The Unsinkable brian cork™

Brian Patrick Cork is living the Authentic Life

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May15

The Treasury Department has asked the Obama Administration for clearance to control the Derivatives Market.

In a two-page letter sent Wednesday to congressional leaders, Treasury Secretary Timothy Geithner said he wants to create a central electronic-based system that would track the buying and selling of derivatives. He also wants to ensure that financial firms selling the instruments have enough capital on hand in case they default and subject them to stringent standards of conduct and new reporting requirements.

Geithner wrote in his letter:

“All (over-the-counter) derivatives dealers and all other firms whose activities in those markets create large exposures to counterparties should be subject to a robust regime of prudential supervision and regulation.”

[…]

Obviously regulations, control and transparency sound great. However, Wall Street – and, certainly Global finance is most efficient when it’s manipulated and controlled by power mongers brokers and illuminati hand-picked insiders.

Look what a disaster Sarbanse-Oxley has been for the markets.

Seriously.

Wall Street began to second guess itself about the time socialist regulators began to enforce lop-sided audit controls. Sarbanse-Oxley became, literally, it’s own industry over night. Only some of you noticed that, as “options” for inside trading and the dissemination of related information became more difficult, short-sellers were able to step in and confound institutional traders.

Change and rules might be good. But, too much government is not.

The violent, lathe-like spinning of Ayn Rand in her grave threatens to throw the Earth out of its orbit, and hurl us screaming into the sun.”- Nick Milne

Note: I lifted that, in part, from Nick Milne (and, freely admit, changed a few words, and it’s very context) with naught but the best of intentions.

In any event…

Good or bad – and, always depending on where you stand in the equation, our national and the global financial markets have always been manipulated with the plan being steady growth, with most of the profits fueling a multitude of strategies that benefit a relatively select few.

When I am writing about things like this, it always takes me back to when Grandad would talk about “defending the mountains of Hemingway’s Spain”More on that later – maybe.

Obama likely means well (in a sophomoric sort of way). And, many people that support him (for now) were not the beneficiaries of that accumulated wealth and power. However, the system probably can’t work off of Democratic ideals for long (notice how Wall Street can’t get a sustained run going?) and global markets keep looking for excuses to put more authority in the hands of a shrinking number of banks.

This sets the stage for revolution.

Watch how in the next fifteen years key families, their familiars, and other elites work through certain banks (including the sinisterly named Bank of America) to amass wealth, and become more blatant about deploying it strategically.

I don’t know yet if Obama will go down in history as the Anti Christ; there are too many views, (in terms of cultural nuance) to define what that might look like. But, it sort of feels like a significant part of his legacy will be that of having set the stage for anarchy and the foundation for a greater Brazil-like gap between the wealthy and the desperately poor.

Gawd… The irony is almost delicious. It’s the aftertaste that will have me concerned.

To be more clear… What we see happening now appears to be common sense changes to equalize the financial process. But, global finance can’t work that way. The result will be a broken system that can only be righted through financially incentivized leadership.

So, ironically, more rules will result in greater chaos, and set the stage for a power elite that only Thomas Jefferson could have imagined when he designed our Constitution to allow for separatist (like) rules.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

what next America?

January27

As I have already stated on this Blog, 2008 was a financial crisis, affecting mostly “Wall Street.” 

Looking ahead, what can we expect for America?

2009 will be the year “Main Street” gets hit. 

Mind you, 2009 will be awful for A LOT of people.  But, I believe it can be pretty good for some people focused on Best Business Practices, clear thinking, opportunities and having a plan.

But, generally speaking, the damage to the real economy so far is trivial to what will happen over the next two years.  There will be two big stories.

Business bankruptcies

Going into 2007 we knew that our financial sector was unusually strong, well-managed with strong balance sheets.  False!  Going into 2009 we know that our non-financial business sector is well-managed (outside of some weak sectors, like autos), with strong balance sheets.  Expect to be disappointed and astonished yet again.

Triage

That is a VERY scary word.

Everybody wants bailouts.  Worse, the expectation of bailouts means that few preventive measures will be taken.  This referred to as “moral hazard”.  We see this, for example, at work in California – which is already de facto bankrupt.  But, nobody gives an inch.  No lower government spending; no lower government wages; no reduced government employment; and, no higher taxes (there is more; but, you get my drift). 

Why compromise? 

Well… The Federal Government will not let California go broke.  Or the auto companies.  Or the universities.  Or the banks and insurance companies.  Or millions of households (not actually sure about that one yet).

There is not enough money to bailout everybody.  Triage will be necessary.

I have seen this under the worst possible scenarios.  But, you can probably relate to it in terms of what Kate Beckinsale does with lipstick on the foreheads of the wounded at Pearl Harbor (but, it is one of the most gripping scenes in the 2001 movie). 

To wit:

  • Those who will die anyway:  no treatment. 
  • Those who will recover anyway:  no treatment. 
  • Those will will recover only with treatment.

Making these harsh decisions might be President Obama’s greatest challenge. He may have one of the toughest jobs ahead of him since Truman.

Looking beyond the downturn, what can we expect?

The consensus confidently – almost to a man – anticipates inflation, against which the Federal government will fight either successfully (optimists) or unsuccessfully (doomsters). 

This is, however, absurd. 

People are already preparing for this “inevitable” outcome by owning mostly short-term debt.  As the end of the downturn approaches — inflation can only manifest itself in times or full employment or via a currency crisis — everyone will (should) take strong measures.  Even elderly ladies in Peoria will own inflation-protected bonds, short-maturity bonds, and hoard gold bars in their basement.

These measures will foreclose inflation as a workable option.  As the government is forced to either issue vast amounts of short-term debt or monetize the debt, inflation becomes useless as a tool.  Short-term debt becomes an albatross during inflation:  interest expense skyrockets as interest rates soar.

Seriously.

Hyperinflation always remains an option – as does atomic war and mass suicide. 

However, none of these are “solutions” in any meaningful sense.  

Seriously.

With a history of vast deficits behind us, and larger deficits ahead (from baby boomer’s retiring), the government will choose Door #2:  default.  We will just not pay all our obligations.  This is historically the most common solution.

How we decide who to pay — and how much to pay — will test America as it has seldom been tested.

  • Do we pay our foreign debts?
  • To what extent do we renege on promised social security and medicare benefits?
  • To what extent do we raise taxes vs. defaulting?  

The big unknown

The recession of the late 1920’s became a Great Depression due to a series of public policy errors. 

Most seriously:

  1. Many nations abandoned the gold standard too slowly, and
  2. The nation with the largest trade surplus wrecked the world trade system.

America was the culprit (for #2),  enacting the Smoot-Hawley Tariff Act in 1930.  We can only guess at the equivalent of mistake #1, but the prime candidate for #2 is China devaluing the RMB to boost its exports. 

More later.

Remember what Hemingway thought of Spain.  Go read those books.  Spain can be defended.

“Sons Gonna Rise” by Citizen Cope.

Peace to my Brothers and Sisters.

Brian Patrick Cork

Setting the Stage

January24

A core difference between Democrats and Republicans is that Republicans suspect Democrats are closet Socialists (in a general sense).

It occurs to me that Obama’s legacy could be taxes and Welfare.

Extremes.

Consider this article: “Obama’s Tax Plan Is Really a Welfare Plan” by Peter Ferrara.

In addition, I offer you this timely, if not ironic quote (shared with me by Jim Scott):

“You cannot legislate the poor into freedom by legislating the wealthy out of freedom.

What one person receives without working for, another person must work for without receiving.

The government cannot give to anybody anything that the government does not first take from somebody else.

When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation.

You cannot multiply wealth by dividing it.” – Dr. Adrian Rogers /1, (1931 – 2005)

A setting of the stage, if you will.

Thomas Jefferson (see my prior posts: The Jeffersonian Model, Being Jeffersonian, Part I, and (the epic /2Being Jeffersonian, Part II ) would likely frown over this because it falls outside the Democratic ideal.

And, Ayn Rand would have railed as she warned us of this in “The Fountainhead” and “Atlas Shrugged” as they outlined her ideas around Objectivism.

“My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.” – Ayn RandAtlas Shrugged 35th anniversary edition

Peace be to my Brothers and Sisters.

Brian Patrick Cork

_______________________

1/ Adrian Pierce Rogers (September 121931 – November 152005), was an American pastorconservative, author, and a three-term president of the Southern Baptist Convention (1979-1980 and 1986-1988).

2/ I make no apologies.  Love me, love my passion.

Obama can be President with Clinton's permission

February3

It’s been fascinating working within the Democratic camp in an effort to help candidates identify their “relevance as leaders”.

In the business world, we’re schizophrenic about leadership.

We instinctively prize innate leadership. And, although companies, and my role within those companies, are clearly in the leader-creation business, how far does the tolerance for believing that you can grow your skills grow?

Even though America thoroughly enjoyed President Palmer on 24, and might actually believe he should be our next President (work with me here), this country simply isn’t ready for a black President. In fact, the Republicans want Barack Obama to be the Democratice nominee because they know this.

So, I won’t be surprised if Bill Clinton approaches Obama and says something to this affect…

“Listen here my good fellow… Hilary [Clinton] and I (this means the Democratic side of the House and the Senate as well – think future support), are of the (experienced opinion that you need to swing your votes her way. This makes you a proper team player in the Democrats point of view. In return, you get to be this country’s first black Vice President. I will also mentor you for the next eight years – and thus prepare you to be the first black President. This means you could be in office for sixteen years. This also means the world gets to know you as an ’emerging’ leader while you actually get some valid experience, and learn how to manage this country on the international level”.

I just call it like I see it.

Consider one of my earlier Blogs entitled “A Great Bargain”.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

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What’s All This About?

"What am I looking at?", you might wonder.

Lots of stuff.

Meanwhile, here, I discuss events, people and things in our world - and, my (hardly simplistic, albeit inarticulate) views around them.

You'll also learn things about, well, things, like people you need to know about, and information about companies you can't find anywhere else.

So, while I harangue the public in my not so gentle way, you will discover that I am fascinated by all things arcane, curious about those whom appear religious, love music, dabble in politics, loathe the media, value education, still think I am an athlete, and might offer a recipe.

All the while, striving mightily, and daily, to remain a prudent and optimistic gentleman - and, authentic.

brian cork by John Campbell





photos by John Campbell

 

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