2007 Articles Archives

Article-01 The economic forecast for 2007.

Article-02 India Pharmaceuticals - Indian youth are coming to the United States to get advance science degrees and then return to their homeland. A number of American drug companies are shutting down research facilities in this country and are moving them to India and China.

Article-03 Oil and EXXON - The amount of imported oil rose much faster than population growth during the last 33 years. Our government has no national energy strategy. Exxon invested over $1 Billion dollars in a Federal Alternative Energy Project only to have the government renege on their financial commitment. As a result, the project was cancelled.

Article-04 American Debt - Financialization is a process where financial services become the dominant economic, political and social force while the economy takes on excessive amounts of debt. History shows it is a major sign of a first stage of decline to a Banana Republic where concentration of wealth is in the hands of a few.

Article-05 Platform Companies - These are really shell companies that concentrate on technology. The U.S. companies outsource manufacturing activities to Asian suppliers who inherit the volatile risks. The Platform Company in the long-run will lose control of their business when Asia finishes ramping up their R and D.

Article-06 Insurance Companies - Large financial services companies that sell life, auto or casualty insurance participate in Joint Ventures also called Private Equity Funds or Hedge Funds. As few as 50 wealthy investors are involved, and very few of us are in a position to review these investments.

Article-07 Japan's Investments - Japanese companies bought 294 foreign companies, mostly American, last year for a total of $18.1 Billion. They still have over one Trillion U.S. dollars in their reserves due to the fact that most Americans no longer trust goods produced in this country.

Article-08 Venezuela - President Hugo Chavez of Venezuela, strives to transform the Venezuelan economy into the next Cuba. His socialist/communist/populist influence is spreading throughout South America and he is in the process of creating problems for American and other foreign investments in the Andean region.

Article-09 Cash Sweeping - The Financial Services Industry receives hundreds of billions in the form of retirement, investment and other accounts, and you the investors have no clue as to where your money will wind up in the short-run. This complex industry possesses enormous hidden power and earns billions of profit at your expense.

Article-10 High Growth Countries - Growth rates over 7% of Gross Domestic Product produces substantial changes in income and wealth of a country. Some of the countries who are currently experiencing high growth are China, Korea, Malta, Indonesia, Hong Kong, Thailand and Singapore. India

Article-11 Income Inequality - The top Federal Income Tax Rate was 91% after the World War II until 1964 when the rate was reduced to 70%. It has declined to 35% in 2001, yet the consequences of these rate declines have only been recently exposed to the public.

Article-12 False Economic Theory - Information Age jobs here gradually replaced Industrial Age jobs. This monumental error totally misjudged international trade. Guess what? Foreign countries don't want our services! They want our money. International Trade created massive shifts of wealth in a very short period of time.

Article-13 1st Quarter Economic Review

Article-14 Free Trade - It exists in textbooks but not in the real world. Most economists have advocated Free Trade as the way to grow economies and the way to expand wealth to all citizens. Offshoring of jobs is about to take the center stage which will reveal the harsh realities of this failed theory.

Article-15 Chyrsler - DaimlerChrysler Corp. has indicated that it will end their marriage consummated in 1998. They now realize that Chrysler has the same problems as GM and Ford. Chrysler was valued at $35 billion at the time of the merger, Daimler will take maybe $5-7 billion for Chrysler just to get rid of them.

Article-16 Incumbent Party - The Incumbent Party consistently protects their status quo. The Macroeconomic consequences are starting to unfold, one event at a time, and in the aggregate they will go unnoticed by most people. Economics may be boring to many, so they ignore it until they lose their jobs.

Article-17 Mental Health - We live in a prehistoric age regarding mental health care due to many decades of Congressional and Presidential denial and outright obfuscation. Studies show that treatment for mental illness is less costly to society than just ignoring the problems.

Article-18 Inflation - International Trade is rapidly changing the dynamics of inflation because one now must evaluate the effects of external forces as well as the internal forces that help produce inflationary pressures in the economy.

Article-19 Options Backdating - Hundreds of companies have been back-dating stock options. After all, the Board of Directors represents Management, not you the stockholders. They reward their friends as they see fit. You stockholders have lost billions to them.

Article-20 Exchange Rates - One cannot expect the US currency to remain stable in light of an $857 Billion dollar current account deficit in 2006. The U.S. economy is also losing some of its strength through diversity by sending the manufacturing sector to the Asian Big 4 countries.

Article-21 Education and Labor - Education is no longer the hallmark in this society that it once was. SAT tests reached a peak in the 1960's and then declined thereafter. Most young Americans want a better standard of living but they are no longer willing to educate themselves and work for it.

Article-22 Proxy Advisory Firms - They provide guidance to large shareholders, institutional investors, pension funds, mutual funds and other large investors. Most people entrust their personal financial future to these Wall Street money managers, who are getting rich, but the American public is not.

Article-23 Asian and Arab Oil - A new Asian Ministerial Energy Roundtable includes Asian, Middle East and Russia energy ministers from 16 countries. Gulf oil producers are quickly becoming intertwined with Asian manufacturing economies. The United States and Western Europe were not invited.

Article-24 Newspapers - A number of years ago the newspapers were approached by the purveyors of Internet services, who seduced them into posting their daily publications on the Internet for free. Subsequently, subscriptions declined throughout the country.

Article-25 Social Security Meltdown - The utter fiscal mismanagement of the Social Security system should drive us to oust those responsible from power. The government destroyed the fiscal integrity of the system and yet the American public tolerates their fraud and incompetence.

Article-26 2nd Quarter Economic Review

Article-27 Dividends Vs. Buybacks - This year the Standard & Poor list of 500 companies will pay-out a record low 30% of their earnings in the form of dividends. Many management groups prefer to buy-back stock rather than pay a dividend to all stockholders. You lose. The corporations win.

Article-28 Asian Currency Reserves - Finance ministers from 13 nations agreed to set up a regional reserve pool that each country can access in case of a regional currency crisis. This will allow the Asian governments to respond more quickly and with more horsepower to a balance of payments problem

Article-29 Mittal Expansion - Billionaire Indian entrepreneur, Lakshmi Mittal, now controls over 10% of the world's steel. Workers have come to realize that they will lose their jobs if they play the class-warfare games with people like Mittal who will just close the plant.

Article-30 US Money Returns - The American transfer of wealth to the Asian Big 4 countries and the Gulf States to support our current consumption goes on unabated. The new owners of U.S. wealth return it to the U.S. to buy up control of the economy.

Article-31 Chavez Update - Hugo Chavez of Venezuela continues to seize control of private businesses in the name of the people and the government. Government control is beginning to be felt throughout all of the country.

Article-32 Sovereign Wealth Funds - These foreign funds hold Trillions of U.S. dollars and most Americans are not aware of their existence. U.S. trade deficit dollars are returning to this country to buy control of private enterprises in the United States.

Article-33 Favorable Taxes - Favorable tax treatments of stock options are not shown on financial statements given to stockholders which frequently indicate that the company is paying far greater taxes than it really is.

Article-34 Federal Reserve Update - Many economists have questioned their role since Trillions of American dollars are no longer in the banking system but are held by foreign governments due to the enormous U.S. trade deficit.

Article-35 Hi-tech Worker Immigration - We now import over 50% of the PHD candidates for our University doctoral programs. Declining academic standards for American students are driven by lower expectations from our anti-intellectual culture.

Article-36 Federal Budget Deficits - The Federal Budget Deficit is much larger than is reported by the government, yet both political parties are misleading the public into thinking that everything is just fine with government finances.

Article-37 Biofuels - Biologists have been experimenting with grasses and other plants as forms of alternative energy for many years. Almost no one has paid attention to them until recently. The high price of oil is driving the economics of the biofuels industry.

Article-38 US Auto Industry Update - We are consuming our way into poverty by importing too many goods and too much oil. The UAW did not give GM enough concessions to make the company competitive. The American automobile companies are one step closer to bankruptcy.

Article-39 3rd Quarter Economic Review

Article-40 Funding Terrorism - Saudi Arabia with huge U.S. dollars reserves is the largest stockholder in Citibank, NY. Their currency does not float in the open market. The Al Rajhi Bank is the largest Islamic bank in the Kingdom and a source of suspected terrorist funding.

Article-41 Media Macroeconomists - Hundreds of millions of people listen to the emotional and misleading hype of the "Media Macroeconomists" - Journalists, Entertainers, Bloggers and politicians rather than scholars.

Article-42 Pro Sports - They receive subsidies from local, county and state governments in many different forms. In effect, the public is subsidizing the multi-millionaire players and owners, by giving them tax dollars as incentives.

Article-43 Effects of Fed Lowering Interest Rates - The Federal Reserve's lowered the interest rates twice recently. It will affect the economy, but the total fall-out from Greenspan's housing folly won't known be until next year.

Article-44 Progressive Versus Regressive Taxes - The average taxpayer is subsidizing the wealthy in this country by the use of regressive state taxes. Progressive taxes result in fairness and equity and is solely based on "Your ability to pay"

Article-45 Bank Conduits - Wall Street created the Structured Investment Vehicles, or SIV, that owns the sub-prime mortgages and peddles them around the planet. They are also called Conduits and are not on the books of the banks.

Article-46 2050 Forecast - It is difficult to identify all the economic trends that will unfold between now and the year 2050 but nonetheless certain trends are driving the world economy in recognizable paths.

Article-47 Social Security Confusion - This article addresses regressive and progressive taxes. There has been a massive tax burden transfer from income taxes to regressive taxes such as Social Security.

Article-48 Irrational American Consumers - The aggregate micro-economic decisions of consumers impact the Macroeconomy and so with that in mind, we wander into the dark recesses of consumer madness as some would say.

Article-49 Ecuador Economics - This issue address some of the economic issues related to the colorful country of Ecuador with its changing economy and struggle to improve the lot of the people.

Article-50 Housing Credit Market Risk - Credit market risk differs from the stock market risk because stock markets are not financed and no monthly interest payments are required. Credit markets are based on debt, and expand and contract based on policies of the Federal Reserve Board

Article-51 2007 Year-end Economic Review

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