So what do you guy's and gal's think about an all out humanitarian effort by the U.S. to aid the decimated little country, after yesterday's 7.0 earthquake ??????

With deaths maybe going into the hundreds of thousands!


Phil

I'm figuring on contributing.

If southern CA got hit with the big one, would you want help?

My initial question is from where is the money to come? We're essentially broke, so it's a legitimate question. Just add it to the bill I suppose, and default when it comes due.

Business as usual.

But, regardless, I'll still contribute out of my own pocket.

When disaster strikes, you do what needs to be done and figure out the details later. This isn't like bailouts and health care. People are dying.

it's another tragedy. they need humanitarian aid, for sure.

beyond that, two countries on one little island? how did that ever occur. D.R. has good building codes and little damage. Haiti is about demolished.

one piece of the puzzle is to combine those two countries on the one island, and let D.R. begin the reconstruction effort, imho.

I'd say it's one of the things we do best,.....

Where are the Saudi / Iranian airlifts,.... ?

....The Cuban ....?

... The Venezuelan .....?


.....Mexico ,...?

GTC

for the Religionists amongst us, this might have occurred as a way to point toward USA as a true helper, while some of the others, (Cuba, Venezuela, Carribean Islands, etc), are perhaps well intentioned, but not set to Assist.

makes me wonder if this is a sign that Haiti, as an entity should no longer exist in the future, but should be combined with DR for the betterment of all?

Mike,

With all due respect, I disagree that we are broke financially as a country. Morally yes, financially no. I don't like our debt levels at the point they are now and what is projected any more than you do, but you need to compare debt to equity and not only current debt dollar amounts.

It paints an entirely different picture.

Haiti would logically be combined with the DR, but I doubt the DR wants them. Why would they want to inherit 9 million poverty stricken people along with their moral degeneracy?

any thing such as a solution like that would likely require a post-modern solution?

maybe move as many Haitians to other locales, ..the DR, Mexico, Cuba, Puerto Rico, etc, and then turn the countryside into a eco-tourism hotspot for the rich Nations. kinda like parts of Madagascar?

Utilize private enterprise and investments to restore the pre-Haitian eco-system, and return a type of green paradise on the existing degraded Landscape. Eliminate all Goats, and other exotics, of course.

send UN aid to DR, to pay for, and project Leadership.

Job done, back to the Cave, with a Solar front.

Rock Chuck - a better question is, if California got hit with a big one would you expect help from any of the Latin American countries?

An honest question. How much help did Louisiana get from outside the States after Hurricane Katrina?

Jim

surely, someone was sending Volunteers to drive the school buses in NOLA, but alas, they couldn't get there in time? sorry, off-topic.

Sure lets send a bunch of cash that way,we have extra right?? but not help homeless people,or women with children living in cars,or vets that have no where to go and are suffering from tremendous medical and mental problems but aren't getting the help they need...yeh let's do that...Were loaded... why help our own citizens right?? Let's take care of our own, who desperately need our help first.. Not saying it's not a tragedy,but think about it.

well, let's endeavor to save as many human Souls as possible, in this immediate emergency.

but, beyond that, who can step up to the plate, and consider that little Carribean Island, and it's needs?

Should it be re-addressed, with the appropriate Local Leaders involved?

an Island Nation, divided in two, with risks from Hurricans, and apparently EarthQuakes, and over-population?

is there an Opportunity presenting itself here?? who's Creative and Imaginative? where's the profit, while re-storing the Eco-System??

What equity? We have a debt of over $112 Trillion and a GDP of only $13 Trillion. We have no reserves, except the gold supposedly in Ft. Knox. With current expenditures exceeding income by 40%, and our currency debt based, where's the equity? The 8200 Tonnes of gold purportedly in Ft. Knox won't cover even the public portion of the debt, and if you're talking about public lands, buildings etc, their value would have to increase exponentially to cover the entire $112 Trillion. Even if you confiscated the entire wealth of the nation and cashed it in, it still wouldn't cover the debts and unfunded liabilities, so I ask again, what equity?

Think of it as an all natural form of retro active birth control.

Jim

While certainly the building codes are basically nothing, that quake was only 10km deep so it wouldn't spred out that far.

Yes there are many in this nation in need. However in this country the resorces are available to anyone who needs help and is willing to ask or look for them. The people in Haiti had little before the quake and are now in desparate need of the most basic things like survival, food, and water. I'm sure we can all dig a little deeper if we need to and those who think the need is greater here at home as opposed to Haiti or anywhere else for that matter..well feel free to step up to the plate. 163bc

Beyond emergency aid to Hati, this pretty much sums up my opinion.

http://www.escapeartist.com/efam27/Haiti.html

If the people, after all these years, can't get there collective heads out of their azz's, then maybe they should be allowed to rot. These little country full of ignorant savages are like ticks on a deer, they both suck the life blood out and poison the host, and we are the biggest host.

Countries are not unlike species, if they can not adapt and grow, they go extinct. It should be allowed to happen. Plucking welfare country, as far as I'm concerned, wean it off the teet, it either thrives or dies.

Lets help them through the current crisis, but not to rebuild their city, and tell them that's it, not another nickel from the U.S. Government. lets stop propping up these savage nations.

Good article, and right on point. Unfortunately, much of what he's saying happened in Haiti, is happening here in the good ol' USA.

Regardless of the Haitian situation at large, we should help out as best we can. They are our neighbors and it's simply the right thing to do.

Besides, I don't want China or someone else giving lots of "aid" in return for business deals. I'm thinking of oil drilling, military basing, etc.

Who would "move" Hatians to the D.R? It's not two nations on the same island, it's two nations on the same island. Think Scotland and England.

Too late. They're already there along with the Brazilians and others as part of the UN "Peacekeeping" force.

I suppose printing up a few billion more FRN$ to help our neighbors won't amount to a hill of beans in the overall scheme of our budgetary excesses, until the day comes when we have to sacrifice everything just to service all of the obligations we've incurred. Then I wonder how many will be as understanding and as helpful as we have been through the years. Damn few I expect.

Me too---I already do though various child funds but will now up the ante. Godspeed to the country of Haiti and the valiant efforts to the volunteers and military assisting with yet another natural act of Mother Nature....

I take back what I said about the Cubans,....guess there was a mob of their aid people there before the quake,....Doctors, etc.

God Bless em'

GTC

Is that a trick question?

Seriously people need aid.

I do wonder what percentage will be skimmed off the top? 50%, maybe more.

I'm all for immediate aid in food/water/medical supplies and rescue.

I'm not for pouring in money for years/decades (like we already have) to "rebuild" a country that wasn't built in the first place.

How about all of the federal lands, buildings, equipment, military equipment, mineral rights, etc... I am not suggesting that we sell any of those, but it is equity when you are analyzing debt for bankruptcy purposes.

Our current debt to GDP ratio is a little over 82% by last measure. This isn't the highest in our recent history. We have been in excess of 120% of debt to GDP in the mid 1900's. Japan, while not strong, has been running in excess of 200% debt to GDP for quite some time. They haven't gone bankrupt, have they?

You bring up gold reserves. Can you name any country in the world that has their currency back by gold? Where are you coming up with $112 Trillion in debt? Did you ad an extra 1?

When a natural disaster strikes like this then we need to do what we can to save lives and get them out of their immediate crisis. Incurring long term obligations, now that's a different story. I don't view it as a choice between helping foreigners in crisis vs. helping those at home in need. We have very, very few people in the U.S. in true need. If someone in the U.S. tells you that they don't know where their next meal is coming from then most likely they're lying. What we do have is a lot of people in "want" who our government has blown uncountable sums of money upon. Our government's unconscionable debts aren't the result of helping truly needy people, they're the result of trying to buy votes with the taxpayers money. Therefore it isn't a choice between spending on helping Haitians in crisis vs. Americans who need it. There aren't very many Americans who need it, but there are plenty who want it.

yep & yep

Mike,

Here is another analysis that you may be interested in. The average global credit rating of all countries is approximately 45 on a scale of 1 to 100 with 100 being the highest. Switzerland (no surprise) has the highest rating at 94. The United States is at 88 with puts us number 15 down from 13 as of March of 2009 according to Institutional Investor.

Saudi Arabia is at 72.4. Their estimated debt to GDP ratio is approximately 15% of GDP. One must ask why Saudi's "credit rating" is less than the United States when it appears that they are relatively debt free when you compare it to GDP. It must mean there is more to it than that. Right?

You wouldn't think they would have any debt, but they do. I have never cared for analyzing debt to GDP. I would rather analyze debt to tax revenues. That would be more akin to a person's personal debt load to their income. Which would help avoid a bankruptcy situation.

To analyze whether a person or entity is bankrupt, then you consider their debt to equity which leads back to my original post on this subject.

By they way, China's credit rating is at 74.1 which puts it currently at number 34 down from 33 the year prior. I think many would have thought that China was the world's financial powerhouse, but they are a greater credit risk than the good old USA. Doesn't hurt my feelings none.

SEVERAL charities have launched appeals in response to the Haiti earthquake. This is a list of some British charities.

To make a donation, people who choose to can contact any of the following organisations.

� ActionAid: www.actionaid.org.uk or phone 01460 238000

� Christian Aid: www.christianaid.org.uk/haiti-appeal or 08080 004 004

� Merlin: www.merlin.org.uk or 0207 014 1714

� Oxfam: www.oxfam.org.uk or 0300 200 1999

� British Red Cross: www.redcross.org.uk or 0845 053 5353

� Save the Children: www.savethechildren.org.uk/haiti or 020 7012 6400

� SCIAF: 0141 354 5555 or online at www.sciaf.org.uk

Also accepting cash and in-kind donations are the following sites: UNICEF (1-800-4UNICEF), Direct Relief, Yele Haiti, Partners in Health, Red Cross, World Food Program, Mercy Corps (1-888-256-1900), Save the Children, Lambi Fund, Doctors Without Borders, The International Rescue Committee, Care



In the wake of the devastating earthquake in Haiti on Jan. 12, 2010, many Americans are looking for ways to help by donating to a charity. Fraudulent charities will likely emerge trying to scam donations from well-meaning Americans.

Top 6 tips from Better Business Bureau | Top 4 tips from Oregon's attorney general

Press release courtesy Better Business Bureau

As immediate relief needs are assessed in the wake of the devastating earthquake in Haiti on Jan. 12, 2010, many Americans are looking for ways to help by donating to a charity. Your Better Business Bureau Foundation warns that -- as occurred following the tsunami in 2004 and Katrina in 2005 -- fraudulent charities will likely emerge trying to scam donations from well-meaning Americans.

"Whenever there is a major natural disaster, be it home or abroad, there are two things you can count on. The first is the generosity of Americans to donate time and money to help victims, and the second is the appearance of poorly run and in some cases fraudulent charities," said Robert W.G. Andrew, CEO of BBB serving Alaska, Oregon, and Western Washington. "Not only do Americans need to be concerned about avoiding fraud, they also need to make sure their money goes to competent relief organizations that are equipped and experienced to handle the unique challenges of providing assistance."

BBB Foundation offers the following six tips to help Americans decide where to direct donations:

Rely on expert opinion when it comes to evaluating a charity. Be cautious when relying on third-party recommendations such as bloggers or other Web sites, as they might not have fully researched the listed relief organizations. The public can go to www.bbb.org/charity to research charities and relief organizations to verify that they are accredited by BBB and meet the 20 Standards for Charity Accountability.

Be wary of claims that 100 percent of donations will assist relief victims. Despite what an organization might claim, charities have fundraising and administrative costs. Even a credit card donation will involve, at a minimum, a processing fee. If a charity claims 100 percent of collected funds will be assisting earthquake victims, the truth is that the organization is still probably incurring fundraising and administrative expenses. They may use some of their other funds to pay this, but the expenses will still be incurred.

Be cautious when giving online. Be cautious about online giving, especially in response to spam messages and e-mails that claim to link to a relief organization. In response to the tsunami disaster in 2004, there were concerns raised about many Web sites and new organizations that were created overnight allegedly to help victims.

Find out if the charity has an on-the-ground presence in the impacted areas. Unless the charity already has staff in the effected areas, it may be difficult to get new aid workers to quickly provide assistance. See if the charity's Web site clearly describes what they can do to address immediate needs.

Find out if the charity is providing direct aid or raising money for other groups. Some charities may be raising money to pass along to relief organizations. If so, you may want to consider "avoiding the middleman" and giving directly to charities that have a presence in the region. Or, at a minimum, check out the ultimate recipients of these donations to ensure the organizations are equipped to effectively provide aid.

Ask before giving gifts of clothing, food or other in-kind donations. In-kind drives for food and clothing-while well intentioned-may not necessarily be the quickest way to help those in need, unless the organization has the staff and infrastructure to be able to properly distribute such aid. Ask the charity about their transportation and distribution plans. Be wary of those who are not experienced in disaster relief assistance.
Press release courtesy Oregn attorney general

Oregon Attorney General John Kroger is warning Oregon consumers to be on the lookout for unfamiliar organizations soliciting funds for victims of the recent earthquake in Haiti. Scammers exploit current events � from fears about a swine flu pandemic to the sale of Michael Jackson memorabilia � to defraud consumers. Scammers will seek to gain access to credit card numbers and bank accounts in order to commit identity theft. Unscrupulous charities may also seek donations, even though only a small percentage the money will actually be used to help earthquake victims.

Many legitimate organizations are seeking donations to aid victims of the devastating earthquake in Haiti. To confirm that a charity is registered, visit the Oregon Department of Justice web site: www.oregonattorneygeneral.gov. To help consumers distinguish worthy charities from con artists and unscrupulous non-profits, Attorney General Kroger offers the following tips:

Do not give out personal information such as credit card or bank account numbers over the phone. Legitimate charities will accept contributions by check, which should always be made payable to the organization not the person collecting the donation.

Beware of callers who want your money fast. When solicited by phone, always ask the caller to send you written materials about the charity. No legitimate organization will insist that you donate immediately. Watch out for solicitors who employ dramatic, emotional or heart-tugging stories.

Do not donate cash. Legitimate charities will be pleased to receive a contribution by check. Don�t send contributions with a �runner,� by wire or overnight parcel pick-up service.

Be sure you are contributing to a legitimate organization registered with the Attorney General�s Office by searching the Department�s online database or by calling 971-673-1880. You can also visit www.guidestar.org, a national clearinghouse of information about charities and their performance.

Scammers, identity thieves and unscrupulous charities pose a significant threat to Oregon consumers. Last year, more than 150 Oregon consumers reported falling victim to some kind of a scam. The Oregon Department of Justice, a national leader in policing non-profits, also took legal action against more than 20 non-profits for using misleading solicitations.

The Oregon Department of Justice is committed to protecting Oregon consumers. Anyone who thinks they may have been contacted by a scammer should call Consumer Protection Hotline at 1-877-877-9392 or go to the Oregon Department of Justice Web site.

We gave a donation online tonight via Samaritan's Purse, which is a group my wife and I have both worked with overseas while on medical missions. It is an excellent and trustworthy charity, and one that we try to frequently support with our tithes.

Whatever your political or religious affiliations a little money will go a long ways toward helping a lot of folks in serious need. If you doubt the destruction that has happened or question the suffering that folks are going through, I hope that you look through some of the posted photos and blogs that are available. It's hard to see dead kids and not want to do something, the death toll will climb quickly due to issues of poor nutrition, sanitation, and water if swift intervention doesn't occur.

It's only collateral on a loan if you can take possession of it for settlement of debt. I personally don't see the USG letting any of their numerous creditors, both here and overseas come and take possession of anything to resolve our debts.

I got the $112 Trillion from our debts and obligations. We have at current levels $12.3 Trillion of public debt, and an unfunded debt of just over $100 Trillion for Social Security, Medicare, Medicaid, and military and civil service pensions. These are all programs that require funding by the Federal Government for which they have issued various IOU's. Unless they are going to default on all of these, then that's the current state of our budget, and it's more along the lines of 900% of GDP, vice the 85% you so blithely acknowledge.

Yes 85% debt to GDP isn't the highest level we've ever seen if you just want to count the $12.3 Trillion against our annual GDP, but it is the second highest, and we were in a world war the last time it happened. We were also sitting on 22,000 Tonnes of gold, and were the worlds largest creditor, not the worlds largest debtor. We also held the trump card in manufacturing, something we no longer do.

You mention Japan as running 200% debt to GDP, but there are major differences between us and them. One is that the Japanese had a much higher savings rate per capita than the US, allowing them to internally finance their debts. They also were the second largest economy and the third largest manufacturer in the world. That too is ending. They are having serious problems financing debt internally now, as their demographic problem has bitten them in the a$$. Their retirees are now selling their debt to finance their retirements and they do not have enough younger people to pick up the tab anymore. With the world saturated in debt, there is no market for it, and they are turning to monetization, just like every other major country in the world. This means only one thing, and that is the death of paper assets, as they will eventually reach the point of no bid, and the only thing that will be considered collateral for settlement of debt will be commodities.

You mention that no country in the world is on a gold standard anymore, and that is correct. But consider that central banks consider gold to be a major part of their capital reserves, and that it remains a universal way to settle obligations. Now, you see central banks either holding on to their gold reserves, or trying to buy more, as in the case of China, India, Russia, Brazil and virtually every other country in the world except the US and the UK. There's a reason that the Bundesbank asked for the return of their gold from the US Mint at West Point and the Fed vault in NYC. They know through bitter experience what having gold reserves means. It means stability of your currency. The reason we have constant inflation of assets and currency is because we do not have a gold standard. The only ones who think that gold is not a major asset anymore are the morons who buy the Federal Reserve's propaganda. You must recognize their FRN$ cant for what it is, talking their book. They have been wildly successful at it, so much so that most in this country denigrate the only thing that will give them insurance against a politically manipulated paper currency that hasn't held it's value since the Fed was conceived.

Face facts, the nation is bankrupt, both financially by any accounting method you wish to use, and morally by most reasonable measures of decency. All you have to do is look at the political/financial hydra that is our government to see that most who serve in government or finance are there to line their own pockets at the expense of the rest of us. That's what parasites do. Trying to rationalize it won't change the facts.

AMEN

Credit ratings as determined by whom? The same people who rated all of the CDO and MBS derivatives as AAA risks? S&P, Moody's, Fitch? I wouldn't trust their analysis on anything after their performance the last two years. Their analysis is bought and paid for.

Funny,we got hit with a 6.5 quake on Saturday,under 30 miles from the epicenter,and the worst of it was cleaning broken glass and turning the power back on.No aid needed or wanted.

Just sayin......

Brian.

Building codes work?

i will contribute my own money to the Red Cross to help those poor suffering souls. That way it bypasses the US government and will end up where it is needed most. Haiti seems doomed but the people are suffering and if you are in a position to help it is our moral duty to do so I feel. At least with Haiti the need is clearly eveident.

I have a carpenter friend who wanted to go with the Catholic missions to Haiti to work for the poor. They selected another person for the trip. When they got off the plane, they were beheaded! My same friend went to Florida after Hugo to help rebuild and on his first day, he scratched his knee. He got an infection that almost killed him. He said the hospital in Florida was so bad he was begging to be flown back to Rhode Island. They wouldn't let him get on a plane.

We're Catholic, and when they pass the plate at church for the missions in Haiti, we'll contribute. When Father Evans from church, who works with the missions comes and says a mass for Haiti, we'll contribute. I've got old people begging me for firewood, and I've got 2 churches asking for venison. I killed 4 deer this year, butchered and donated them all. They want more. I froze my butt off yesterday, and at this point, I'm about ready to repackage a couple cases of bottom round from Sam's club.

Got word yesterday that I will be heading to DR sometime next week for the army. I'm joining a medical unit from California that had already planned to go before the earthquake. I'm not sure what we'll be doing or where we will be, but I'm sure it won't be a pleasant trip.

Screw Haiti, why is it up to the US to go save them? If someone wants to send them money that is all well and good, but I resent the hell out of the government deciding to send my tax money over there ehrn I can't even get services here for our own. Soon another wave of the poor Haitian refugees Will be arriving here in Fl and be met on the dock, given welfare,free housing, food stamps and free medical all paid for with my tax dollars. Boo hoo the poor Haitians every one feel sorry for them, but how many have them standing on street corners selling drugs and robbing people in their neighborhood like I do and all the while having their bills paid with my tax dollars. Screw them all, maybe God was just thinning the herd over there.

Not to mention the aid we send them will mostly be stolen by thier corrupt government officials, let them fix thier own country or perish, the US has been bailing them out for 100 years and they still have not gotten thier [bleep] together, why do you think the DR wants nothing to do with them.

Bring on the flames but the truth is the truth and all the PC BS in the world is not going to change it.

The best thing Hati could do is abolish it's government, drop it's border and become part of the Dominican Republic.

It seems there is no bottom when it comes to the depth of US taxpayers pockets, I fear we will find out in the not so far future just how bad it can get here when our economy collapses under the strain....but I'm sure we will get all kinds of outside help from country's all around the world.........Try to prepare or at least Brace yourself for whats coming!................547.

Mike,

Did you not read my post? The credit rating is according to Institutional Investor and they are NOT the same ones that rated the derivatives. A credit rating is only as good as their analysis, but I would put more credence in their analysis than yours for a few reasons. One being that they do this for a living, as do I, and their process is much more involved than just one person that doesn't have the time or resources. Not that this is always the correct analysis as exhibited by Moody's and S&P, but again we both do this for a living.

Much of what you write is correct, but your conclusions run into problems with facts. Our credit rating is what it is and I bet that the Institutional Investor number is a whole lot closer to correct than what you are inferring. We are still selling our bonds and foreign countries are buying them. I noticed that you didn't point out the advantage of paying off debt with cheaper dollars. There's a fact for you.

Our national debt is at $12 trillion and our country is not bankrupt. You are blurring the lines when you bring in Social Security obligations because those are also funded by payroll taxes and they are entitlements that can and will be modified. Right now they are not enough and it needs to be fixed, but again our country is not bankrupt. If it were, NOBODY would buy our debt.

Mike,

Here is a simple fact that refutes your analysis of our country being bankrupt.

The interest rates on our currently issued debt is at record lows and our dollar is depreciating which makes the effective interest rate even lower to many foreign buyers. The largest buyers of our debt are foreign. The conclusion is that a bankrupt entity would not be able to issue debt at record low rates.

It just doesn't work that way you suggest.

Have you checked the TIC flows lately? They're at record lows. This past auction for 10 and 30 year bonds had a huge drop in indirect buyers-read foreign interests. The results for that auction won't be out for a few weeks, but more recent results will be released on the 19th of January. Here's the most recent TIC data:

www.treas.gov/press/releases/tg443.htm

The reason that the interest rates are low is due to our central bank-the Federal Reserve- buying the bonds. They use their Primary Dealers to purchase them and then two weeks later they repo the bonds. It's called monetization, and it is in effect printing money. This is how our Fed keeps interest rates artificially low.

Most foreign buyers are happy to purchase at the short end of the bond spectrum as it's a cash equivalent, but are very reluctant to do so at the longer end, which is why there is such a steep yield curve right now, almost 285 basis points. The problem with selling debt on the short end is that it has to be rolled over quickly, and we are pushing so much of it out into the market that we're going to have to find buyers for $2.3 Trillion this year alone. Every country is doing the same thing, and that's why the market is saturated with debt. The Fed can only set rates on the short end, and use the monetization trick on the long end, but they are having trouble on the long end, so the yield is creeping up. Buyers are going to demand much higher rates to compensate for the devaluation taking place, or the Fed risks a failed auction.

You may call our debt only $12 trillion if you like, but the other entitlements have to be paid too, and they are increasing because of demographics. They must either be paid, reduced, or defaulted. Just because we're using a budgetary sleight of hand in order to hide this, doesn't mean that it isn't there.

Now that you describe what you do professionally, I understand why you're so adamant that we're not bankrupt; in essence, you're talking your book and have bowed at the altar of the Fed. You believe their propaganda and have probably been trained in either Keynesian or Chicago school economics. Both are frauds which rely on the Ponzi scheme of paper money to have any success. Unfortunately for the country, this Ponzi scheme is coming to an end, as they have every other time they're tried, and it will bring economic and financial devastation never before seen. Haiti will seem like small potatoes when the US FRN$ collapses of it's own weight of debt. Then who will be willing to help us? As I said before, damn few.

Edited to include link

I'll give money to red cross..


One thing I don't understand though. They keep talking on the news about all the trapped people in the rubble, but in every video I see, able bodied men are just standing around like tourists in the streets. WTF is up with that? Why are american search and rescue teams heading there if their own people won't dig through the rubble? They should have plenty of man power to get the job done.

I understand that the chinks, ah, chicomms sent a plane load of stuff over

Yup, they were there FIRST,.....

SRT teams, if I'm not mistaken.

Those folk should be pretty handy about Earthquake recovery,

GTC

For humanity's sake, we should be there in force assisting. As to the (typical) lack of meaningful aid from anywhere else on the globe including the big-mouthed despots of South America - this is our narcissist-in-chief's opportunity to use his big mouth and do as he claimed he would: shame other nations into action. Won't hold my breath, however. Trust his priority is to make it appear, for political gain, how much better his Fed is that Bush's, through good PR and little substance, regarding disaster relief. Again, we'll see....

ditto yep.

"Never waste a good crisis". It'll be interesting to see what stunts the WH tries to pull while the news attention is on Haiti.

I'm kinda' amazed how quiet any coherent response to this "Council Of Governors" E.O. has been,.....

As noted, that place was a pesthole LONG before this latest bump.
What with all the brouhaha 'bout "Pandemics", ....flu shots, etc., I'd still not be surprised to see a MASSIVE influx of New Haitian immigrants.

Do you think MEXICO will offer them some room ?

.....Venezuela ?

Nothing in particular against them,.......as a people, but the "Standing Around" bit is a very perspicacious observation, on your part, C.

GTC

In my original post I asked for opinions knowing that there would be a wide view of the matter.

Personally I'm all for an all out effort in the initial stages, getting the best possible first response medical teams and rescue personal on the ground there as fast as possible.

But I'm then also all for (after the first few months) turning it over to the U.N. or the likes for other nations combined to do the restructuring and rebuilding work.


Phil

I agree with you on getting medical teams/rescue personal there asap but I expect the UN will want the US to pay for rebuilding. I dont know where the US is going to get 100 million in releif to send, guess they will just print it. Anyone know how much The Dominican Rep is sending? I mean their right there are they at least helping? And what about Cuba, are they doing anything?

I wouldn't expect much out of either, but especially the DR. They've hated each other for centuries.

My apologies to the original poster for taking the thread off on a tangent. I would be happy to continue the discussion with Mike in another thread if he wishes.

I'd love to see it. I find the debate quite interesting as well as educating.

Longbob, no apologies necessary here all opinions were what I was looking for.


Phil

I was just watching a documentary on the consequences of a 7.9 quake in the bay area of California a few day's ago. Something apparently just missed the last go around. It would make the Haiti incident and Katrina look minuscule. Loss of the delta would wipe out a good portion of the nations food chain, and most of Southern California's water supply. Not to mention the instantaneous damage and loss of life.

And in answer to another poster, YES I would hope help and aid would quickly arrive from all over the globe!

Phil

It's not really OT, since all of this aid has to paid for somehow and discussion on how that will be done are relevant; but if you want to continue this somewhere else, that's fine by me. I really don't think that we will ever reach agreement though, as we have totally different belief systems when it comes to economics.

There's that hope thing again.

What they are NOW showing on FOX coming out of Haiti is just horrific! They've given up on rescue now and are just moving Earth and ripped up structure. They are saying the smell of death is simply over-bearing. I sent money and supplies last night.

California earthquakes could be devastating, but we will have our real reckoning whenever the Yellowstone caldera (worlds largest known supervolcano) blows again. Happens about every 600,000 years, and is overdue. Lake Yellowstone has recently been lifting and shifting. May not happen in our lifetimes, but when it does, look out. Then we will be overwhelmed. Not only the immediate destruction, but our national agricultural capacity will be trashed.

yep, and if the building codes weren't sufficient, wish we had swarmed ashore earlier, and ensured proper enforcement. but, maybe it's cheaper to clean up after the mess??

This looks like a long one and I've got too many threads to read about guns. Suffice to say that I feel for those people down there and wish them well. I also completely agree with Mike's statement and was thinking the exact same thing when I read about it earlier today. Wtf? Are we giving them China's money or Japan's? Personally, I'm tired of politicians spending money on stuff that we can't afford. You can't give away something you don't have and the last time I looked, we weren't even anywhere near being flush, let alone having a surplus from which we could be charitable. Doesn't make sense.

Mike,

Once again your conclusions are wrong and the open market does not support you. Yes, the Fed does buy treasuries as one of their tools, but they are not buying the bonds, they are buying the bills and notes. They recently started concentrating on the notes which are 2 to 10 year maturities. This doesn't support the low rates for the bonds which extend beyond 10 years all the way to 30 years. We are issuing massive amounts of bonds (I wish we didn't have to) and they are being bought in massive amounts and the foreign buyers are leading the charge. The open market is telling us that these bonds are valuable and will be paid back.

Your comparison of entitlements to federal debt is also wrong. An entitlement can and will be modified unlike debt covenants. Entitlements are NOT subject to open market pressures. In a prior post I purposely pointed out that Social Security was an entitlement and it was to be funded by payroll taxes. Two important points here. One that its very existence is by creation of an entitlement and its funding is involuntary (payroll taxes vs. open market purchases via auction like the treasury market).

An entitlement can and most likely disappear as many suspect Social Security will for many of the younger generation. This is a widely held belief and has zero impact on the credit rating of the United States. It has a moral impact and that is all negative, but again the open market supports my conclusion.

You mention that we have a steep yield curve. And you also state that it is 285 basis points. This is where I think you are just throwing out stuff. It is not a steep yield curve, but a normal yield curve. For several years we have been in a flat to inverted yield curve where short term rates were as high as long term rates. The only normalization to the curve was when the short term rates dropped so low as compared to the 30 year.

Currently, we are at approximately 4.63% for the 30 year and it has been in a fairly tight range of 3 to 5% for a long time. But so has the short end. The curve normalized when the short term dropped from the 4 to 5% down to a current .02% on 1 mo. and .34% on the 1 year. Your comment of 285 basis points (2.85%) represents exactly what in relation to the yield curve?

Your comments about my studies and "bowing down" to some altar are not accurate, not necessary, and do not add to the discussion.

To add to the open market supporting my conclusions about the credit rating of the United States versus a country that is in imminent default as you are suggesting then you should look back to 1998 and Russia's default. The open market was telling us that their debt carried a tremendous risk of default by simply looking at the interest rate on the debt. I believe it was in the 40% range which would put it roughly 10 times our current rate on the 30 year.

I am catching up on my reading and I found this a bit interesting. One of the reports that I read is a Global Risk Report on Sovereign Debt. It briefly lists the riskiest debt by country and the safest debt by country. This report is as of the 4th quarter of 2009.

The United States dropped from number 3 to number 7. This ranking is based on the current credit default swap on the corresponding country's 5 year bond. Basically, it is what it would cost to insure that bond against default. For example if you owned $10,000,000 of 5 year US Treasury bonds, it would cost $3,400 for a CDS contract to insure against it defaulting. This is a record high, but it is still fairly cheap insurance.

To put this in perspective, it would cost $1,560 to insure the 5 year Norway bonds which are considered the safest sovereign debt by the prevailing CDS rates. Switzerland which currently carries a higher credit rating than either Norway or the United States, according to Institutional Investor, would cost $4,570 to insure their 5 year bond.

On the riskiest end of the scale, it would cost $126,500 to insure the bonds from Venezuela. I think I would stay away from those.

The reason why we AREN'T like those 'other' countries is quite obvious, if you take the time to quit having fun, and doing WHATEVER you wanted, whenever you wanted to; get a grip; you were born with a spoon in your mouth; And a bunch of us have paid for it, me included; you people dont know a damn thing about freedom;
What do you think allows you to say what you think? Or do what you do! Obviously not your chicken ass!! you whimps need to get back across the sea; You all suck, and just you wait; You want to live in a socialist/communist state, then get the hell out of the U.S.A.;

Where did that come from?

This last summer while sitting there waiting for old faithful to go off this man sitting next to me who was about 80 years old said "I don't want to alarm you, but sometime in the next 10,000 years this whole area is going to blow - just a heads up".

The reason why we AREN'T like those 'other' countries is quite obvious, if you take the time to quit having fun, and doing WHATEVER you wanted, whenever you wanted to; get a grip; you were born with a spoon in your mouth; And a bunch of us have paid for it, me included; you people dont know a damn thing about freedom;
What do you think allows you to say what you think? Or do what you do! Obviously not your chicken ass!! you whimps need to get back across the sea; You all suck, and just you wait; You want to live in a socialist/communist state, then get the hell out of the U.S.A.;

I hope you're drunk and not just an idiot.

In your opinion my conclusions are wrong. The data shows something else. If you look at the link that I provided, it shows the most recent Treasury International Capital (TIC) flows. Far from tripping all over themselves to buy our long term debt, the data shows on line 21 that there has been a major decrease in foreigners doing so, from a high in '07 of $541 Billion to less than $9 Billion in the most recent auction.

Looks like a real rush to me.

They are however purchasing at the short end, which has much less exposure to devaluation and is more or less a cash equivalent. That is why the yield is mere basis points, as opposed to the higher rate on the long end. The Fed has no need to cover the short end.

The difference in the yields, or the curve, is important. It is important for two reasons; one is because the higher it gets on the long end due to this lack of interest at auction, the higher the carrying costs are, especially on the huge quantities of debt that are trying to be laid off. The second is because even though there is a bid at the short end, the lack of bid at the long end requires the coupon to be increased. This increase in coupon is held down by Fed Primary Dealers stepping in and purchasing the bonds, but it is creeping higher, which will eventually drag the short end higher. Since we need to roll over more than $1 Trillion on the short end, and fund a further $1.2 Trillion in new debt with much of it on that end too, any increase at all puts debt service that much higher. Even 200 basis points could move debt service from number three on the budget to number two in very short order.

You were correct, the 285 basis point figure I put out was incorrect, my bad. I got it from a secondary source. It is more like 374 bp between the 1 year and the 30 year, and 469 bp between the 1 month and the 30 year. These are historically low yields on the low end, which has caused some Money Market funds to "break the buck", requiring the Treasury to extend deposit protection to money market funds for the first time ever. I don't see how this is "normalizing" the curve. Look here for the data:

www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

Further, your assertion that the Fed has no need to "use its tools" to intervene at the long end has been disproven by tracking CUSIP data of 10 and 30 year bonds that have been purchased by Fed PD's and then bought by the Fed two or three weeks later. This is monetization. It is happening.

Another strange anomaly that presents in the TIC data is the miracle that Carribean banking interests are holding over $200 Billion of these bonds. That's more than Germany and Russia. Antigua and the American VI might be economic powerhouses, but to believe that they have the wherewithal to purchase more of our debt than Germany or Russia strains credulity. It is further evidence that the Fed PD's are buying and parking this long term debt because there is no demand. The same applies to the Household section of the Z1 report.

Regarding the entitlements not really being debt, I have to ask what you consider debt? Even though it isn't carried on the books, it is funded in the same manner as any other debt we have. All of the revenues in SS, Medicare, Medicaid, and .gov pensions are either paid out to current recipients through current receipts, or placed in a "lock box". Well, this lock box has been broken into and the funds have been moved to the General Fund for use by Congress to waste in buying votes. "Special" Treasury bonds have been issued to cover it. Even though there was no auction to sell them, they are there. This is known as a Ponzi scheme, and is illegal if your name is Madoff, but not if you're the Federal Government.

To believe that we are going to default on these entitlements is ludicrous. The Treasury and the Fed are going to create enough debt to cover it all, and it will be paid to the penny. Recipients might only be able to buy a cup of soup with their stipend, but it will be paid. Not to do so would cause a rebellion overnight. There will never be a reform or default of these entitlements because of politics, and every time it has been tried, the party who tried it had their a$$ handed to them. I give you Dan Rostenkowski and G.W. Bush as examples of that.

My statement about your studies are based upon your comments, and add to the discussion by showing point of view. You're correct, I don't know where you were schooled, but judging by your commentary on this subject, you seem to have a proclivity for the party line given by the Fed/Treasury, and the Keynesian or Monetarist schools of economic theory. If you're an adherent to the Austrian school, you have a strange way of showing it.

One thing I really don't like is that whenever I hear or see a recording of a Haitian they are angrily demanding that America hurry up and help them. Not an attitude that tends to move me to a whole lot of sympathy.

Not much difference than what happened in the south during Katrina. With family dieing in the streets before aid can get to them, I think anyone would ask all that are planning to assist to hurry up!

One thing that I would suggest and as also happened during Katrina, is not to limit those organizations you donate to by stipulating that those funds you donate are to go only to Haiti!

If you want to donate to these organizations, let them use the funds where and how they can best be used. Could very well be that there will be another disaster in a short time frame, somewhere else... And these organizations will be tied to spending their funds only in Haiti leaving them short on the next go around.


Phil

Mike,

This will be brief because I only have a little time and won't be able to cover all points thoroughly.

The major treasury purchases in 07 were a flight to quality coming from the stock markets to a great degree and pushed yields to their historic lows. Your conclusion on the long end of the yield curve is also wrong because it hasn't moved up significantly, rather it has stayed static and the short end has moved down to create the upward slope. Again, the open market is telling us that the US is not currently in bankruptcy or about to get there. Wasn't that the original challenge that I put forth?

Your conclusion that the low end of the curve is what caused certain money markets to break the buck is factually wrong. They broke the buck primarily because of the failure of Lehman Brothers and the massive amount of Lehman bonds in their fund. Also, money market rates were much higher at the time that they broke the buck. In the 3% range if I remember correctly because it was tossed around that the money market you are referring to settled at 97 cents and it was a near breakeven with interest for the share holders.

So defaulting or modifying entitlements like Social Security is ludicrous? How about the recent history of raising the retirement age for Social Security? How about the talk of means testing Social Security? Or privatizing Social Security? Not so ludicrous it sounds like to me.

All I have time for now. Gotta go.

No actually, Lehman's collapse pushed the Primary Fund into breaking the buck because of their exposure to Lehmans' issues, even though it was only a small portion of their holdings in comparison to Treasuries. The other MM funds threatened to break the buck because of the almost overnight drop in yield on the short term Treasuries. This was due to flight to quality issues. The rate on 1 month T Bills was 1.37% on the 12th of Sep, but dropped to .36% on the 15th, the day of the bankruptcy, and declined to .07 on the 17th. The drop in yield caused panic, which led to the Treasury issuing deposit insurance to MM funds.

Yes, a default in the entitlements is an impossibility. Politicians may mess with the age requirements and may institute means testing, but the SS system as a whole will be funded, as will all of the others mentioned. They may have to create massive amounts of paper to do it, but do it they will.

All of those entitlements are claims against tax revenues, whether they're held on the books or off, they will have to be serviced. That's why I believe that your view that entitlements aren't part of the debts we owe is flawed. They may not be "technically" a part of the public debt, but they will still have to be paid.

Major Treasury purchases in '07 a flight to quality from stocks? I seem to remember that the Dow reached it's all time high in October of 07, and maintained it's position above 13,000 well into '08. IIRC it didn't take it's serious hits down to below 11000 until September of '08.

I guess we can continue this "tit for tat" from now 'til hell freezes, to no purpose. You think that I'm interpreting data incorrectly because I'm not a "professional" money manager, and I think that because you are in the financial industry that you have a certain worldview that rationalizes excessive debt levels and refuses to acknowledge how serious our situation is. We shall have to agree to disagree, and go from there.

Mike you are dead wrong about the Primary fund and Lehman's direct roll in their collapse. There are many articles that state specifically that was the reason for their collapse.

And I cannot believe you made the error with this comment "The other MM funds threatened to break the buck because of the almost overnight drop in yield on the short term Treasuries. This was due to flight to quality issues. The rate on 1 month T Bills was 1.37% on the 12th of Sep, but dropped to .36% on the 15th, the day of the bankruptcy, and declined to .07 on the 17th." The most basic finance student knows that a drop in yields of existing bonds is due to the rise in value of the bonds.

A flight to quality causes bond prices to go up (simple supply/demand) and the money market holdings of these bonds would INCREASE in value. Exactly the opposite reaction that your conclusion came to. It wasn't a drop in treasury yields that hurt the money markets it was primarily Lehman.

If you cannot understand those basic concepts then you are right, this entire discussion is pointless. And there is no where in any of my comments that I am justifying the amount of debt that we are carrying. I am simply stating, along with the open market, that the US is not bankrupt as you said. I feel that rates will rise fairly significantly for other reasons.

I realize that a drop in yield means that the underlying bond is worth more. It means that the risk premium for holding it is low, i.e. there is little risk of default. I worded my thoughts poorly. That's what lack of sleep will do.

In the case of the Primary Fund the Treasury had to step in to assure the public that their MM fund would be protected from breaking the buck, or risk a run, especially in the case of the Primary, which did have Lehman paper, but it wasn't their majority position. Their problem was that they didn't have other sources upon which to draw to cover their losses from their Lehman portion. This, and the stock market decline threw everyone into Treasuries which dropped their yields to all time lows. Other MM funds that concentrated on Treasury bills then had to worry about breaking the buck because their expense ratios were exceeding the yields available on short term paper, especially after the Fed went to 0-.25% FF rate that December.

That's OK though, feel free to disregard anything that I say on this 'cause I don't understand anything about finances or debt. I defer to you superior knowledge and expertise.

By Christopher Condon

Sept. 16 (Bloomberg) -- Reserve Primary Fund became the first money-market fund in 14 years to expose investors to losses after writing off $785 million of debt issued by bankrupt Lehman Brothers Holdings Inc.

The fund, whose assets plunged more than 60 percent to $23 billion in the past two days, said the Lehman losses forced the net value of its assets below $1 a share, known as breaking the buck. Reserve Primary, the oldest money fund in the nation, fell to 97 cents a share and redemptions were suspended for as long as seven days.

Money-market funds are considered the safest investments after cash and bank deposits, and Reserve Primary's losses come as confidence in financial markets has been shaken by the collapse of subprime mortgages, the failure of 11 U.S. commercial banks and Lehman's bankruptcy yesterday. The only other money- market fund to break the buck was the $82.2 million Community Bankers Mutual Fund in Denver, which liquidated in 1994 because of investments in interest-rate derivatives.

``This is uncharted territory,'' said Peter Crane, president of Crane Data LLC in Westborough, Massachusetts, which tracks money-market funds. ``That's certainly a stunner.''

Reserve Primary, run by closely held Reserve Management Corp. in New York, held $785 million in Lehman Brothers commercial paper and medium-term notes. The fund's board revalued the Lehman holdings as worthless effective 4 p.m. New York time, the company said today in a statement.

Unable to Prop Up Fund

Spokeswoman Ming Lee Hatch said she couldn't immediately comment on whether the company planned to secure credit to support the fund or wind it down. Investors who requested redemptions by 3 p.m. today will get all their money back.

Standard & Poor's lowered its principal stability fund rating on the company's Primary Fund and Reserve International Liquidity Fund Ltd. to `Dm' from `AAAm' because of their exposure to Lehman Brothers.

Well we as a Nation should pass on this one. We are busy fighting a World War. Besides let the loud mouths like Hugo take care of it. Oh I forgot nobody in the whole world has the Air Lift and the Sea Lift to do the job. If it was up to me, the American People can donate till the cows come home, The Army Navy/Marines Air Force Coast Guard and the Rest of the Federal Government, not one penny or Ship or Airplane or helicopter. We get spit on every day and well lets see how they work it out. No I am not going to donate a single cent to Haiti period. I could care less when you get right down to it.