This has been one of those
weeks where it's difficult to
know where to begin?  There
have been so many gaffs,
idiocies and outright outrages
from the Obama Administra-
tion and Washington, DC in
general.

We start with another whirl-
wind of media appearances
which range from bad taste
to border-line sadistic.  Our
Kenyan-In-Chief, not content
with abusing handicapped
children, saw fit to go on CBS
"60 Minutes" and giggle his
way through the economic
crisis.  Then, on Tuesday,
we are given another show-
conference which proves once
again how boring Obama is
without his teleprompter.

If all that wasn't enough, it
never seems to be of late,
Tim, "Turbo Tax" Geithner
took us on a merry-go-round
of power-grabs and excuses.
He even managed to slam
the US dollar.  Not to be out-
done, Hillary Clinton then goes
to Mexico and blames America
for all of their problems.  Then
she begs the North Koreans
on national television to give us
a phone call when they're not
too busy!  LOL!

Even Nancy Polesi and Harry
Reid got into the act.  Nancy
proclaimed that illegal immi-
grants are patriotic Americans.
Senator Reid decided to call
a justice of the Supreme Court
a liar and a fraud.  The GOP
leadership stumbled about as
well, attempting to deliver an
outline of a counter to the
Obama budget.

If it weren't for the fact that our
nation is at stake in all of this
Tom Foolery, our very liberty
and sovereignty, I'd say that
the whole week would have
made a good chapter in a
fictional book.  Maybe even
a comdey film by the Zucker
brothers?

But alas, it's all too real and
not very funny at all.  It seems
that for any sanity, we must
look overseas for rational
thinking.  Czech Republic
Prime Minister, Mirek
Topolanek, told the European
Parliment that Obama's
stimulus program is
"dangerous"!

"Not only is America repeat-
ing its mistakes from the
1930s - the large-scale stimuli,
the protectionist tendencies
and appeals, the "Buy Ameri-
can" campaign... - all these
steps, their combination and,
worse, the initiative to establish
them as permanent, are a
ROAD TO HELL."

Topolanek, who is the current
President of the European
Union, was not the only voice
at the Parliment meeting in
Strasbourg, France.  The UK
member from Southeastern
England, Daniel Hannan, also
spoke out against the spend-
and-borrow-your-way-out-of-
recession concept.  Hannan
chastised British PM Gordon
Brown, who's bank bail out
program was copied by the
U.S.A.,  for Brown's reckless
destruction of the British
Pound, which has lost 30%
of it's value in the past year.

Global critics of Obama's
stimulus/recovery/socialist
agenda are piling up fast.
China, Russia, Brazil, even
Venezuela and Zimbabwe,
have made comments this
week.  So much for Obama
repairing our image to the
world.  The sorted truth is
that all of them are holding
US dollars and Treasury
bonds, which are threatened
to lose substantial value as
Obama plans to expand the
National Debt, doubling in
five years.  Imagine that! In
just five short years, Obama
will pile up more debt than
every single president, from
George Washington to G.W.
Bush did in 218 years!  And
people wonder why I am
befuddled and worried???

Our Congress shares much of
the blame, as they are all too
happy to go along for the ride,
slipping in their pork barrel pro-
jects where they can.  Regard-
less of who think is to blame
for it all (I'll deal with that one
next time), the fact remains
that somebody needs to put
on the brakes NOW!

Amazingly, even before the
last rounds of stimulus and
government spending bills
have mailed out any checks,
the economy seems to be
doing a bit better.  Home sales
were up in February.  Consum-
er spending was up.  Durable
goods sales were up.  Even
the Dow Jones seems to have
bottomed out for the time
being and is recovering.

Soooo, MAYBE, just maybe,
we do not need to transform
America into a Socialist heaven
on Earth?  Maybe we can skip
the further nationalization of
our economy.  Heck, most of
the banks who got TARP
money want to give it back
now.  So I say let's cool it on
the further expansion of gov-
ernment.  No national health
care schemes.  No giving the
Treasury any more power.
And somebody PLEASE tell
the Federal Reserve to shut
down the printing presses!

We've already gone through
nearly eight months of this
nonsense.  It won't hurt us to
put everything on hold for six
months and see what happens.
Continuing at break-neck
speed towards Socialism will
hurt us.  Even if we get some
short-term relief from Obama's
plan, the long-term monetary
crisis will make everything that
has happened thus far seem
like a picnic.

If you haven't heard that insur-
ance giant, AIG, has paid out
some $165 Million dollars in
bonuses to some 400 execs,
then you must be in a coma.
All the media is in a stir as out-
raged Congressmen and pun-
dits comment.  How could a
company which U.S. taxpayers
bailed out, to the tune of about
$170 BILLION dollars do such
a thing?  

Of course, this is the same
bunch that after they got $85
Billion from the government,
did a spa weekend for $440,000
and sent a couple
execs to England for a holiday
at a cost of $66,000.  Well,
the gross were in season
don't ya know?

The outrage is silly, as the
same Congressmen who are
now complaining were the
ones who gave AIG the cash
with few strings attached. In
fact, it was Senator Chris Dodd
of CT who got an amendment
to permit bonus payments
added to the TARP law.  BTW,
Dodd had received some
$103,100 in campaign contri-
butions from AIG execs in
2008's election cycle.  Nice,
huh?  Talk about getting a
return on your investment!

Some now question whether
we should have bailed out
AIG in the first place.  Why
did we?  Let us set the 'way-
back' machine to Oct '07,
and look at our old friend,
the Credit Default Swap (CDS).

A CDS is basically a bet made
by two parties on whether or
not a company will default on
their bonds.  Companies sell
bonds all the time to raise
needed capital, usually paying
a much higher interest rate
than government issued bonds.
This is all fine and well *IF*
the company selling the bonds
has a good track record on
paying off bonds and happens
to also be making money.

Let us say that you run a
mutual fund and want a
position in a certain company,
but their stock is kind of high.
So you buy some stock and
you then buy some bonds
from that company.  Such
companies will put up their
assets as security for their
bonds, often in the company's
own holdings of their stock.

Any investment involves a
certain amount of 'RISK'.
Maybe the company is part
of a 'soft market'.  So, you buy
some bonds, but to play it
safe, you acquire a CDS from
a another firm, most likely a
hedge fund OR an insurance
company, like AIG.  The CDS
itself now also becomes part
of your fund's portfolio.

The CDS market exploded
in the late '90s like many
other exotic investment in-
struments, such as derivatives.
All of these are essentially
'side-bets'.  In 2000, the CDS
market was a mere $900
Billion dollars world-wide. By
January 2007, it was $50
Trillion!

One of the more popular types
of CDS were those covering
potential defaults of mortgages,
bundled into 'tranches' and
traded worldwide.  AIG's posi-
tion on mortgage related CDS
was is estimated at about
$75 Billion.  By June of 2008,
the actual value of the tranches
dropped to about $60 Billion
thanks to the housing bubble.
AIG's overall position in CDS
of all types is estimated at
around $300 Billion, mostly
to Asian and European banks
and investment groups.

So, this explains why after we
taxpayers have given AIG
$170 Billion dollars, they are
still struggling and basically
broke.  AIG is a sieve for cash,
with them having to pay off
many others who bought these
exotic instruments.  This also
leads us to why we bailed them
out in the first place.

As the housing bubble was
straining the credit market, the
value of all CDS assets was
declining.  The collapse of
Lehman Brothers is the per-
fect example.  When former
Treasury Secretary, Hank
Paulson, auctioned off their
CDS paper, the market only
paid about 9 cents on a dollar
for them.  In other words,
CDS is not a good bet for the
one issuing it.

It's also not a good asset to
hold or trade.  During better
times, CDS paper was traded
heavily.  It could easily move
through several sets of owners
on the same day.  AIG's CDS
exposure being at $300 Billion
meant that multiple entities
were also at risk whether they
still or even had held them at
some point.  $300 Billion in
bad CDS paper could easily
translate quickly into $3
Trillion dollars of lost wealth
on the accounts of many
investment firms.

The ones who would suffer
the most would be those
pension funds and other
publicly held groups that de-
pended on their cache of
CDS to firm up their account-
ing books.  Had AIG been
allowed to collapse like
Lehman, the ripple effect
would have crashed many
more companies around
the world, plus here at
home in the U.S.A..

I suspect that at some time
in late August or so, Paulson
and Fed Chairman Ben
Bernanke must have figured
that the housing/credit crunch
could be fixed quickly with a
massive infusion of cash.
But after the Lehman auction,
their view on the situation
changed fundamentally.  They
were now staring into an abyss
of a hyper-leveraged monetary
crisis.  Shoveling cash into
the abyss in hopes of restoring
confidence seems to be their
only solution.

And confidence is the key to
the whole game, as none of
these investment instruments,
not even our U.S. dollar, has
any real value!  The financial
house of cards has been build-
ing since Dec 24th, 1913, when
Congress abdicated it's power
to print money to the private
bank that is the Federal Re-
serve.  We now live in a world
who's total GDP is about
$60 Trillion dollars, and who's
holdings in actual, physical
assets is around double that.

But the overwhelming majority
of 'wealth' is focused in the
whole range of exotic assets,
such as CDS and derivatives.
Estimates, and that's about
all we can get are estimates
since these investments are
largely unregulated and de-
finitely over-valued, is any-
where between $400 Trillion
to an astounding Quadrillion
dollars!!!  We're barely able
to comprehend a Trillion dol-
lars, let alone a Quadrillion.

This is the problem we face
now.  Investors do not like
uncertainty, although all
investments have risk. And
it's made worse by the fact
that nobody really knows
just how much digital wealth
there truly is being played
with in the world.  The only
plan available for now is to
keep people playing.  So
when AIG or Fannie Mae
or somebody else comes to
Washington with their hat
in their hand, the odds are
they'll get bailed out.

The danger, of course, is
that at some point, the
music stops, and the all
of that cash we've been
shoveling comes back in
the form of inflation, and
higher taxes.  This latest
financial crisis of the past
few months may seem
like a picnic compared to
the Great Day of Reckoning
ahead!

CNBC host of "Mad Money",
Jim Cramer, has become a
man symbolizing change.
A supporter of Obama during
the election, Cramer believed
that Obama would bring about
change and hope for the coun-
try.  He even said on his cable
TV show that if McCain won
the election, America would
enter an economic depression.

All of that has reversed, as
Cramer has seen the truth and
folly of his ways.  After only a
few short weeks of 'lightning
round' pronouncements and
legislation, Cramer now calls
Obama "the most wealth-de-
stroying president in history".
This remark has even earned
Cramer a spot on the White
House enemies list along with
Rush Limbaugh and fellow
CNBC analyst, Rick Santelli.

Had Cramer read either Alexis
de Tocqueville or Ayn Rand,
he would have known what he
was getting into last spring.
Tyranny always targets the
productive, the creative, the
clever and the ambitious first.
This is the nature of those
who seek power, control and
corruption.

What Socialists like Obama
always fail to understand is
that jobs, REAL JOBS, are
only created by healthy, grow-
ing businesses.  Such require
a fertile environment to suc-
ceed.  A field of low taxes and
modest restrictions.  What
Obama has done in the past
few weeks is plow tons of salt
into the soil of free enterprise.

Instead of focusing his efforts
on tackling the true problems
of the moment, such as the
lack of credit from the banks
and the toxic assets and bad
mortgages they hold, Obama
has used the financial crisis
to launch an agenda of
Socialism.

Cap and Trade Carbon Tax
to restrict and make our energy
production more expensive.
Expansion of a failed education
system, favoring the teacher
unions and bureaucracies.
This week he launched plans
for universal health care, a
system which has failed in
every country which has tried
it already.  Obama has com-
mitted the American taxpayer
to footing some $20 TRILLION
dollars of future debt to pay for
his schemes.

He did unveil a plan to deal
with bad mortgages, of which
there are some 5.4 million now.
But Obama's $75 Billion dollar
bailout is expected to, at best,
only help around 12% of them
who may qualify.  A far cry from
the $300 Billion which McCain
had proposed during the cam-
paign which would have re-
valued all of the bad mortgages
to realistic, current values.

The end results of Obama's
assault on Capitalism are a
credit market still frozen, an
unemployment rate of 8.1%
and growing, a stock market
which has lost 30% of it's
value since he took office,
and the specter of the FDIC
facing insolvency within the
next six months as banks
fail or cannot afford prohi-
bitive assessment fees.

The Obama White House
has tried to spin the facts.
They claim that the Dow Jones
is merely an opinion poll, not
a gauge showing $2 Trillion
dollars worth of wealth lost
in the past 6 weeks, effecting
the savings of 2/3 of the aver-
age Americans.  They say that
small business is not an engine
of job creation, despite the
facts that 27.2 million people,
50.2% of America's work force,
are employed by small busi-
nesses.  That in the past year,
97% of all new jobs were cre-
ated by companies with 20 or
fewer employees, including
40% of all high-tech jobs.

Jim Cramer should have seen
the handwriting on the wall
when Obama told Joe the
Plumber that he had no right
to pursue the American dream.
That Joe was obligated to
fork-over the fruits of his labor
to the government, since only
Washington DC knows best
how to spend the money.  Joe
simply is not smart enough
to create jobs, certainly not as
smart as Tim 'Turbo-Tax'
Geithner!  Only the elite of
Washington know best how
to spread the wealth around!

Cramer may face more trouble,
as he is employed by General
Electric, which owns NBC,
CNBC and MSNBC, all of
which lean heavily to the left
and support the Obama agen-
da.  You just know how wise
the management at GE is,
they've only lost about 80%
of their equity in the last 12
months.  LOL!  Serves them
right!  I'm sure if Cramer
writes a good resume, he may
get a job at the Fox Business
Network.

Pretty clever title, huh?  Am I
good at these or what?  Some-
body ought to pay me for this.
LOL!

The Oracle of Omaha, the
CEO of Berkshire Hathaway,
Warren Buffet, has thrown a
potential wrench into the
Obama economic plan. In
a letter to shareholders, he
gave some bad news and
even worse, some harsh
opinions.  Berkshire's profit
margin for 2008 was down
some 62%.  He expects that
2009 will not be much better.
He sees no sign that the
economy will recover any
time soon.

Buffet wrote that the Federal
Reserve and U.S. Treasury
have done all they can.  In
fact, Buffet warns that the
next 'bubble' that may burst
could be Treasury bonds.
With so many investors run-
ning to T-bills for safety,
they will pay less and less
return as their interest rates
decline.  Buffet, himself, has
begun moving away from
bonds to equity shares.

Buffet is clearly concerned
of the specter of inflation
caused by the government's
massive spending.  Plus,
the fact that the Fed has been
shoveling out cash as fast as
it can print it.  Nobody really
knows just how much cash
the Fed has doled out since
January '08.  The estimates
range from $4 Trillion to $9
Trillion dollars.  Quite the
spread, huh?  At the CPAC
meeting last week, former
presidential candidate, Rep.
Ron Paul, the most indepen-
dent member of the Congress,
announced his bill demanding
that the Federal Reserve be
audited.  I shutter at what a
truly honest, objective exa-
mination of their books
might reveal.

Buffet announced in his
letter on Saturday that he
lost around $5 Billion dollars.
Berkshire lost over $11.5
Billion.  He was also very
critical of the housing and
hedge fund markets as
well.  The Oracle calls for
both lenders and borrowers
to act more responsibly.  
He blames the hedge funds
for much of the losses at
Berkshire, resulting from
derivative selling of junk
bonds sold by the companies
Berkshire owns.

Having been an advisor to
Obama, you'd think that
Buffet would be more help-
ful to Obama's economic
plans.  But in warning of a
probable "onslaught of in-
flation", Buffet is now at odds
with Obama over all of the
government's plans for new
spending.  Buffet says that
the economy is the worst
he's seen in 44 years and
may not recover till "well
beyond" 2009.  

"Economic medicine that was
previously meted out by the
cupful has recently been
dispenced by the barrel.",
writes Buffet.  "These once
unthinkable dosages will
almost certainly bring on
unwelcome after-effects.
Their precise nature is any-
one's guess, though one
likely consequence is an
onslaught of inflation."

Meanwhile, the stock market
loss nearly another 300 points
today, following more bad
news.  AIG got another $30
Billion from Uncle Sugar
after announcing that it lost
more than $60 Billion during
the 4th quarter of 2008.  It
lost more money than any
single business in the history
of mankind!

Across 'the pond', in Europe,
bad news was the soup du
jour as a plan to bailout
Eastern European nations
came to a screeching halt.
Austrian banks are especially
at risk.  Germany is also putting
pressure keeping the Euro
healthy, which lost value today.
The current crisis is now strain-
ing the foundation of the
European Union.  With the
Eastern countries declining
rapidly, and others like Spain,
Ireland and Italy bleeding,
cracks in the common market
and currency are growing.
France and Germany are at
odds with each other as to
managing the crisis.  They
still have the economic assets
to assist the EU, but both are
lacking the political will to do
so.  Britian's PM, Gordon
Brown is looking beyond them
and is now seeking a global
plan to share the burdens.