Post Office Losing Billions: Here Comes $1 Postage Stamp

The U. S. Post office says it lost $2.8 billion last year and is expected to lose more this year. Next month postage stamps will go up to .43 cents per one ounce letter. Other countries have privatized all or parts of their postal system with mixed result. Package and express delivery companies like UPS, FED EX have cut into USPS’s monopoly as has email and telephone bill payments. Private companies have suggested they would buy or lease the ability to deliver mail but that’s been resisted but, the postal worker’s union consistently puts the kibosh on that idea..
The USPS’ mail volume dropped 5.2 billion pieces last year and could be down from 10-15 billion pieces in 2009-2010.
In recognition of its dodo bird status last week, the post office said it planned to offer early retirement to 150,000 workers and is eliminating 1,400 management positions and closing six of its 80 district offices across the country in cost-cutting efforts. Post Master General Potter said he expects 10,000 to 15,000 workers to accept the early retirement offer.
The post office claims it has cut 50 million work hours over the past years, stopped construction of new facilities, frozen salaries for executives, began selling unused facilities, has cut post office hours and threatened to end 6-day a week mail delivery.
By 2012 a letter carrier can earn six figure salaries with generous benefits and retirement bargained for in the latest union contract. Long seen as the temple of patronage hiring and certainly an earmark target as members of Congress are fond of raiding the US Treasury to build new post offices and name them for themselves.
The Post Office operates 200,000 vehicles and a penny increase in gasoline cost taxpayers $8 million and you can bet gasoline and diesel prices are headed up again.
The post master general has been rumored to be paid $800,000 a year. He says that’s not true that his salary is $263,575. He said the news reports also counted his retirement fund, the cost of his security detail and a $135,000 bonus which he would be paid over 10 years after he retires. Regardless that adds up to a bureaucrats bundle
The bonus is based on improved delivery rates and customer satisfaction, he said. Under the current financial conditions, Potter said, he would not be eligible for a bonus this year. The USPS has been criticized for paying millions in so-called heartbeat bonuses to tens of thousands of managers — heartbeat meaning that if you have one you get a bonus.
Carolyn Gallagher, chairwoman of the postal governing board, said postal executives are paid only a fraction of what executives in similarly sized businesses receive. But, those businesses have to make a profit to pay anybody anydhting. The USPS is a proved, prolific money loser.
The postal union is one of the most powerful contributing millions to politicians and turning out masses of “volunteers” to influence elections.
At the current pace and rate of postage increases the costs to mail a one ounce letter by 2012 will exceed .50 cents and one dollar before mid-century. Analyst compare the USPS troubles to those of the nation’s railroads.

Do We Really Need To Raise Taxes?

Raise Taxes and Cut Services? Why Not Stop Unneccesary Bailouts, Unnecesary Wars and Unnecessary Interest Costs Instead?
House majority leader Steny Hoyer - a close ally to President Obama - says the U.S. needs to raise taxes and cut spending .
As Agence France-Presse reports:
The United States must embrace a blend of tax increases and spending cuts to rein in its deficit or face a potentially crippling debt crisis like the one in Greece, a top US lawmaker warned Monday.
"It is enough to look across the Atlantic at Greece's extreme economic crisis and understand: It can happen here. If we don't change course, it will happen here," said Democratic House Majority Leader Steny Hoyer...
"It seems to me that the only solution that can win the support of both parties is a balanced approach: one that cuts some spending and raises some revenue while avoiding extremes in either direction," he said.
Of course, many others have warned of the massive debt overhand in the U.S. as well.
But why aren't our government "leaders" talking about slashing the military-industrial complex, which is ruining our economy with unnecessary imperial adventures?
And why aren't any of our leaders talking about stopping the permanent bailouts for the financial giants who got us into this mess? And see this.
And why aren't they taking away the power to create credit from the private banking giants - which is costing our economy trillions of dollars (and is leading to a decrease in loans to the little guy) - and give it back to the states?
If we did these things, we wouldn't have to raise taxes or cut core services to the American people.

The Fine Art of Shorting (As Demonstrated by a Bear)

The following picture (source unknown) is worth viewing to take in the exquisite detail. It shows the proper bearish trading technique, as demonstrated by a master practitioner.

We can make a few instructive observations here:
~The bear is patient and relaxed... not in any sort of hurry.
~The bear has taken note of favorable general conditions (the onset of spawning season).
~The bear has positioned himself in an optimal spot.
~The bear lets his lunch come to him – not the other way round.
A wise market bear does much the same thing. He patiently waits for investors to bid up a stock, an index, a commodity or what have you when general conditions (and the charts too) do not justify the hope of a higher price.
In this manner, the "hopers" do the hard work, like salmon blindly thrashing and struggling their way up a waterfall. And the reward for all this struggle? The bear’s waiting mouth.

Fannie And Freddie Still More Expensive Than Bernie Madoff...............

Speaking of those little green pieces of paper, Fannie Mae lost 72 billion of them in 2009, the pathetic government-sponsored enterprise (GSE) announced late Friday. That’s about $136,000 a minute.
Here’s Ian’s proposal for a new business plan for Fannie Mae: “Fire everyone except one janitor. Pay him to shovel stacks of $100 bills into the furnace all day, every day, all year. They’d save billions.”
Ian’s plan, of course, will fall on deaf ears. Fannie, in turn, will ask the Treasury for another $15.3 billion this week. Its total bailout tab will thus exceed $76 billion. For the same price, the Treasury could own outright a tiny little energy company like Conoco Phillips.
Fannie’s debt-addict loser of a brother Freddie Mac posted a smaller $21.6 billion loss last week too, if that makes you feel any better. He must be in recovery, too.

Water Isn't Everywhere...........

“The world may be running low on its most precious commodity -- water.” This is a theme Sound Of Cannons has been following for awhile. “This map shows water scarcity projections for the world in 2025. Large chunks of Australia, Asia, Africa and North America are expected to have severe water issues. Credit Suisse estimates that by 2020, 37% of the global population will face severe water stress.
“The problem is unrelenting demand for a finite resource. Since the 1940s, the global population has tripled to more than 6 billion people worldwide. Over the same period, global water use has quadrupled.”

What Is/Was America?

The Idea of America
While in Argentina, I made the cosmic faux pas of telling my traveling companions that during my dozens of trips to the country, in the company of dozens of people, no one had ever gotten food poisoning. “This is not Mexico, after all,” I may have added with a dismissive wave of the hand.
Those words returned to my mind two nights later while clutching the sides of a toilet and reexamining the contents of my stomach through watery eyes. Though no one can know about these things for certain, and food poisoning can strike in any country at any time, I believe the problem came from an undercooked sausage served in a private home. But the source of my malady is irrelevant to the story, which now shifts forward in time by two days when I decided that enough was enough and asked my driver to take me up to the local hospital in Cafayate for a remedy to finish off the rear guard of the bug that laid me low.
The hospital in town is only about two years old, and I was pleased to find it spotless and well organized. As I was arriving unannounced, I was directed to the emergency room where a fee of $12 was levied for the visit. After just a few minutes’ wait, I was ushered into the doctor’s chambers for the customary checking of vitals by the nurse, followed soon thereafter by the arrival of the doctor.
As he was checking the stats, the smiling doctor asked where I was from, and when I responded, the United States, he threw out what I thought was a very interesting follow-on question, “So, when do you think we will live like you?”
Maybe it was just the inadequacies of my Spanish or the fact I was still feeling out of sorts, but I found myself unable to come up with anything in the way of an intelligent answer or even much of a snappy retort, so I mumbled something like, “It’s all about politics” and left it at that.
But on the way back to the hotel, I brought the question up with my driver, an intelligent and well-spoken young man with a great desire to do more with his life.
“You know,” I said, “the doctor’s question was a good one. But I don’t think I have a good answer.”
“Why?” he asked.
“Because it strikes me that the America he is referring to is an America from a day gone by.”
“What do you mean?”
“It’s like this. America is not a place, it is an idea. And when that idea was fresh, it was a revolutionary idea – one that literally changed the world. But with time, that idea has degraded to where, today, it is becoming only an echo of its former self. Now, don’t get me wrong. America is still a far better place to live than many places, but it’s a far cry from the shining castle on the hill it once was. And, I fear, it’s on a very slippery slope. “
While the doctor probably can’t appreciate it, though Argentina is far from perfect, it still offers a quality of life that most Americans can’t even imagine, especially if you have a few extra bucks in your jeans.
But talking up Argentina, or even talking down America, is not what I’m trying to get at.
Rather it is to ask, what has become of the idea of America? Put another way, who are we, and what do we now stand for? Those strike me as fairly important questions, at least if we want to set any sort of course for the future. Paraphrasing one of those who make a living giving out trite advice, “If you don’t know where you’re going, any path will do.”
The path we seem to be on today has no obvious signposts but is rather determined by the prevailing electoral calculations and knock-on machinations of the politicians and their symbiotic corporate sponsors.
Consider the matter of extending unemployment benefits now in front of the Senate. As you are probably aware, a Republican senator from Kentucky by the name of Bunning has been holding up legislation designed to provide extended unemployment benefits – benefits that now run for an unprecedented 99 weeks – a short-term stop gap measure until the next piece of legislation can be whipped up to assure the extended benefits are available through the end of this year.
Said Sen. Reid, D. of Nevada, on the topic of Bunning’s legislative stalling…
"Six times last week, Democrats asked to extend their unemployment benefits for a short time while they work on a longer extension," Reid said. "Six times, Republicans said no. They didn't just say no to us, that is members of the Senate. They said no to their families in their own states and all our states count on us to act when we need action. They count on us to respond in the event of an emergency. This is an emergency. The Republicans in the Senate are standing between these families and the help they need while these benefits expire and expired." Now, what I find interesting in all of this is not so much that a senator is standing in the way of the extended benefits – because even he is for providing them, just from a different pocket than the Democrats are proposing – but rather that there is zero real debate about the act itself.
Everyone in positions of power, Republican and Democrats and, I am certain, 95% of the public, believe without the slightest hesitation or reservation that the extended benefits should continue. And that, with passage a certainty, Bunning is nothing more than a stubborn and maybe even evil person for delaying the inevitable.
But why is 99 weeks the right length of time for the benefits to be paid, versus the 28 that was the norm prior to last year? And if 99, why not 199?
There has to be an operating principle underpinning this sort of decision, doesn’t there? Is it that every taxpayer has a civic duty, whether they agree to it or not, to pay the wages of those who lose their job and can’t readily find another? And/or is it that the government has a mandate to borrow money in whatever quantities are needed, regardless of the economic consequences on future generations, in order to soften the blow of a current crisis?
I don’t pretend to have the answer, because I confess to possessing almost no sense of the modern idea of America. But I’ve been mulling it over ever since the doctor asked his question.
As I see it, the idea of America – the idea that made this country the powerhouse it grew into – is that everyone should be free to succeed or fail as a result of their own efforts and not held back based on the circumstances of their birth. In England of yore, a man who was born a serf almost certainly died a serf. In America, there were no serfs, just fellow citizens free to pursue opportunity where they found it.
Today, however, the idea of America seems weighed down with a long legacy of well-meaning or strictly politically motivated legislation that serves to build barriers to opportunity seekers – by taxing away capital in order to spend it on vote-getting social programs or on a power-projecting military that aims to spread today’s tainted version of the American idea through the barrel of a gun. And by layering on mountains of regulation whose purpose is, purportedly, to level the playing field, but which in actual fact seeks its outcomes by pushing forward one group of citizens by disadvantaging others.
There are, of course, consequences to all these actions. Open-ended unemployment benefits reduce the urgency to develop marketable skills, just as a Social Security safety net reduces the necessity to spend less and save more, and universal health care reduces the sense that one should take extra care with one’s health.
There are no easy answers to these societal issues, because the workings of an economy do not include magic trees from which wealth and sustenance grow in sufficient quantity for all. And so, in the end, all we are left with are the operating principles of the nation… the principles that establish how the private and public sector should interact, ideally for maximum success. In the America of 1776, the principles that held sway set the country apart from all others and provided a model for success that was subsequently widely emulated.
But that was then, and this is now.
I think everyone would benefit from a clear restatement of the current idea of America, an idea that used to be encapsulated in the Constitution and the Bill of the Rights. Today, those documents and the principles they codified have been all but lost under a mountain of meddlesome and counterproductive legislation.
So, who are we? What are the guiding principles of this country? Are they likely to lead to renewed economic success or economic collapse? Is it too late to return to the robust capitalism that made the country what it was? Or should we dismiss the idea of America that held sway in 1776 as outdated and look instead to a brave new world where the best and brightest set the course?

The Last Line Of this Article Is As Scary As Anything Clive Barker Ever Wrote.....

GURU OUTLOOK: PAOLO PELLEGRINI
2 March 2010
This week’s Guru Outlook brings you Paolo Pellegrini. Although he is not the most well known of investment gurus Pellegrini has built quite a name for himself in recent years. Before founding his own hedge fund PSQR (a play on PP Squared) Pellegrini was John Paulson’s right hand man at Paulson and Co. Of course, Paulson and Co. made waves during the sub-prime crisis when they made billions shorting the market during the crisis. Pellegrini was instrumental in devising the strategy. Like Paulson, however, Pellegrini wasn’t a one trick, short the market, pony. In 2009 he crushed the market with a 61.6% return in his fund after he made big bets on a rising oil market and a tanking treasury market.
So where does Pellegrini see the market going now? In a recent letter to shareholders he said:
“the structural problems that precipitated the Great Recession around the globe remain unresolved”
He says we are essentially papering over the problems with more debt. We are simply adding more debt to a debt-laden world while China adds more exports to a saturated market. He says the problems in Europe are a harbinger of these continuing issues. Thus far the massive stimulus has been successful in jumpstarting the global economy, but is nothing more than a temporary respite from the longer-term structural problems that remain.
Pellegrini’s favorite trades in 2010 are the following four:
Short US fixed income
Short US equities
Short US dollar
Long commodities
The short trade on fixed income is a reflection of the likelihood for higher yields as investors grow increasingly fearful of the U.S. as a steward of its debt. Pellegrini believes demand for treasuries will decrease in the coming years.
In terms of equities Pellegrini says valuations are becoming stretched as organic growth fails to match expectations. He also believes higher taxes could ultimately be a net negative for equities.
Pellegrini is short the dollar based on the expectation of more stimulus. He predicts that policymakers will come back to the taxpayer asking for another handout as they explain their first stimulus plan was not a failure, but simply too small. He says the dollar will “plunge” if this occurs.
The one sector of the market Pellegrini likes is commodities. He says they remain attractive long-term as China exports inflation and demand for hard assets remains high.
One of Pellegrini’s primary concerns is the stimulus based growth occurring in China. He says China is one of the greatest risks to the recovery. He says:
“I was in China late last year. One particularly enlightening meeting was with the top official of a major bank, who pointed to all the empty office buildings surrounding his own, observing that his country’s stimulus money would have been better spent paying people to stay home”
Pellegrini expects China’s CPI to exceed 5% in H1 2010 due to excessive demand from the stimulus programs. He says China will respond aggressively with policy measures throughout 2010. He expects the equity market to respond negatively. One of this favorite China investments is the Yuan. He is long the Yuan based on his “impossible trinity” trade:
“a country can control its interest rate, its exchange rate or its capital account – but not all three. If the US keeps interest rates low, the only way China can raise rates is by first addressing the currency undervaluation. Otherwise, it would just attract hot money inflows, as it did in 2006-2008. Indeed, it is our expectation the the experience of that period – when gradual CNY appreciation was chosen – will lead China’s policymakers to prefer a more aggressive, upfront, one-off revaluation this time around.”
In the US, Pellegrini says we are coming face-to-face with the critical structural problems. The end of the stimulus and the Fed’s programs will mark an economic top in Q1 2010 and set the stage for economic weakness in the latter half of 2010. He says the headwinds we face are likely to occur sooner rather than later:
“Eventually, there must be a reckoning. In our judgment, that day may be much sooner than the markets suggest.”