Idol Chatter

I was just reading the following over at the Washington Post:

The Treasury on Thursday offered six life insurers capital infusions under the Troubled Assets Relief Program. The precise terms of the proposed investments have not yet been negotiated.

All of the life insurers that received the offers have stock that is publicly traded, providing a constant measure of investor confidence. They had to apply for the money by last November, and some took other steps to shore up their finances during the long wait for Treasury approval.

Now it appears that some companies including Ameriprise Financial will be declining the funds.  Decline free money?  Now on the surface that may not seem very logical but like most things in life, the funds come with some hidden costs.  The Washington Post article speculates that one main consideration may be that the funds come with restrictions on executive pay.  Now that may be a factor but frankly I’d have to suspect that possible dilution of the company’s stock value is a bigger concern.  After all, if stockholders see their stock prices decline, they are more likely to vote out the CEO and other key officers.

What is more interesting is that most of these companies are deciding they just don’t need the money because they are not financially strapped.  If that is the case, why are they being offered the money?  If the Government has funds to give out, what about more ways to send funds to small businesses which are likely to be decimated in numbers by the time this economy turns around.

The current administration continues to help out the industry giants who severely mismanaged funds while almost completely ignoring the Mom & Pop shops who continue to face squeezes on their credit lines and credit rates.  This at a time when revenues are down is just going to kill many businesses and further increase this nation’s unemployment rate.

If only some of that attention and financial assistance that big companies are being offered who don’t need it were directed to small business, we just might see this economy pull out a bit faster.

Is this really news?

I’m still wondering about the so called racy photos many of which are tamer than what you can easily find in a Sears catelog in the ladies panties section.  I mean come on.

But the pot on this is deep and being stirred by many.  There have been accusations that the photos were dug up and released only because of Ms. CA’s stance on gay marriage.  When asked if she personally was for it, she politely said no.  Now many of us feel that this shouldn’t even be a question - that gay marriage isn’t any threat to the fabric of our society and allowing it provides a clear legal protection to loved ones.

But regardless of how you feel, she was asked and was courteous in expressing her honest opinion.  Even when it was a gay man asking the question and even though even she must have considered that to answer with how she really felt could cost her the Ms USA crown.  Now Ms. CA came in as runner up and the rumors flew that she would have won had it not been for her answer.

After losing the top slot, she was asked if she felt her answer led to her losing the USA crown.  She not only said yes, she lent her name to an organization that is against gay marriage.  Many of the Ms. CA contestents who obviousl did not win, started to bad mouth her including allegations that Ms. CA had a boob job.  Now that doesn’t seem to be the spirit of the competition.

Then the photos showed up.  Smear job?  Who knows but all the media attention then forced Mr Trump, owner of the franchise, to render a verdict.  Either way there was bound to be ‘controversy’ if only be the media who need a constant feed of news to report even if it’s not very newsworthy.  So tomorrow we’ll get a few more words and then, with any luck, this will go away.

Then maybe we can focus on more important issues like the pending insolvency of both social security and medicaid.  Who’s covering that?

We no longer need to hold our breath, the bank stress test rating the top 19 banks came out today.  While heralded as all 19 passing, 10 of the 19 need to raise significant capital over the next few months.  Moreover, there are no shiny rainbows to this report.  Considerable new losses can occur.

In a worse case scenario, if unemployment continues to increase coupled with the loss of equity in housing markets, total loan losses could hit 9.1% of total outstanding loans.  To put this in perspective this is a larger loss rate than banks had during the worst of the Great Depression in the 1931-32 time frame.

Unemployment does seem to be key here.  So the question then becomes whether President Obama’s plan will help the unemployment rate.  His own verbiage has changed from one of creating new jobs to keeping jobs to keeping govenment jobs.  Perhaps even he sees that the job creation isn’t happening as he gave American’s hope for.  Even Democrats are talking in hushed tones of a ‘jobless economic recovery’ that if left unmanaged could slaughter them in the 2010 elections.