.

Note: Information from the press release is in bold

Bloomberg reported Friday that Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Mark Iwry are planning to stage a public comment period before implementing regulations that would require private investors to structure IRA and 401(k) accounts into what could amount to a U.S. Treasury debt-backed government annuity.

Spokesmen from both the U.S. Treasury and Department of Labor confirmed that the federal agencies are about to enter a pre-regulation public comment phase on the proposed rule change.

In a nutshell, they would require investors to forfeit a portion of their retirement account for a guaranteed income annuity at retirement. You could refer to it as Social Security II.

On the Department of Labor website, the transcript of a Dec. 9 webchat with Borzi confirms the Employee Benefits Security Administration is about to issue a Request for Information on how annuity lifetime options should be structured into a wide range of defined contribution retirement plans, including 401(k)s.

“Lifetime Income Options,” code words for annuities, are also listed in the Department of Labor’s regulatory agenda for the Employee Benefits Security Administration, issued Dec. 7 and filed in the Federal Register.

Due to all of the losses from the bear market, the Government thinks that investors are not smart enough to handle their own investments and that the Government should help them out. The real truth is that it is a way to raise money for the irresponsible spending and just an additional way to put more dependence on the Government (i.e. socialism).

The Investment Company Institute, a national trade organization representing the mutual fund industry, argues that the distinction of the Obama administration proposal would be to require annuities funded with Treasuries to be embedded within IRAs and 401(k) programs, using the fear of loss as a reason to demand retirement investors own Treasuries.

The Investment Company Institute member companies manage some $11.62 trillion in mutual fund assets for some 90 million mutual fund shareholders, including retirement-oriented investors participating in defined contribution plans such as employer-sponsored 401(k) accounts.

Would the Obama administration really attempt to do something as irresponsible as to force investors to do something against their will? Well, they are doing it with healthcare. Why not with your retirement? We will keep a close eye on this story.

Tags: 401(k) plans, Bob Brooks, Department of Labor, Dr. Jerome Corsi, Obama Administration

I have always had an issue with these Congressional panels that grill executives for “wrong” doing. These politicians insist on being addressed with Mr. or Mrs. and act as if they have been granted special powers and privileges. They act as if they themselves are above and beyond all wrongdoing.

Yesterday is just the latest of one of those circus acts as a Congressional panel grilled Wall Street executives on their “wrong” doing when it came to the financial crisis. This is convenient for the politicians. They get to point the fingers and indict any and everyone except for themselves.

The role of the politicians is simple. They are charged with passing laws and looking out for the general welfare of the United States. Why do we have laws? We have laws to make sure that bad things don’t happen to good people. Laws are passed to protect. So, why aren’t the fingers pointed at the very people who should have passed the laws that should have protected our country from a financial crisis?

My 8 year old could have come to the conclusion that if you loan out a ton of money to people regardless of credit scores, in homes they cannot afford, and with payments that are affordable now but will not be in the future, there will be a problem. Maybe they couldn’t figure out all of the intricate dealings of Wall Street and the risk that went along with the securitization of these loans. However, anyone with common sense could see that this type of activity in the mortgage business was going to end badly. It was a real estate bubble plain and simple. All of the signs were there. If you are charged with passing laws and looking out for the general welfare of people, wouldn’t you be on watch for this type of irresponsibility?

There is no question that Wall Street had a part in the financial crisis. However, the judge and jury we call Congress is just as much to blame as they point fingers. The political system is THE PROBLEM. This three ring circus that these politicians put on for the general public is nothing more than a way to take the light off of their irresponsibility and place the blame elsewhere. Let’s face it….Wall Street in all of their greed is the perfect target.

Tags: blame, Bob Brooks, Congress, politicians, Wall Street

The White House is claiming a victory on the jobs front stating that they “estimate” that the 700 billion dollar plus stimulus program has created 2 million jobs. The White House economist calls it “stunning.” No, really what is “stunning” to me is the way politicians play with numbers as they desperately want us to believe a reality that does not exist.

Let’s take a look at this statement. If I am doling out 700 plus billion dollars of other people’s money, I am going to have a mechanism in place that documents the number of jobs created and have hard numbers to demonstrate without any doubts taxpayer money is not being wasted. The math is pretty easy. There is a certain amount of dollars going to fund a certain number of projects that create an easily documented number of jobs. Unfortunately, that creates problems for politicians for a number of reasons.

First, taxpayers would be reminded of the large amount of money that is being wasted on projects that have nothing to do with solving America’s problem and have everything to do with special favors from politicians that work to get them re-elected. Second, that would be disclosure of too much information and would allow the American people to track what the Government is doing. Finally, estimates are so much more fun to create and make much better political sound-bites, especially when we just lost another 85,000 jobs. The great thing about estimates and political sound-bites is that politicians can appear to actually be doing their job.

Besides, the government comes up with a fantasy number each month in the jobs report. They estimate through a formula how many jobs were created by small businesses that just were not picked up by the Department of Labor. This is called the birth/death ratio. They have “estimated” that roughly 900,000 jobs have been created in 2009 alone. Were those jobs included in the 2 million job estimate or does that now make it closer to 3 million jobs?

I want real information and not fantasy accounting. My concern is that America is going to wake up one morning and realize that things aren’t what they are “estimated” to be.

Tags: Bob Brooks, Department of Labor, Government, job estimates, job numbers, stimulus, White House