MONEY MATTERS

From the musical South Pacific,

This Nearly Was Mine

One dream in my heart, one love to
be livin' for,
This promise of paradise,
this nearly was mine.

Close to my heart he came,
only to fly away.
Only to fly as day,
flies from moonlight.

The promise of home ownership was hopeless for people with shaky financial history, until about ten years ago. The mortgage industry started lending to sub prime, poor credit risk, candidates. Last year they were 20% of the market.

Mortgage lenders became creative. Low or no down payment, low interest rates in the early years of the mortgage and ballooning rates and payments in later years; brought in less qualified home buyers. Speculators came into the housing market. If payments could not be maintained after the initial low interest period, the lender would foreclose and resell the house. When values were going up, it was lovely.

This year the housing market has been in decline. Lawsuits, defaults, delinquencies, foreclosures and bankruptcies are soaring. Sub prime loans have vanished.

Barney Frank heads the House subcommittee that oversees financial institutions. He is calling executives from sub prime lending firms to testify before Congress. Frank called sub prime lending "predatory"; and opined that any company that ever touched a sub prime loan should be held legally liable if a homeowner defaults.

The Trial Lawyers of America (recent name change to American Association for Justice) got so excited that they dropped the soap in Boston Barney's shower. Trial lawyers won't go after bankrupted mortgage lenders; they will go to deep pocketed investment bankers. Lehman Brothers recently had a judgment against them in a sub prime class action suit.

This is the start of something big. A wave of hearings and subpoenas will soon flood the main stream media. Be certain that the democrat congress will be slipping earmark legislation into bills that make it easier for the tort bar to sue.

Barney and his band missed opportunities to scrutinize the mortgage industry while sub prime loans were being marketed. Now they are looking for scapegoats. Christopher Dodd, democrat Presidential hopeful, said that he is considering legislation to "protect consumers from abusive lending practices and to help consumers who have been harmed to maintain their homes." Guess he's in the shower with Barney, too.

Folks with shaky credit can join in this song of lament.

I'll keep rememberin' kisses, from lips I have never known,
And lovely adventures,
we have never known.
This promise of paradise, s
till sayin' that paradise,
Once nearly was mine.

Darlene Casella is a former stockbroker, English teacher, and small business owner.
Darlenecasella@msn.com
_________________________________________________________________________

In The Road to Morocco
Crosby and Hope sang.
"…This country's where they
Do the dance of the seven veils
We'd tell you more,
But the censors would have our tails."

In the late 1800's young Giovanni Casella, my husband's grandfather, boarded a ship in Genoa, Italy. Bound for America, he carried a suitcase and an Italian/English dictionary.

In San Francisco he eventually opened a hotel and restaurant. Casella joyfully became an American, prospered, returned to Italy many times, and had a church built in the town of his birth. Giovanni Casella embodied the American Dream.

Forward to 2007. "Shariah in Minnesota?" Muslim activists do not come here to be American, but to change America.

Most Minneapolis taxi drivers are Muslim. A women returning from France with a case of wine was refused by 5 cabs at the airport. The Muslim American Society issued a "fatwa" forbidding drivers from carrying alcohol. According to Muslim scholars there is prohibition against drinking alcohol; not carrying it. Muslims consider dogs 'unclean'. They will not drive blind people with Seeing Eye dogs. They should be fired.

Muslim cashiers at Target refuse to scan pork products, bacon, and pepperoni pizza. Islam prohibits consuming pork; not touching it. Those cashiers should be fired.

Before boarding a US Airways jet, six imams were loudly praying in the gate area, speaking angrily against the USA, and switching seats. Passengers complained. Imams were questioned and released that day. Imams are suing US Airways, the Metropolitan Airport, and passengers that reported the activities. Islamists claim they were the object of "religious profiling".

Keith Ellison, the first Muslim Congressman, is from Minnesota. CAIR, the Council on American Islamic Relations, is a tax deductible non profit in the USA, with alleged terrorist ties. Their goal is to force American law to adapt to Islamic law.

Nancy Pelosi and CAIR are working to pass the "End Racial Profiling Act." The Act would prevent airport security from disproportionately questioning those of Middle Eastern decent. CAIR is combining airport security, racial bigotry, and civil rights.

Confronting Islamists, Prime Minister John Howard said "Australian law is the Authority in Australia. Anyone not wanting to be Australian should clear off." He supports monitoring mosques.

"We're off on the Road to Morocco.
Like Webster's Dictionary
We're Moroccan Bound."

Anti American Islamists should be bound for any country where Shariah Law is in effect.

Cole Porter wrote

YOU’RE THE TOP

You’re the coliseum.
You’re the top.
You’re the Louver museum.
You’re a fiery comet, a Shakespeare sonnet, a symphony by Strauss.
You’re the top.
You’re Mickey Mouse.

This song was playful boisterous praise to a lover. However, it could be applied to American health care. It is the top. It has problems that need fixing, but American health care is the best in the world. People needing serious medical attention don’t flock to Montreal, London, Paris, Rome, Berlin, Beijing, or Moscow. They come to the USA for the top medical care in the world.

Health care is one of the most important legislations of the decade. President Bush has a medical plan for the country. Various Governors have plans for their states.

Arnold Schwarzenegger has one for us. It is to insure every person in Californian, cradle to grave. In Schwarzenegger’s plan, insurance costs would be shared by business, individuals, doctors, hospitals, and government.

Businesses with more than 10 employees must provide all employees with insurance, or pay 4% of their payroll into a state fund. Some employers will escape to more agreeable states.
Hospitals must pay an assessment of 4% of their gross revenues to the state fund. In recent years, ninety California hospitals closed in bankruptcy. Many hospitals run from break even to a 1% profit. The best generate a maximum 5% profit. This assessment will push some hospitals into bankruptcy. California’s most efficient hospitals would generate a 1% profit. Congenial Nevada could result in a 10 - 15% profit. You do the math.

Doctors would be forced to pay 2% of their gross revenues to the state fund. This is NOT going to help our doctor shortage.

Any Californian without insurance will be subject to tax fines. Low income people will receive state assistance to pay insurance premiums.

The Governor broke his leg. Did he hit his head? Has hero Milton Friedman been replaced by Karl Marx?

Porter’s song continues

You’re the top.
You’re the tower of Pisa. You’re the Nile.
You’re the smile, on the Mona Lisa.
You’re the nimble tread of the feet of
Fred Astaire,
You’re debonair, not camembert.
And Baby, if I’m the bottom,
You’re the top.

Fix what is broken. Don’t replace the system. Do not socialize us into second rate universal health coverage. We’re the top.

"When you're good to Mama,
Mama is good to you.

There's a lot of favors
I'm prepared to do
You do one for Mama
Mama do one for you."

Mama was the warden. Some State Attorney Generals (AG's) act like wardens. AGs have awesome power and enormous political ambition.

Many law suit contracts have contingency fees to outside attorneys written into them. This makes money a higher priority than justice in the settlements.

Our former AG, Bill Lockyer, and his pals shared a $60 million payday when he sued over California's energy crisis. He also filed an anti trust suit against grocery store chains during their last big strike. This helped United Food and Commercial Workers Union. Lockyer supporters.

There was the French fry law suit. Lockyer sued only national, deep pocketed, fast food chains. His lawyer friends came up with "Carcinon warning sought for fries, chips."

New York's AG, Spitzer, led the way. He sued big corporations, got his name in print, and appointed buddies in politically helpful plaintiff law firms. When they made huge contributions to his campaign, he acted shocked, stunned, and amazed.

Currently under investigation are concealed records regarding millions of dollars in contracts with AG Lockyer, lobbyists, and law firms.
The last silly law suit launched by Lockyer was against six of the worlds largest auto manufacturers, charging that greenhouse gases from their vehicles have caused billions of dollars in damages.

These auto manufacturers are being sued for obeying the law and all EPA regulations. This legal theater of the absurd makes the play "Waiting for Godo" seem purposeful.

Attorney Boutrous, the auto makers lawyer, wrote to current AG Jerry Brown..."We are hopeful that you will dismiss the suit....We view this case as a frivolous suit." It is disgraceful that Brown defended the case in court on February 1, 2007.

Aggressive anti business action drives companies out of California creating loss of jobs, and loss of tax revenue.The Attorney General's power to shakedown legal business is outrageous.

Mama continues

"When they pass the basket
Folks contribute to
You put out for Mama
She'll put out for you."

Stop coercing business to "put out". Seven states have adopted the "Private Attorney Retention Sunshine Act." California should too.

Don Ho sang

Tiny Bubbles, In the Wine…

Make Me Feel Happy…

Make Me Feel Fine…

For elected Democrats, tiny bubbles are not champagne. They are proposed laws floating on the populist tide of “soak the rich”. They do not make me feel happy.

Employee compensation is a deductible expense item for corporations. President Clinton put a million dollar cap per employee. To avoid the cap, deferred compensation and stock options became popular. In January a senate committee voted to include deferred compensation in the million dollar cap. This will be as ineffective as the compensation cap has been. The supper rich will hire tax lawyers to come up with new legal ways to avoid tax. Soak the rich sounds good to populists. It never happens.

Some executives are abhorrently over compensated. Deals are made in ways that would make Al Capone proud. Sunshine would correct this, not tax law.

Executives should be paid whatever the corporation decides, however they must get prior shareholder approval. It is not likely that Home Depot shareholders would have approved the $210 million severance package; and $77 million in deferred options, for their ousted CEO. The “soak the rich” crowd should keep their fingers out of the corporate pie. Power to the people. (oops! This isn’t the 60’s.)
Let the shareholders decide. Disclosure and shareholder approval will solve the problem of obscene executive compensation.

Congressman Barney Frank, asked for mandatory disclosure rules on the country’s highest paid. This would enable shareholders to know what their executives are paid. Boston Barney got this one right. However, Hollywood went crazy, and turned on the pressure, claiming that it compromised privacy.

The Securities and Exchange Commission scrapped a provision requiring compensation disclosure requirements for publicly traded companies. Tinsletown won. No disclosure required.

The democrat’s cry of “let’s soak the super rich” has been around since 1933. It has never been effective. Regular Americans do not have the luxury of avoiding tax, and are the ones who pay. The Alternative Minimum Tax was written to close the loophole on 21 millionaires that did not pay any tax. The unintended consequence is that millions of middle income people now pay AMT.

If you believe that the government can change repugnant executive compensation, sing along with Don Ho, have another glass of champagne and wait for the Tooth Fairy.

----------------------------------------------------------------------------------------------------------------

When Frank Sinatra sang Misty he referred to people intoxicatingly in love….clinging to a cloud!

On my own would I wander through this wonderland alone…
Never knowing my right foot
from my left…
My hat from my glove…
I get misty and too much in love…

Liberals are too misty to acknowledge that the Reagan tax cuts have produced a wealth of benefits. They ignore facts, scoff at economist Laffer, and insist that tax cuts do not pay for themselves.

The current reincarnation of this thinking is PAY GO, which requires that the federal government cannot spend more than it receives in tax revenues. While that sounds great, there is no agreement on how it would be achieved.

President Bush the first, developed PAY GO as part of an agreement with Democrats. If Congress did not make necessary spending cuts or tax measures by year’s end, OMB would sequester money, and slash spending across the board. The rules expired in 2002. Nancy Pelosi and the liberals restarted PAY GO, with new rules.
Republican’s want PAY GO to limit government spending to the amount of incoming revenues; to keep the current tax cuts, and to have a possibility of future tax cuts.
Democrats want PAY GO to end current tax breaks. If revenues do not meet spending, they would increase taxes to balance the budget. This gives Congress an open ended excuse to raise taxes. Clinton Treasury Secretary Robert Rubin begged the Democrats to raise taxes to “solve the nation’s fiscal problems”.

Many members of congress support balancing the budget with PAY GO. However, they may never agree on how that should be accomplished. Hypocritically, while supporting PAY GO, some simultaneously vote to waive rules and spend billions outside of the scope of the budget. We have come to expect this from the troglodytes that live inside the 495 Beltway loop. Congress seems as helpless as a kitten on a string when it comes to fiscal control, earmarks, overspending and integrity.

Walk my way and a thousand violins to play…
It might be the sound of your hello
That music I hear
I get misty the moment you’re near….

Or perhaps it’s an earmark; and taxpayers paid for two thousand violins and 76 trombones…

In Phantom of the Opera fraud is used for Christine’s seduction. Hauntingly memorable they sing Past the Point of No Return.

Our passion play has now begun….

Past all thought of right or wrong…

Abandon thought, let the dream descend…

What raging fire shall flood the soul…

What rich desire unlocks its door?

For some in our Medicaid System the raging fire flooding the soul was fraud.
The unlocked door of desire was over billing and kickbacks.

President Lincoln enacted the False Claims Act. It was to prevent fraud by contractors who billed the army for dead mules, boots with soles glued (not sewn), and gunpowder diluted with sawdust. This Act rewarded citizens that came forward to disclose fraud and prosecute it. It was called “Qui tam”; Latin for “He who comes for the king as well as for himself.”

The False Claims Act has been amended twice, President Roosevelt during WWII; for reasons similar to President Lincoln’s. President Reagan correctly believed that government spending was being misused and wasted. He increased monetary incentives. Today Qui tam law is called “whistleblower.”

The Deficit Reduction Act becomes effective in January 2007. Part of it involves fraud detection. It requires companies doing $5 million or more a year in Medicaid business to educate employees and officers how to detect fraud, waste, and abuse. It protects whistleblowers from retaliation and they may share in money recovered by the Government.

The Act covers health care providers, contractors, billing agents, vendors, pharmacies, HMO’s, physician groups and drug manufacturers. Compliance is mandatory for Medicaid reimbursement. A hopeless web of rules regarding eligibility for Medicaid are different in each state. Usually there is a 50/50 sharing of contributions between state and federal government.

Last year 72% of the $3 billion recovered in fraud was for health care cases. Tenet Healthcare, a large hospital chain, paid more than $900 million to resolve a charge it has over billed Medicaid and paid kickbacks to doctors.

Medco Health Solutions paid $155 million for submitting false claims and soliciting kickbacks from drug companies. Some states are pursuing their own Medicaid
Fraud Units. Florida recovered $74 million last year.

Their love aria continues

“Say you want me with you here beside you…

Anywhere you go, let me go too…

That is all I ask of you.”

All I ask is that the perpetrators of fraud go to jail. Do not pass Go. Do not collect $200.

________________________________________________________________________

If I loved you,
Time and again
I would try to say
All I’d want you to know….

If voters loved Republicans, they didn’t try to say it in the last election.

Traditionally Democrats have been the tax and spend party. In the last term Republicans did more than their share of spending, took shame full earmarks, and failed to pass new tax cuts; or lower the Death Tax.

Many of the newly elected democrats are “Blue Dogs”. They ran on platforms of lower taxes, less spending, fiscal responsibility, and an end to Earmarks. Will Blue Dogs keep campaign promises or side with liberal democrats?

Chuck Schumer and other liberals have long been calling for a tariff on Chinese goods. Now that dems are in power, it could happen. In response, China issued a statement that the US dollar is not a good investment; and may weaken. The dollar weakened. If we put on a tariff, they will stop investing in our currency. Chuck doesn’t seem to understand the global interchange of economics.

Ever notice that when democrats are in control, the dollar gets soft. Remember currency valuation under Carter. Ronald Reagan was like Viagra for the dollar.
US Tax regulation is outrageous.
The income tax is 90 years old; it was bad at the start, and got worse. Some income is not taxed; such as Municipal Bond interest.
Other income is taxed twice, such as dividends. There are hundreds of tax rules about savings: 401(k)’s, Keoghs, deductible IRAs, non deductible IRAs, pension plans, qualified annuities, non-qualified annuities, and more.

There have been 25 major changes in the capital gains tax since 1922. There are more than 500 different tax forms, and the tax code is more than 50,000 pages. There are zillions of inequalities in the tax code. Home owners are treated better than renters, for example.

Income tax is called a voluntary system. Don’t pay your taxes, go to jail. Voluntary!

If I loved you,
Words wouldn’t come in
an easy way.
‘Round in circles, I’d go.
Longin’ to tell you,
But afraid and shy…

Let’s hope that Blue Dogs and conservative republicans will find words that do come in an easy way that will enable them to end the circles of over taxation, overspending, earmarks, and outrageous regulations.

Pray they are not afraid and shy. Don’t let our golden chances pass right by.

After Castro’s Revolution in the 60’s, Barry Manilow wrote this:

At the Copa, Copacabana,
The hottest spot north of Havana
At the Copa, Copacabana,
Music and passion were always the fashion…

In 1959 a revolution put Fidel Castro into power. A miserable life style is endured by the 11 million Cubans who live as prisoners. For many years, when Fidel saw a women he wanted, she was ordered to come with him. If a father or husband objected, he was killed. There was nothing good about Fidel Castro. Never the less, sanctions should be lifted.

Fidel used sanctions as an excuse for his failed socialism. He is free to trade with Canada, South America, and Europe; but he effectively blames the American embargo for every malady in Cuba.

When President Kennedy passed the Cuban trade embargo, we were in a Cold War with the Soviet Union. The following three decades, Soviets gave $100,000 billion to Cuba, for Soviet military bases. The Soviet Union collapsed; sanctions were not lifted.

President Clinton instituted this policy. A refugee found on land can stay; found on water, sent back. Remember Elian Gonzalez.
Cuban hotels are first rate. Cubans are not allowed; except as workers.
Foreigners enjoy the beaches. Americans are banned from travel to Cuba. However, over 200,000 Americans visit Cuba each year. An author friend has traveled to Cuba twice doing research. He remembers the vibrant glamorous Cuba of the 50’s which is now in decay.

Senator John Warner (R-VA) lead a group that included Henry Kissenger, Lawrence Eagleburger, and George Schultz asking President Clinton to appoint a commission to re-evaluate US Policy towards Cuba. Clinton refused.

The American Farm Bureau estimates that Cuba could become a $1billion export market for farmers. Cubans seldom eat meat and have limited food choices.

Sanctions should be lifted. We must open diplomatic ties. When Castro dies, Cuba could become a puppet of Venezuela or some other anti American dictatorship. Takeover by one of the Islamist Terrorist organizations is a threat.

Cuba could block water from the Atlantic to New Orleans; and have a significant impact on trade. Terrorist attacks to Florida and the Gulf Coast become probable.

“Tear down that embargo wall, Mr. President.”

We could meringue and do the cha cha
Music and passion could again be in fashion
At the Copa. We’d fall in love.

Sinatra’s seducing sounds of Witchcraft

When you arouse the need in me…
My heart said yes indeed in me…
Proceed with what you’re leading me to…

The housing bubble started in 2001. Buyers were seduced into homes they could not afford; mortgage lenders were bewitched into accepting loans of those with scuffed credit, no down payments, no income documentation; and high risk…Was it witchcraft? Fannie Mae and Freddie Mac got even more creative, which fueled housing mortgage growth. The bubble grew, new construction boomed, and prices soared.

Enticing Adjustable Rate Mortgages offered low early term rates, some as low as 2%. When interest rates increased, the mortgage rate jumped to 6% and higher; mortgage payments doubled or worse. Spellbound buyers that could not pay the higher adjusted rates lost their homes.

When housing prices were increasing; it didn’t matter if the mortgage defaulted. Lenders could re-sell without a loss. Now re-selling is a problem. This year repurchases tripled in the first and second quarter. Many disputes are ending up in court. Some lenders are in bankruptcy proceedings
Developers are hexed by run away costs. Oil prices soared; steel and iron increased in price by more than 33%. Oil prices are coming back down; but OPEC is threatening to decrease production. Increased costs made building projects run over budget and caused construction inflation.
Experts disagree about the housing bubble. Some, like Goldman Sachs, think that it is about to burst; and the Fed will cut short term rates. Former Fed Chairman Alan Greenspan feels the bubble has already burst. He said “The worst may well be over for the housing slump”. Fed Chairman Bernanke kept interest rates unchanged after the last Federal Reserve Board Meeting. Many think he will continue to keep interest rates low. Doom and gloomers say that 2007 will bring about the worst national housing decline since the Great Depression. Pick your expert!

Wizard Sinatra continued

It’s such an ancient pitch…
But one that I’d never switch…
Cause there’s no nicer witch
Than you.

Send in Merlin. Perhaps he would bring real estate Camelot.
__________________________

From the movie Shall We Dance, Fred Astaire sang

They Can't Take That Away From Me.
The way your smile just beams…
The way you sing off key…
The way you haunt my dreams…
No, they can't take that away from
me….

Social Security benefits are not guaranteed. They can take that away from you. There is no legal right to Social Security. Congress can alter governmental obligations. Social Security is a government obligation; not a debt; not a guarantee.

In late August President Bush signed regulations requiring that corporations insure their pension funds; so that retirees will get what they expect. There is no such bill about Social Security.

Despite Al Gore's promise, there is no lock box. The Wall Street Journal recently headlined: "Will America declare Chapter 11, because of $80 trillion in unfunded retirement promises?"

We rely on a combination of birth rate; and immigration to increase the labor force in order to pay Social Security owed. "Congresses and Presidents have made entitlement promises for Social Security and Medicare so outsized and outlandish and so unaffordable that the US is heading for financial abyss. And no one cares!"

Young people have no chance of getting Social Security. They must insist on reform. This should include retirement savings accounts, which they would own as private property.
The key to solving these horrific problems is reform. Liberals in
Congress killed the Social Security Reform Bill of 2006.

California's pension plans are under funded by over $100 billion. Democrat legislators dumped David Crane from the state board that handles teacher's retirement funds. He questioned whether the pension funds could earn enough to pay promised teacher retirement benefits. Unions claim that he is trying to undermine their political power.

Teachers should worry. Warren Buffet expects a 6.4% return in his investment retirement account. Those running California teachers retirement expect 8%. Do bureaucrats know more about investing than Warren Buffet?

Want to loose sleep? Think about retirement without Social Security; and your corporate pension plan in bankruptcy.

We may never never meet again…
On the bumpy road to love…
But I'll always keep the memory of …
The way you hold your knife…
The way you changed by life…
The way you haunt my dreams….
No, they can't take that away from me.

They can take that away from you. Without major Social Security reform, they probably will.

The leaves began to fade;
Like promises we made…
How could a thing so right, go wrong…
The Things We Did Last Summer…
I'll Remember All Winter Long…

For the things elected officials did last summer, we will pay all winter long, and for many winters to come. Politicians in both parties joined the tax and spend crowd.
Congress should be questioned about how they make spending decisions as they hand out vast amounts of tax payer's dollars.

Before Congress votes, supporters of a program, administrators of current programs, and lobbyists who are paid to promote the program, tell Congress their side on a spending program.
This lopsided approach causes wasteful programs to be funded and continue to be funded for decades. Congress should hear from opponents. Over site committees should invite critics as part of the process.
Also, the Sunshine Law (not the Mushroom Law) should apply. The federal government spends $500 billion in goods and services. It hands out another $500 billion in grants, to individuals, businesses, non-profits, and state and local governments.

Information regarding these spending/handouts should be easily accessible. People today have internet access. They own a computer, or go to the library. Senator Tom Coburn/ Oklahoma; and Senator Jeff Flake/ Arizona are proposing legislation to create a database for these federal payments that anyone can access on line.

Thanks to liberals and the Supreme Count, the President no longer has line item veto power. Earmarks are pork barrel spending provisions added to a bill after it passes Congress, but before it goes to the President. Earmarks should be illegal.
Politicians tout military defense, airport improvements and worthy projects. The reality is hidden without our access to spending information. The Federal Assistance Award Program has given grants and loans to: motels, fast food franchises, a $1.5 million loan to a Los Angeles liquor store; $1.4 million loan to an Anaheim car wash; and $1.1 million to a pizza shop in Hayward. One individual received a $40,000 subsidy for a project Called "References to Spanish Baroque Theatre in the Royal Palace Archives."

Sinatra continues

I've tried so to forget, at times I do,
and yet
The things we did last summer
I'll remember all winter long.

Let's hope the Coburn-Flake Bill gets through the Senate. Your children, and maybe your grandchildren, will be paying for what elected officials did last summer.

When I wake up each morning trying to find myself
I always remind myself Though you're someone in this world I'll always choose to love
From now on you're only someone that I used to love.

Are the Big 3: GM, Ford, and Chrysler, only someone that we used to love? Wall Street Journal headlines "Black Friday for Detroit". Thousands of auto workers are fired; Ford suspends its dividend payments.

As their market shares fall, GM is negotiating a merger with Nissan and Renault SA. The German fellow in the Chrysler TV commercial is actually the CEO of their German parent company.

Big 3 job losses are dismal, with personal hardship for the workers. Unfairly, the liberal media uses this to gage the entire industry. The Big 3 are run by the United Auto Workers union. UAW contracts require 95% pay during lay offs. People are not laid off, they are fired. Higher pay and higher benefits adds $2500 - $3000 cost per car.

Are foreign name cars imports? All of the top ten models sold in the USA are made in America. Accord, Acura, Audi, BMW, British MG, Honda, Mazda, Mercedes, Mitsubishi, Nissan, Odyssey, Toyota, Subaru, and Suzuki all have non union US facilities.
They are in Alabama, Mississippi, Kentucky, California, and Indiana. The slogan "Buy American," has new meaning. Foreign name vehicles are made in the USA. Over 1,000,000 American workers are employed in these plants.

When NAFTA was enacted roughly 10,000,000 cars were made in America. Today it's about 12,000,000. The auto industry is thriving. Manufacturers have integrated parts and machinery from Canada, the US, and Mexico. This results in better cars at lower costs.

Ford family members own about 40% of the stock. The Detroit Lions, a Himalayan ski resort in India, various philanthropic causes, and the Hare Krishna movement will likely be receiving less from the Fords.

When Henry Ford built the Model A in l903; he couldn't have dreamed of the world in which his great grandchildren live. Who would have imagined that Japanese, Korean, and European cars would be made in America.

Natalie's song continues

I did my best to keep you satisfied

I really tried
But from now on you're just someone that I used to love
From now on you're just someone that I used to love.

Before the fiddlers have fled
Before they ask us to pay the bill,
And while we still have a chance
Let’s face the music and dance…

The Fiddlers have fled; and so has diversity in media. In l992 The Media Monopoly complained “Two dozen creatures own and operate 90% of the mass media.” Currently 5 corporations control mass media.

Television networks; newspapers; magazines, radio stations, videos, wire services, and movies conform to political correctness, push story lines, and slant issues while omitting information in conflict with their agenda. Propaganda films are portrayed as documentaries; others re-write history.

It’s Orwellian, we have thought police. Don’t think evil of young Islamics. Although they commit 99% of terrorist attacks. When did illegal alien become a racial slur, rather than a legal definition? Schwarzenegger said “hot blooded” in private, and made headlines across the country.

Time Warner is the largest. They own CNN, Turner Classic Movies; TNT, HBO International; 24 magazines including Time, People, and Sports Illustrated; are part owners of Comedy Central, Cinemax, Court TV, Warner Brothers, and more. Their global assault reaches over 200 countries.

Next in magnitude is Disney, owning ABC, 10 TV stations, 21 radio stations, Disney channels, ESPN, Lifetime, A & E; History Channels, Americast, telephone companies; Disney, other studios, Miramax, newspapers, magazines; theme parks, cruise lines, and more.
Third is Bertelsmann, a German Corporation dealing primarily in Europe.

Viacom (formerly CBS) boasts fourth place; owning MTV, 13 TV stations, Showtime, Comedy Central, VH1, Paramount, Blockbuster Video, Simon & Schuster; and more.

The fifth mogul is Rupert Murdock’s News Corporation which owns Twentieth Century Fox; Fox TV Networks, British Sky Broadcasting, Fox Sports, Family Channel, London Times, NY Post, Harper Collins, LA Dodgers, and more.

How do anti Republican comments find their way into Sports Illustrated.

Media giants promote their ideologies and political views; deciding what is newsworthy. Interpreting events around the world, they feed sociopolitical ideas through film productions, TV, radio, CD’s; video; amusement parks (remember gay and lesbian day at Disney World), and magazines.

Sex without love is glamorized; single parenting; gay marriage; and gratuitous violence dominate movies, television, and magazines.

Berlin’s lyric continues.

There may be trouble ahead It is here.
There may be teardrops to shed
So while there’s music and moonlight
And love and romance
Let’s face the music and dance

Where is Fred Astaire when you need him?

When Diana Ross wailed

Ain't No Mountain High Enough,
Ain't No Valley Low Enough,
Ain't No River Wild Enough
To keep me from you….

She left out the biggest obstacle in getting to her man - Congested traffic. The Federal Highway Administration states that since l980 American driving increased 94%, while new highway lanes increased only 6%. We need more roads. How will we pay for them?
Toll roads have been successful. All Western European countries have high quality toll auto ways. In China the Guangzhou-Shenzhen highway is privately financed and operated, in Chile private franchises provide limited access highways. In America, fast moving traffic flows on toll highways through out the North East. Those states were exempted from the l956 Federal Highway Bill that made interstate toll roads illegal.
Since the 18th Century, toll roads have existed in the USA. President Eisenhower's l956 Bill authorized federal gasoline taxes to build highways. Gasoline taxes increased; highway systems declined.
The WSJ recently wrote that some cities are making public highways private. Last year a private company paid $1.83 billion for the right to operate the 7.8 mile Chicago Skyway for 99 years. Indiana leased its 157 mile turnpike for 75 years for $3.8 Billion.

Pilot programs allowing states to charge tolls on federal highways for road improvements have been started by the Federal Government. About $25 billion in projects have been proposed according to Reason Foundation, a libertarian research organization.
More states are considering conversion of public roads into private ones. A pay as you go system, rather than to increase taxes. Macquarie Infrastructure Group of Australia and Cintra Consesiones of Spain worked on the Chicago Skyway deal. They have put together a $3 billion fund to invest in similar projects. Merrill Lynch, Goldman Sachs, and Morgan Stanley also offer these services.
Privatization opponents, such as John Foote from Harvard's Kennedy School use slogans such as "American roads belong to Americans". Their bumper sticker mentality sounds good, but what does it mean.
The choices are: Worsening congested traffic, higher gasoline taxes; higher taxes though highway bonds; or tolls paid on certain highways.
Taxes are too high. Tell elected officials to take their tax hand out of your pocket. Give toll roads a try.

Diana continues

If you need me, call me.
No matter where you are,
No matter how far,
And I'll be there in a hurry…

Would she rather pay a toll and race to her lover, or sit in traffic? You decide.

Nat King Cole sang

The more I see you,
The more I want you…
Somehow this feeling;

Just grows and grows
With every sigh, I become
more mad about you

More lost without you and so it goes.
Can you imagine, how much I love you?

Love grows during wild and uncontrolled orgies between politicians and agribusiness; with our tax dollars paid in farm subsidies.
Under President Reagan the dollar was at record highs. Our exports were high in cost compared to other countries. American farmers suffered. A l985 law called for price supports on farm commodities.
USA started GATT (General Agreement on Tariffs and Trade) asking nations to gradually eliminate farm subsidies. The Uruguay Round of 1992 completed those negotiations. Like Miss Havisham’s wedding, these great expectations were not consummated.
Today most of our “farms” are large agribusiness industries. Agriculture subsidies of $173 billion have been approved. Half of this money will go to 8% of the “farmers”.
DOHA, the latest international trade agreement, failed. Agreements are named after the place of the initial convergence. This was at Doha, Qatar in 2001. Negotiations continued until this year, climaxing in failure.
USA inserts stiff tariffs on goods from other countries.
The tariff on sugar is 129%. Congress is sweet on sugar, and we pay more than double the world price. Reform would lower costs for candy, confectionary, chocolate, cocoa, chewing gum, bread, cookies, crackers, and frozen bakery products. These American businesses have all lost thousands of jobs.
Americans pay artificially inflated prices for sugar, milk, butter, cheese, peanuts, beef, orange juice, and more.
Sam Vaknin, author of Malignant Self Love, wrote: “Agriculture subsidies and tariffs cause exorbitant food prices, double payments by citizens, once as taxpayers and then as consumers, mountains of butter and rivers of milk produced for the sake of finagling subsidies out of a bloated bureaucracy ….”
President Reagan helped family farmers survive. He could not have intended what it has become. Washington’s voluptuous tariff tarts and repulsive subsidy revelries must be stopped.

Somehow this feeling
Just Grows and Grows;

My arms won’t free you
My heart won’t try…

What grows and grows should not be our taxes, and taxes should not be strong armed for agribusiness. American hearts must insist on reform.

Bing Crosby crooned,

“Dancing in the dark, till the tune ends;
We’re dancing in the dark,
and it soon ends…”

It may be great for lovers to be in the dark; but for taxpayers it is another story. The muddled mess of estate tax law keeps everyone in the dark. The highest rate this year is 47%; it goes to zero in 2010; the following year it will be 55%. The dollar amount of the exemption changes too. The unfair ever changing Death Tax should be called the Full Employment for Lawyers Tax.
The first estate tax was enacted in l797 to pay for Navy armament. It ended in 4 years. Re-enacted during the Civil War; it was abolished in l870. In l898 it was re-established to pay for the Spanish American war; and repealed in l902.
Estate tax again came to the war rescue in 1916. It was not repealed. President Roosevelt raised it to 70%.
Politicians get to decide the amount of worldly goods that can be confiscated by the government when you die. Death tax is the highest of all government taxes; and imposed at the most inappropriate time - the death of a loved one.
Bing Crosby was enormously successful, but unsophisticated about taxes. When his first wife died, Death Taxes wiped him out. He was forced to sell everything and found himself in mid life with nothing except talent.
In June Congress passed the Permanent Estate Tax Relief Act of 2006. It offers a $5 million exemption per person. Most Republicans want it passed. Most Democrats do not. The rich, and liberals like Diane Feinstein, Nancy Pelosi, and Ted Kennedy; use trusts to insure their assets will not end up in government hands. The Death Tax mostly affects farmers and family businesses because of increased land value. Children are forced sell the farm or the business to pay death taxes.
The House has repealed the death tax several times. The Senate prevented passage through filibuster. Let us hope that this Tax Relieve Act will get through the Senate.

Bing continues…

We’re dancing in the dark,
and it soon ends;
We’re waltzing in the wonder of why we’re here
Time hurries by, and we’re gone…

You can’t take it with you.; and if the democrats have their way, your children will owe taxes on it.

It was just one of those things,
Just one of these marvelous things;
A trip to the moon on gossamer wings,
Just one of those things.

If we’d thought of it at the start of it…

We’d have kept the synfuel project, called Energy Security Corporation (ESC) proposed in 1979. Long gas lines made people pay attention. The goal was to cut oil imports and break our bondage to OPEC. The production of synthetic fuels, and oil squeezed out of shale rock was the heart of the program. ESC would have been outside of government. Run like a business, it would choose which projects to encourage, buy synthetic fuels at guaranteed prices, give loans to synthetic fuel producers; and build synfuel plants itself.
If we had stayed with ESC, there would be ethanol; bio degradable green fuels, viable hydrogen or electric cars; oil shale projects; and other yet undiscovered alternatives. We would have become energy independent.
Also proposed was an Energy Mobilization Board like the War Production Board 1942-5. The mission: to cut red tape. They would select projects, build pipelines, refineries, open coal mines; and seeks ways to expand domestic fuel. State and local authorities would have been allowed to give a “YES/NO” answer to a project. The maze of environmental and other laws that set rigid guidelines would have been ended.
There have been no serious government proposals to counter our dependence on OPEC and international oil corporations. Oil companies, like all corporations, do what is best for their shareholders If your retirement plan, or mutual fund, owns oil company shares you want them to protect you.
Some claim oil company profits are un-American. Are Hollywood profits un-American? Why not reduce the price of a movie ticket; or lower the salary of some of the TV guys who are mad as hell about oil companies.
Many oil companies are foreign. Names in the top ten: Royal Dutch Petroleum; British Petroleum, Total Petro Fina (owned by Belgium and France), ENI (owned by Italy). There are companies such as ARCO with major operations in Asia, Latin America, the USA, and the Middle East. Oil is an international commodity, traded on the world market. Price is based on world wide supply and demand.
We need Government leadership on this critical issue. In 1979 shortage of oil was a national crisis. The worst President in American history got this bill through Congress.
Leaders in Washington must to do something besides finger pointing and mandating use of ethanol. If they do not, you may be singing this to your car:

“So good bye Dear, and Amen.
Here’s hoping we meet now and then.
It was great fun,
But it was just one on those things.”
______________

“Money Makes the World go Round,

The World Go Round, The World Go Round;

A Mark, a Yen, a Buck or a Pound;

Money Makes the World go Round…”

In New York around 1750 on Wall Street, under a Buttonwood tree; merchants gathered to auction and trade. They dealt in wheat, tobacco, cotton, sugar, and more.

After the Revolutionary War, the Government issued SCRIP money to pay soldiers, and pay merchants for food and supplies. SCRIP became the first stock certificates.
In l792, still under the Buttonwood tree, 24 men established an exclusive trading organization. This became the New York Stock Exchange (NYSE). Next year they moved inside to the Tontine Coffee House.
After the War of 1812, the US Government issued bonds. Forty new banks were established. Wall Street provided the financing for these banks with stock and bond certificates.

Fast forward to 2006. The NYSE bid $10.5 billion for Euronext. That Exchange was created by Jean-Francois Theodore, who pulled together the Paris, Brussels, Amsterdam, and Lisbon Exchanges and the London International Financial Futures Exchange. Upping the bidding for Euronext is Deutsche Borse AG, the German Exchange.
Why is the NYSE eager to be the groom at this wedding? Money is flowing to Europe. Of the last 24 Public Offerings over $1 billion, 23 were done overseas. Our quagmire of rules and laws are hostile to capital formation. Regulations such as Sarbonnes-Oxley, costs millions in fees without benefit to shareholders, do not exist overseas. Companies prefer to list on foreign exchanges. Europe’s fears were eased when the SEC stated…"foreign exchanges or companies would not fall under their regulations unless the company operates in the USA”.
In addition, there is the Committee for Foreign Investment in the United States (CFIUS). It is led by the Treasury Secretary with Department of State, Homeland Security, and Defense all at the table. Now Congress wants to review CFIUS details which will open it up to political concerns.
Another plus for the NYSE in this erger, would be access to lucrative derivative markets, options, and futures. Currently the Chicago Mercantile and CBOT have an exclusive thanks to Federal Regulation.

Cabaret was written in the 1940’s, however it’s still true that…

“Money Makes the World Go Round,

That Clinking Clanking Sound,

Still Makes the World Go Round…”
_____________________

You must remember this
A kiss is just a kiss
A sigh is just a sigh
The fundamental things apply

As time goes by.
It’s still the same old story
A fight for love and glory
A case of do or die.
The world will always welcome investors,
As time goes by.

Many thanks to Lee Ellis for providing the alteration to a time honored classic song from my favorite movie, Casablanca.

The world will always welcome investors. However, it is not especially helpful in educating investors. Stockbrokers, like doctors, lawyers, and Indian Chiefs, are not all equal. Some have your best long term interest at heart. Others have commissions in mind.

Buying anything in the stock market has risk. Remember l929! When a bond yield seems especially high and more attractive than its peers; it is most likely because it has a low bond rating. That issuer is at higher risk of default.

Congress is maintaining the capital gains and dividends rate reduction at 15%, but only for another year. Companies that pay high dividends will continue to be attractive this year.
The Federal Reserve Board brought interest short term rates up another notch, for the 16th time in a row, at 5%; the prime lending rate 8%. This is great for those seeking higher interest rates in money market accounts, Treasuries, and other fixed interest rate investments. Chairman Bernanke said further increases may be needed to address inflation. You may want to keep fixed income investments short term; and look for higher rates in the future.

Buying stock on margin, which means borrowing against equity, carries a different risk. The horror stories of the 1929 crash were primarily about purchasers on margin that could not come up with the necessary cash to meet margin calls. Millionaires became penniless overnight. A. P. Giannini, founder of Bank of America, was my mother in law’s Godfather. She did not buy on margin. Although the shares were practically worthless, she held on to them. Eventually the market came back. She lived into her late nineties still collecting dividends on those stocks.

“Moonlight and love songs never out of date,
Woman needs man and man must have a mate,
You must remember this,
The Fundamental things apply,
As time goes by”:

Somewhere my Love….

There will be songs to sing

Although the snow covers the hope of Spring

Somewhere a hill, blossoms in green and gold

And there are dreams, all that your heart can hold.

These are beautiful lyrics from Dr. Zhivago, who could not avoid the love a women that destiny put in his way.

Are investors destined to buy Russian Initial Public Offerings (IPOs) put in their way? Russian IPOs have been in the news lately because a large number of Russian companies want to sell shares in the international market.

In America when a corporation wants to raise money, it is usually to expand its business or for new research and development. Companies seek an investment banker, such as Merrill Lynch; and talk with names like Ashland Montague III in Corporate Finance, about why their company should be brought to market. El Pollo Loco is currently planning an IPO. They want to expand business into New England.

The Securities Act of l933 has many strict laws that that must be followed before the Securities and Exchange Commission will allow corporate shares sold to the public. After the shares are issued, the Securities Act of l934 (Mostly written by old Joe Kennedy; but that’s another story.) makes certain the markets are maintained by free market forces; and not manipulated.

Investors seek blossoms in green and gold. Whether it is you personally, your pension fund, retirement plan, or a mutual fund; you are in the market. You’ll make a profit if the company does well, and the price goes up; and the reverse is true. If you bought Google on the IPO, you are a very happy person!

What is the purpose of this surge in Russian IPO’s? There is huge concern that corporate officers will take the money and run. In Russia there are no Securities Acts to protect investors.

Russia imprisoned Mikail Khodorkovsky, former CEO and largest shareholder of Yukos Oil, nationalizing the largest oil company in Russia. Shareholders lost everything. A law suit has been filed by American shareholders against the Russian Federation. There is nothing in Russian law to prevent nationalization of private companies from happening again, and again. This should cast a chill over investing in Russia.

Somewhere my love there will be songs to sing,

but probably not in Khodorkovsky's prison. He shares a small cell with 16 inmates; newspapers and TV are not allowed.

The question about private stock ownership in Russia is whether the song be

Jail House Blues or If I Were A Rich Man?

It is anybody’s guess.

The Broadway musical Brigadoon promises “If you believe, anything can happen.”

The ebullient Tommy sings

"What a day this has been,

What a rare mood I’m in,

Why It’s almost like
being in love."

The magical qualities of Brigadoon must have infested Capital Hill during the last energy bill. Americans are paying the price for congressional energy mistakes, and it’s going to get worse. $3 a gallon is going to look good.

Paybacks to Midwest corn farmers included laws for huge ethanol consumption. A requirement of 7.5 billion gallons by 2012. Ethanol costs more to produce than gasoline. Agribusiness giants benefit financially because of mandated ethanol use.

Mitch Irwin, Michigan’s Agriculture Department Director, said they currently produce about 1% of the nation’s ethanol. Four new plants are scheduled to open; and expect to produce 200 million gallons of ethanol a year. The $60 billion agriculture business is expected to grow. Michigan is offering tax incentives for companies to build ethanol and other green fuel plants.

Ethanol cannot be shipped through ready made pipes. It must be sent by truck or rail to the selling point and then blended. This is inefficiency which could only be found in the former Soviet Union.

Distribution is extremely difficult. States on the East, West, and Gulf coasts would find it easier and cheaper to import ethanol by ship. However, Congress put a 2.5% tariff plus a 54 cents a gallon duty on imported ethanol.

Since the 1990’s MBTE, a chemical, has been used in gasoline to meet federal pollution standards for clear air and fuel efficiency. When environmentalists made it a legal target, Congress refused it tort protection. MBTE makers are leaving the market fast; causing an added loss of l.5% in gasoline supply.

To blend ethanol, refiners must remove some gasoline components or risk violating air pollution standards. This will cause a further 1.7% shrinkage in gasoline supply.

You don’t need Milton Friedman for this. Less supply + mandated use of high cost ethanol + high demand = higher prices at the pump.

While writing this bill, Congress must have seen Brigadoon and said “We believe in fuel magic”.

Please share the fairy dust. Join energy fantasy land. At the gas pump, we may even burst into song:

‘Maybe the air
gave me the drive,
For I’m all aglow and alive.
What a day this has been,
What a rare mood I’m in.
Why it’s almost like
being in love.”

______________________________________________________________________________

is sung in the Broadway musical. Not admitting to his dull life as a tax collector, Quixote creates a fantasy quest to attain The Impossible Dream.

It would seem that liberal New York Attorney General and wanna be Governor, Eliot Spitzer, has similar issues.

He is tilting swords and suing H & R Block for $250 million because they created Express IRA which encourages low income people to save part of their tax refunds in an Individual Retirement Account. Nearly 600,000 customers have used this. The $300 required deposit is far below most IRA minimums. Vanguard’s minimum is $3,000. To date Block has actually lost money on the program; but believes it has value.

Americans living from paycheck to paycheck have difficulty saving for their retirement which is 20 or 30 years away. Everyone needs to do it; and Block has found a simple way for tax refunds to be channeled into a retirement account. It looks like a win – win situation to everyone except Spitzer.

Intuit; Tax Max; Liberty Tax Service, and other companies have started offering tax refund – IRA account services to low income clients. The Brookings Institutions, the Pew Charitable Trusts, and House Democrats Rahm Emanuel and Jim Cooper have sponsored legislation to require the IRS to set up direct deposit procedures.
Only about 12% of low income earners have retirement accounts. Most financial institutions and banks do not pursue clients in the bottom income brackets.
The New York Sun recently had an article entitled Spitzer Versus the Poor. “The Lord High Executioner of Wall Street, Eliot Spitzer, now wants to make it 'fraud' to help a poor person save for retirement.” The article makes the case against Spitzer.

It is not clear why Spitzer feels it is his job to set fees for H & R Block; or why he thinks that government intervention is needed. Perhaps Sancho could hand him a cold towel and whisper into his ear

“No matter how hopeless, no matter how far,

To be willing to march into hell…for a heavenly cause…”

And the world would be better for this…"

Eliot Spitzer get over yourself. You are not Don Quixote. H & R Block is not a windmill or an enemy of the state.

__________________________________________________________

Darlene Casella is a former stockbroker, English teacher and small business owner. You may read her past articles on www.thevalleybreeze.com, or she may be emailed at
darlenecasella@msn.com

In the Broadway musical The King and I, when Anna sang

“Shall We Dance?”

On a bright cloud of music, shall we fly?

Shall we then say goodnight and mean goodbye?”

Romance lifted hearts as Anna and the King became dancers. Now “dancer” is slang for people in the underground economy who don’t report to income to the IRS, live in a cash economy, and don’t pay taxes.

The difference between the wider economy and the taxed economy is called a tax gap. In 1992 it was $93 billion. This year Baron’s showed the shadow economy at about $970 billion. Wages of illegal immigrants could add another $50 billion a year.

Lord William Nut