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October 20, 2011

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A little good news----

EUROPE is slowly trying to form a united front to take on Greek debt. A long way to go in this deal but at least they are coming together politically. I can't dsee how Greece will ever service the 50% left over but miracles occasionally happen. Spain and Italy ae much bigger #'s but at least they have an economy.

US GDP appears to ---

be continuing it's slow rise. If it isn't revised the GDP will at least push off the double dip another quarter if there really is one. Our numbers show a slowdown but still moving upward. I still believe the slowdown is more from fear than economics but it is not likely to decrease as long as we are in an election cycle. The big hope for the country will be the preChristmas announcement of the Deficit Commissions work. The stimulus money from year two is still funding a lot of road work and FEMA money will give the economy a little push as well.

INDUSTRY IGNORES----

Just as the President is implementing his blame Congress strategy in cooperation with Senator Reid's refusal to bring anything the Republican house passes to a vote, US businesses are pretty much bypasssing the President's Healthcare and Energy moves. The hottest segment of the American economy is energy--and not green energy. It is oil and natural gas. The Dakota's are on fire. If you want a job go North. And, there is a strong move to develop and liquify Natural Gas. There is enough natural gas in North America to serve the country for nearly a century and it burns 20% cleaner than oil/gasoline. The President may not want it but America does and a good investment bet for the US and investors would be on natural gas. It seels for 5 x in China what we pay for it here.

The “Pelosi Crony Socialism” blog probably describes any state or federal government when one party has control and the main stream media is reluctant to question what the party does. In the case of Delaware, it is called “The Delaware Way”. A large donor, Chris Tigani, owns a liquor distributorship and wanted to expand into the County of Democratic Governor, Ruth Minor a few years ago. After flying her to Toronto, the Minor administration rewarded Chris with a 100 year, $1, lease for a parcel of state land adjacent a limited access highway. Shortly thereafter the state built an interchange for Chris linking his warehouse to the highway. This only has come to light recently because the FBI is investigating complaints from other folks who had been trying to buy the land in question.

Delaware's equivalent to California’s “renewable energy” solar panels is off-shore wind farms. The utility (Delmarva) was confronted by a new state law requiring that a substantial portion of its electricity be generated by ”green technologies”, with the rate payers of course paying the costs. The recent budget crisis, where Obama was forced into cuts, eliminated federal guarantees for wind farm construction loans. Since no institution will fund this speculative technology without government guarantees, the funding collapsed and Delmarva lost its ability to meet the new law. Not a bad result except that the environmentalists are threatening Delmarva with litigation for failure to comply.

Can anyone explain what is going on with respect to the Job Bills? Obama is demonizing Republicans for blocking Senate action. But, the Democrats have a majority and Reid does not support the Bill. Biden is loudly saying that there will be a surge in rapes and general crimes unless the Federal government funds an increase in local police and firemen. Reid is saying that the recovery is going well in the private sector, notwithstanding that statistics show a job loss rate of 5.4% in the private sector, versus 1.8% in
the public sector, since the recession began in the fall of 2007. Democratic Senator Ben Nelson is saying that he does not think that one should increase taxes for new spending at this time. Democrat Mark Pryer says: “I’m not sure federal taxpayers should be paying for teachers and first responders. That has traditionally been a state and local matter.” Yet, the Main Stream Media has not been critical of Obama’s claims that Republicans are irresponsibly blocking Senate action, or of Reid’s claims concerning the state of the economy.

A WOUNDED POLITICIAN---

How much damage can President Obama do between now and elections? The President certainly sees himself at this point desperate for a strategy that will get him reelected next year. He has little to actually run on yet that people will buy. His ratings are in free fall. In his desperate attempt to shore up the left he appears to be making all his decisions to garner votes. In doing so he is going against virtually everyone: his Republican critics, Congress, his Generals on Iraq, the Tea Party, the states on immigration/healthcare, even a portion of his party,etc. Now we see him desperately making policy decisions that border on amateurish. Ignoring his Generals' call to maintain a presence in Iraq at a time when Iran is increasing activity there and the Turks/Iranians are both in skirmishes with the Kurds he calls for the pullout of all American troops. His EPA is issuing regulations to enforce his energy policies he cannot get passed by Congress. He continues to shell out money to foreign energy companies creating no jobs in America. He now announces that he will take on the role of mortgage refinance for people underwater since the Congress will not take action-- thereby usurping more of their power. He has virtually disappeared on actions to punish Iran for their planned attack on the US and on a Syrian strategy with Assad. By taking little involvement in Libya and Egypt he is now faced with two countries in chaos with unpredictable future governments. By the end of this Presidency the US could easily be faced with a Middle East governed by radical Muslim governments surrounding Saudi Arabia, Jordan and Israel. Every time Iran gets away with international meddling in US affairs and military operations the radicals gain momentum. It is only US money to the military that keeps Pakistan and Egypt in fragile check. The Saudi's will soon find themselves alone facing a threatening Iran if the US does not step in soon. And, this President is so anxious to get reelected that he is backing down to the Biden strategy of Drones only and hoping that a weakening Europe will fight the battles. While China and Russia, like buzzards in the treetops, await the coming carnage. Secretary of Defense, Leon Panetta warns of the Chinese military build up. As we sit down with the North Koreans to get our 5500 soldiers bodies back after 60 years the Chinese are visiting their Memorial in North Korea to honor their soldiers killed by Americans there. Competition or coincidence? With Gates gone let us hope that Panetta continues to bring strength to out position. And, that a desperate President does not slip back to the campaigner we saw in 2008 this time giving everything to every one instead of just making promises. The Republicans in Congress and several members of the Democratic Party are now in full damage control. His appearances at campaign stops have even been rejected by Democrats in some locations.

What the Administration's Amateur Operations really cost us:Steve Chu (http://en.wikipedia.org/wiki/Steven_Chu)Secretary of Energy. Whatever the politics, this was a real genius and Nuclear Power proponent. If Obama would stop campaigning and let the real talent speak; he might accomplish something. Chu's ironic comment in comparing Coal Fired Plants to Nuclear;"higher radiation levels emitted by coal plant";just one example .
It's people like Chu that should be speaking on 'Global Warming Strategies'and sit the politicians down.

'LOAN GUARANTEE'(label):Just a sidenote to define the Administration's use of the above terminology. Make no mistake; these are Direct Loans. The word 'GUARANTEE'is the method the Gov. uses to have one Dept of the Treasury "guarantee" the 'loan' by the other Dept. The DOE has been given full loan approval authority and the Treasury passes it around and out the window.
Although the DOE was advised by the Treasury to seek DOJ clarification,concerning 'Subordination of Gov loans'; they chose not to. 'Head' of DOE has since 'made a beeline' out the door.

MORE ON PROTESTS and THE ECONOMY---
I just returned from another trip to Las Vegas. Since they were holding the Republican debates at the hotel next to mine I got a chance to meet some of the Tea Party and the Wall Street crowd. Interesting in that in some ways they are on the same side and despite differences in appearance and age they did not spend much time arguing their cases with each other. The short of it was that my impression is that the Tea Party are mostly seniors scared to death that they are going to lose their Social Security and Medicare Benefits. Those make up most of the ones who come out and picket as opposed to those who want smaller government and less debt. As for the Occupy Wall Street crowd they are basically the young people with little to offer an employer. They are pierced and tattoo’d young adults who have little understanding of what they are protesting but for the most part it is a combination of the establishment(banks & wall Street Companies), no good jobs, environmental issues and loss of government support. It was really a show by the people who feel powerless to control their own destiny—the far right and the far left—with the vast majority of Americans in between. In a way it is a lot to do about nothing in particular(unless you are one of them) blown sky high by the media. As for Nevada. Very tough climate out there now. Las Vegas looks a bit dingy and less glamorous. Lots of unemployed Mexicans handing out hooker solicitations every inch of the strip. Business people seem very disappointed. And, I noted that while I was there Steve Wynn went on the air and told Nevadans that Senator Reid hung up on him when he was trying to discuss policy with him. He was very tough on the Administration in that interview despite his vows to be a Democrat and Union supporter.

FROM THE SEARCH INDUSTRY: Perhaps more important for you to know, my search firm owner friends from across the nation are seeing the same trend that we are seeing: interviews are declining and hiring is slowing. The only real industries to be improving are the oil and gas industries, the digital phone companies and some healthcare hiring. A big trend reported by our contract staffing companies is the move for employers to reduce their full time staff who receive benefits and move to contract hires who are not subject to benefits or unemployment taxes. These workers are known a permanent temps. They work full time for the firm under contract from the staffing company—similar to consultants. This keeps the employers from having to pay for their medical benefits, social security, unemployment taxes and does not affect their unemployment rates when they lay them off. It also makes them much less likely to face union pressures. You can see the result of government programs which business leaders do not favor—they find ways around them. Unfortunately, government spends little time listening to business leaders except when they need election funds. The result is that government programs often have a negative outcome relative to what they are trying to accomplish.

On GREEN policy---

EU bails --US pays. Spain has decided enough on subsidizing the solar energy industry. This EU model that Obama copied in justifying his green solar industry development is bailing. The result is that the EU market for US solar panels is gane and already we are seeing more of the US solar panel manufacturers in deep trouble. These are the guys that Obama loaned the money too. Billions more headed for default. Meanwhile China sells cheap solar panels to US companies who install them in places like California where they sell not because they are economical but rather because they are subsidized by federal tax credits. Result: US taxpayer left holding the bag.


Keystone Pipeline Project:

I just finished a meeting with CANADIAN STAFFING COMPANIES WHO gave me the lowdown on the Oil sands projects in Canada. There are currently 2 major plants producing oil from the tar sands. The oil is shipped to ILLINOIS where it is refined and then sold to both Canadian and US Companies. Who do we know who is interested in ILLINOIS welfare? That piece was completed in 2009. Now the XL extension is up for approval. This project would produce 20,000 direct jobs and an estimated 100,000+ indirect jobs. Obama is in the hotspot on this project with environmentalists demanding he clean up the planet and deny it while 22 Democrats join with Republicans AND his own job council in support of it. Unions are demanding it be passed. But, Hillary's STATE DEPARTMENT is suspected of delaying it. The idea behind this move is it will deliver more oil to Oklahoma and Texas for US production of gasoline and fuel to replace caol in electric plants. While this oil is not exactly clean it burns far more cleaner than coal and will help Obama justify the green application. Of course the Coal producing states are not happy either as they already suspect the President has a strategy to reduce the use of coal in the US. Along with this pipeline of oil comes more natural gas another sticky issue for the President. In his haste to get us to the green solar and wind industries he has ignored the economic benefits of a midterm strategy that includes the development of North American natural gas, clean coal,domestic production and Canadian oil sands exploitation which produce cleaner fossil fuels while the economics of alternative energy systems emerges. 7 more of these plants are beginning construction. Each plant will employ 15,000 more workers. And produce enough oil to help the US and Canada significantly reduce oil imports. Failing to approve this pipeline will only inspire the Canadians to sell the oil to China and India. In this way it will be used against American industries and it will b burned no matter what with far fewer safeguards than if we use it. This is a political decision due in December that will have tremendous implications on the President's reelection. Approve and he slaps the face of the young environmentalists as well as West Virgina and Pennsylvania coal intstries. Deny and he goes against the will of many of his party, his jobs council and US Union leaders. Interesting that the dicsion comes AFTER Illinois got theri piece of the Pipleine completed. Oklahoma and Texas--does he care? One of the reasons Canada is prospering and has low unemployment? They are exploiting their natural advantages. Not handicapping them.

Have a good laugh. Following 'Link' leads to Susan Anderson,counsel for the DOE, MEMO regarding reinterpretation of LAW. The statute in question,US Code 1703(d)3, prevents 'subrogation' of Govm't loans.

http://www.morrisanderson.com/resource-center/entry/HEAVYWEIGHT-FIGHT-ON-SOLYNDRA-LOAN-RESTRUCTURING-OBAMA-AGENCY-VS.-OBAMA-AGE/

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