The following articles were sent to me by a friend who is a former banker. Disregard the references to Democrats, Republicans, or Individuals and just read to get the ideas. Make sure you are sitting down as you get “the rest of the story.”

There’s an interesting article below and some background in the attachments. This all takes a few minutes to read through, which is exactly what the liberals don’t want anybody to take the time to do.

Clearly the biggest financial holes sucking in money have always been Fan and Fred, but they were never addressed as part of any of the banking regulations, due to the political risk. Prior to it just being political risk, there were millions and millions of dollars of compensation at risk for the folks who ran Fan and Fred. Mr. Rains was the single largest contributor to the Obama campaign and his compensation was directly tied to the volume of loans that took place at Fan. He walked away with tens of millions of dollars, for having taken his company into a fate far worse than bankruptcy. He was not prosecuted, nor even vilified, because he was doing what he was being enabled to, by the democrats in Congress.

The articles below provide an interesting overview of what really happened to this economy. It has all been blamed on greedy Wall Street bankers and none of the blame in the mainstream media has fallen back onto the liberals in government. The process was put in place by Jimmy Carter and then really kicked into high gear by Clinton and then into overdrive by a Democrat controlled Congress, with Bush not being able to do anything about it. He was unable, because the critical changes were not passed as new laws, which he could have vetoed.

Fan and Fred were begun in the 1930’s to ensure liquidity in the mortgage markets. They began to be bastardized by Carter and continued to be, up until their collapse. Even now, the Dems want to essentially pay off all low income mortgages with our tax dollars, in order to ensure a voter base for the future. It’s so absurd that it would be laughable if it weren’t so incredibly destructive to us all.

If you know of anyone who is still an Obama supporter and is also able to read, please pass this along to them!

And now, you know the rest of the story.

Mortgage Article (PDF)

Banking Article (PDF)

ACORN Housing (PDF)

Also, feel free to further educate yourself by copying and pasting this link into your browser:
http://www.hennessysview.com/2008/09/15/franklin-raines-criminal-enterprise-and-barack-obama-his-accomplice

But beware….a powerful lame duck Democratic congress could steamroll insurmountable legislation through from November to January. All of the bills passed in the last two years will require multiple years to restore business and employment back to the previous higher levels, unless they are overturned.

Be prepared, as an investor, to change your thinking pattern of investing over the next few years because of the following:
• The large monetary and fiscal stimulus that was previously applied is running out of steam. (Most of the money was used to shore up union jobs and pensions. Very little was used for any new jobs.)
• Tightening of financial conditions.
• Leading indicators slowing down.
• Public and private deleveraging.
• Higher taxes, more regulation, trade tensions.
• European countries have slowed economically.
• Corporate profitability blossomed due to reduced expenses, but that is over. Consumer demand has fallen off, so corporate profits will drop.
• Deflationary pressure is coming on not just for prices but also for wages.
• Since fiscal and monetary stimuli have been used to the full extent, then another financial crisis will only lead to excessive money being printed.

Watch for the stock market to move sideways for a while with periodic deep drops. Gold will stay steady. Look at dividend paying stocks and short term bonds. By all means, begin moving into tax free, not tax deferred investments that provide guaranteed protection against loss with upside participation.

Watch the stock market during the week before the election. It will tell you which party will win.

Stores today are cleverly set up and well-merchandised. Manufacturers and food producers fight for eye level space on the retailers’ shelves. They set up elaborate, eye-catching displays. All of this is designed to one specific end. Get the shoppers to spend. In addition, there are also companies that place merchandise in the stores specifically to induce impulse spending.

Consumers may take several steps to spend smarter, reduce the number of trips to stores, and overall spend less money on household and grocery items. Many shopping techniques are habitual. For instance, we frequently go to the same stores, on the same days, buy the same products, and do not use a list or comparison shop.

Economizing on grocery and household items takes imagination, and requires some financial self-discipline, a bit of practice and a little time to develop new habits. It requires full family participation. Having one spouse a saver and the other a spender provides no progress unless the spender ceases to be a shopper. It is also important for children to learn and understand the importance of spending smarter, comparing quality, price and value, in addition to saving to buy the bigger items without borrowing. The NCFE offers the following spending tips before your next trip to the store:

• Use a list when shopping

Put anything you want on the list, but do not add to the list once you get to the store. Using a list will help plan for your needs in advance, so take advantage of sale prices and avoid impulse purchases.

• Go grocery shopping alone after a meal

If you go shopping hungry or with another person, you are shopping for more than one appetite and the result is always increased spending.

• Watch for store ads

Ads are in newspapers, your mailbox and flyers distributed in the stores. Check for sale prices on the items you regularly purchase. Compare prices with other stores, especially those you do not normally visit.

• Pay special attention to sale days

For example, some stores have no sale prices in effect on Monday, traditionally a busy shopping day. Carefully plan purchases, noting on the list which items are sale priced and items where a coupon can be used.

• Always spend cash

Take time to get cash before going to the store. Nothing impacts our mind like taking cash from our wallet or purse. Many people who use credit cards rarely know how much was actually spent, until the statement comes. Many people who write checks simply do not take the time to calculate the balance and have no idea what is left over. Paying cash causes us to think ahead and plan for tomorrow’s needs.

• Take advantage of coupons and rebates; they do add up

Regularly shop at stores that double coupons; take time to watch the papers for grocery coupons. Look for items on the shelf that also have coupons included. It only takes about twenty minutes a week to review grocery ads, clip the coupons and plan a weekly or bi-weekly grocery-spending trip.

• Always shop by the unit price at the stores

In most states, retailers must by law post the unit cost on the shelves. It used to be the larger the pack – the better the price, but that is not always so these days. For example, a 50-cent coupon, doubled on any size of soap detergent could make the smallest size the most economical in terms of least cash spent. Many times, you may get a box of a less expensive detergent, such as the store’s brand name or a generic equivalent for close to nothing, because of the doubled coupon savings.

• Avoid buying plastic bags

Most stores give these away free. Plastic bags are available in the produce and meat sections. Separately bag each item and save them for re-use. When asked if you want either a paper or plastic bag, ask for paper inside of a plastic bag and you will have an ample supply of ready-made garbage bags.

• Avoid buying cleaning aids, cleansers, etc.

They are very costly and prices vary greatly with the brands. Some companies market a cleanser (and now specialty wipes – what a waste) for virtually every type of household project. The best cleanser in the kitchen is simple soap powder in ammonia. No need to buy a brand name; ammonia is ammonia. If you want it soapy, then add some detergent. Another valueless item is dish soap promoted to be gentler to hands or cuts grease better. If your hands are that sensitive, use the longer lasting rubber gloves and save money on detergent by using generic brands. Hot water and any detergent will cut grease.

• Plan meals in advance

Keep in mind wise use of leftovers or freezing for later use when purchasing meats, etc. and making pasta dishes, for example. Consider buying meat items that you use regularly in bigger quantity, freezing for later use those portions not needed that week. This can save up to 20%!

• Avoid prepared items

Cereals, breads, desserts, juices, beverages, etc., mixed and prepared at home are always a better value than pre-packaged items. The same is true for pet foods, and many experts agree dry pet food mixed with water is better than canned food.

• Be cautious about adding non-food items to the list

These include health and beauty items, paper and plastics, utensils, brooms, brushes, film, etc. These items have the highest profit margin for most grocers, which is exactly why they are prominently displayed in the stores. Usually, a better value can be obtained at discount drug stores.

• Stick to the list and plan in advance

Purchase to take full advantage of sale items and two-for-one deals (if the price is not inflated to compensate). When possible, shop the outside walls and stay out of the aisles. Most food stores situate the four basics (produce, meats, dairy and breads) on the walls. They most often place all the cookies, cereals, beverages, canned goods and the nice-to-haves in the aisles.

• Check the checker

Note the prices as you select items and then make sure the same price is posted at the checkout. Check the register tape again after leaving the store, unintentional mistakes are often uncovered, especially with large purchases. Many times a sale price is listed in the store, but not reflected at the checkout.

Finally, if you are trying to spend money more wisely, reading this once will not suffice. Place it in the drawer with coupons and reread it before each shopping trip. You will save from $600 to $2,000 per year, depending on family size and budget allocation.
Source: Institute of Consumer Financial Education (ICFE)

Business people are not hiring due to lack of demand, uncertainty about increased regulation, potential burdened costs of a new healthcare system, and most importantly, a major increase in taxes for everyone starting January 1, 2011.

Any improvement so far in the 2010 GDP is nothing more than purchases being made now in advance of tax increases in 2011.  Therefore, 2011 will be another down year in GDP, possibly greater than the 2008 and 2009 drop.

Here are some statistics on how much in Federal Income Taxes are being paid.  Keep in mind taxes are going up in 2011, and the system is now set where 55% of Americans are paying taxes so that 45% (who do not pay taxes) are receiving benefits.  The administration’s plan is to move it to where 45% will pay taxes to support 55%.  This is going to lead to an upside down pyramid that will fall over.

MORE PAID BY THE TOP GROUP – In 1980, the top 1% of taxpayers paid 19.1% of all federal income tax (FIT) and the bottom 50% of taxpayers paid 7.1% of FIT.  In 2007, the top 1% of taxpayers paid 40.4% of all FIT and the bottom 50% of taxpayers paid 2.9% of FIT.  Thus since 1980, the top 1% of taxpayers has gone from paying nearly 3 times the FIT of the bottom 50% of taxpayers to nearly 14 times as much (source:  Tax Foundation).

There are many solutions to solve our economic problems…(1) cutting taxes always brings more money into the Treasury; (2) real spending cuts in all areas (see what the new Governor of New Jersey just proposed); (3) decrease regulations.

May I suggest you read a new book by Arthur Laffer, Return to Prosperity.   Laffer has been on the President’s council of Economic Advisors, was responsible for “the Laffer Curve,” and has consulted businesses and governments worldwide.  I think you will accept his flat tax proposal that he has advocated for 30 years.  Now, you will accept the idea if you pay taxes…if you do not pay taxes and receive benefits from the government, well, you will not embrace it.  It is time to do something quickly before it is too late.  Ah yes, discipline or regret!