Thoughts about the market, the economy and not all stimulus projects are equal.

The Dow has hit 11,200 this morning and is within 58 points of its 52 week high. I had said this rally would go to the 11,200 level in mid September and that prediction has be validated.

Where from here is the big question? I believe that before the election the Bulls want to drive the Dow and the S&P 500 above their 52 week highs. Then we will have the election and the finality of what the political implications will become evident. Will it be gridlock or will something get done to turn this economy around and solve the unemployment problem. The Country needs real jobs and I personally think it would be a great time for infrastructure repairs and a time for some great National project, like an East-West Speed Railroad system, so we didn't need to take an airplane or car to go coast to coast in a more efficient green way.

I have always wanted to take a high speed rail train across the country, as I experienced abroad. Amtrak just doesn't do it. That would be a project I could get behind. How about you? There is a project to build a High Speed Rail train from LA to San Francisco, which many would use, if it becomes a reality, but I am afraid I will be too old by the time it is completed. The Federal government has given $2.25 Billion of the $8 Billion allocated under the American Recovery and ReInvestment Act (ARRA) to this project. The project must be complete and operational by the Fall of 2017 for CA to get the Funds. The four sections eligible for stimulus funding are: Los Angeles to Anaheim, San Francisco to San Jose, Merced to Fresno and Fresno to Bakersfield. However, in order to accomplish the goals set out in the stimulus program, the Authority believes it is clear the funding must not be spread among the four sections, but rather concentrated in one of them.

I have attached a map below of the proposed route for any Californians who haven't seen it. Additional information may be obtained by going to this link at The California High Speed Rail Plan.

If we could start the branches for a National High Speed Rail system, we could then join the pieces to form a national network. This endeavor would add such a wonderful treasure to our country as we are at the beginning of the 21st Century. President Eisenhower left a generational legacy with the InterState Highway system. It is hard to conceive what our country would have been like had Ike not foreseen this project when he did. It is an invaluable treasure for our transportation needs and so too would a High Speed Rail system be, which was designed for a more green, efficient way to cross this great land. I would like to see this in my lifetime, wouldn't you?

The lesson of this ramble is that not all stimulus is equal. Some stimulus have real long lasting benefits, if you can think beyond today. Can you? This is why voting is so important. If you vote you can make an impact and if you don't vote, you have left the decisions about your future to someone who only cares about themselves. The Tea Party and the Republicans have declared no more spending! Reign in Government, is their cry. To me that means no solutions to our current problems. The Democrats want some stimulus targeted for this type of project and other Green solutions. Did you know that freight rail systems get 436 miles on a gallon of gas? Vote and vote wisely this election. Elections have consequences! Your future depends on it as well as that of your children. It really is an important election.

California's Unemployment rate for October is abysmal

California Unemployment rate has climbed, yet again. from 12.2% in September to an astounding 12.5% in October. Remember this is the official unemployment rate and does not include those who have stopped looking for work or have run out of benefits. Nationally, that number was 17.5% for October, but locally in California that number most likely exceeds 20%. That's 1 in 5 people are unemployed. The real economy is not going to get better until these people can get jobs, any jobs!

To link to news item for other states click on this link below:
Unemployment news story and this article below:

Other Unemployment article

California Unemployment rate reaches 11.9%

California's unemployment rate continues to rise but it is not in the top spot for Unemployed. Michigan holds that spot followed by tiny little Rhode Island, then Nevada and Oregon is tied with California. California has the largest population with about 37 Million people. So when the numbers come out for the U.S. Unemployment rate for the month of August, due on September 4th, expect it to go up from 9.7% to either 9.9% or 10.0%. It will go higher than 10.0% over the next 6 months. The country needs to create jobs, as without them there will not be a recovery. It doesn't look like the private sector can, so people shouldn't be so negative about the government's role here. The government must do the job when the private sector can't, and that is what the Obama Administration is trying to do. So be supportive of what President Obama is trying to do here, my Republican friends, or you too may find yourself in bread lines!

In the photo above, Job seekers line up to inquire about jobs with Cintas Service Professionals at a job fair in San Francisco, Thursday, Aug. 20, 2009. The number of first-time claims for unemployment benefits rose unexpectedly for the second straight week, a sign that jobs remain scarce even as other data show the economy is stabilizing. (AP Photo by Marcio Jose Sanchez)

Paul Krugman makes sense again comparing the budget crisis in California to the Federal Government crisis.

I was sent this editorial article of Nobel Laureate, Paul Krugman, by a neighbor today and thought I would post it in its entirety. So here it is:

From the New York Times

May 25, 2009
OP-ED COLUMNIST
State of Paralysis

By PAUL KRUGMAN
California, it has long been claimed, is where the future happens first. But is that still true? If it is, God help America.

The recession has hit the Golden State hard. The housing bubble was bigger there than almost anywhere else, and the bust has been bigger too. California’s unemployment rate, at 11 percent, is the fifth-highest in the nation. And the state’s revenues have suffered accordingly.

What’s really alarming about California, however, is the political system’s inability to rise to the occasion.

Despite the economic slump, despite irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is — and you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole.

The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.

The result was a tax system that is both inequitable and unstable. It’s inequitable because older homeowners often pay far less property tax than their younger neighbors. It’s unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.

Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.

For California, where the Republicans began their transformation from the party of Eisenhower to the party of Reagan, is also the place where they began their next transformation, into the party of Rush Limbaugh. As the political tide has turned against California Republicans, the party’s remaining members have become ever more extreme, ever less interested in the actual business of governing.

And while the party’s growing extremism condemns it to seemingly permanent minority status — Mr. Schwarzenegger was and is sui generis — the Republican rump retains enough seats in the Legislature to block any responsible action in the face of the fiscal crisis.

Will the same thing happen to the nation as a whole?

Last week Bill Gross of Pimco, the giant bond fund, warned that the U.S. government may lose its AAA debt rating in a few years, thanks to the trillions it’s spending to rescue the economy and the banks. Is that a real possibility?

Well, in a rational world Mr. Gross’s warning would make no sense. America’s projected deficits may sound large, yet it would take only a modest tax increase to cover the expected rise in interest payments — and right now American taxes are well below those in most other wealthy countries. The fiscal consequences of the current crisis, in other words, should be manageable.

But that presumes that we’ll be able, as a political matter, to act responsibly. The example of California shows that this is by no means guaranteed. And the political problems that have plagued California for years are now increasingly apparent at a national level.

To be blunt: recent events suggest that the Republican Party has been driven mad by lack of power. The few remaining moderates have been defeated, have fled, or are being driven out. What’s left is a party whose national committee has just passed a resolution solemnly declaring that Democrats are “dedicated to restructuring American society along socialist ideals,” and released a video comparing Speaker of the House Nancy Pelosi to Pussy Galore.

And that party still has 40 senators.

So will America follow California into ungovernability? Well, California has some special weaknesses that aren’t shared by the federal government. In particular, tax increases at the federal level don’t require a two-thirds majority, and can in some cases bypass the filibuster. So acting responsibly should be easier in Washington than in Sacramento.

But the California precedent still has me rattled. Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?

On the other hand, the problems that plague California politics apply at the national level too.

Seems to me a no-brainer, Californians need to repeal Proposition 13, just like some activists got Proposition 8 banning gay marriage to be upheld by the California Supreme Court today.

Pre-Market outlook for May 18th and more! UPDATE

European markets are up in oversees markets going inot the open this morning. The Nikkei however lost over 200 points in overnight trading. Dow, Nasdaq and S&P Futures are pointing to an up market at the open helped along by several pieces of news. One piece of news is about India. The election win, of the party of the Prime Minister Singh's Congress Party, has resulted in the biggest gain in India's stock market. It gained 17% and the Rupee gained 3.6% while the Bond market declined sharply, as many Indians see more continued growth and prosperity under the ruling party, going forward. Trading was halted in their stock market because of the sharp surge in the Sensitive Index or Sensex. According to these news reports, markets are euphoric.

The other news is about 3 Month LIBOR rates. It is at the lowest level in a long time. According to news reports, "LIBOR has dropped more than two basis points for the past four days. The last time it fell so much was in the four days through Jan. 13.

Some measures show financial institutions are still wary of lending after banks racked up more than $1.4 trillion of writedowns and losses since the start of 2007."

Also reported in the same article was this little nugget of related news: "The drop in Libor has less to do with rising confidence among financial institutions than it does with surging customer deposits, Jim Vogel, an analyst at FTN Financial said last week. Deposits at U.S. banks jumped by almost $400 billion in the past six months, contributing to reduced demand for loans in the interbank market".

So it looks like the American Consumer has finally decided to save rather than spend. It is my view that this is a once in a generation shift in the mindset of Americans and this trend will not change for a very long time, just as it had affected the generation who lived through the Great Depression and Crash of 1929 and the 1930's. So don't be looking to Consumers to just go out and spend anytime soon. It is also worth noting that the Consumer is responsible for 70% of the growth in the economy. If there were ever something to worry about, this news tidbit is it.

The market may rise at the open today, because of the India news, but believe me this will be short lived. Today after the Bell, Lowe's reports earnings and tomorrow Home Depot. As Jim Cramer, of CNBC's Mad Money, has pointed out on his show last week, they are both over weighted in their footprints in Florida and California and will give a read on the two States economies. Heck, I can tell you things are bad in California and the State especially manifests these troubles as unless the Ballot measures approved by State Legislatures is approved by Voters in a Special Election tomorrow, the State will have to lay off thousands of teachers, sell prime property assets to private investors, and release tens of thousands of prisoners from jails, as it can't afford to keep them jailed.

Bad times are almost a given here in California as it has exemplified the Sub Prime problem in State government by always borrowing to help someone without thinking of how to pay for it. The latest read on the Special Election Ballot measures is that they will be defeated and the State will face draconian measures under Governor Arnold Schwarzenegger.

UPDATE: 8:15am PST

Market opened higher as expected. Lowe's announced earnings and they beat analysts expectations but Revenues were down over 6%. And while the stock is up $1.17/share to $19.62, there are concerns that they have not reduced their inventory fast enough to keep up with falling demand. So the question is will this be just a 1 or 2 day rally for the stock.

State data comparisons: California Budget crisis did not need to happen. Is your State next?

Everyone has heard of how California has been locked in gridlock over its budget mess for the past 5 months until getting it approved this past week. Much of the debate was centered around the Republicans wanting not to increase taxes and instead to cut spending, postulating that our State government has grown out of control and fiscally irresponsible. No real data has been published to validate this fact except for the fact we have had a $41 Billion dollar shortfall, so of course the Republicans blame this on too much spending. So I decided to do a little fact checking myself and see for example, does California have too big a government compared to other States around the country and what I found out was truly surprising. I looked at the number of State Employees we have versus the size of our population to see what was the percent of employees of our total population. I then did this for every State in the country. I then ranked them by the lowest percentage to the highest percentage. Before I show the data, where would you guess California ranked, one of the best, one of the worst or about in the middle? Here's the data. Look for your State's data here as well.

State % of State Employees as a % of Total population

Illinois 0.82% (President Obama's home State)
Arizona 0.89%
California 0.91%
Florida 0.93%
Nevada 0.97%
Wisconsin 0.97%
Ohio 1.04%
Texas 1.07%
Colorado 1.07%
Pennsylvania 1.14%
Georgia 1.15%
Michigan 1.19%
Indiana 1.20%
Idaho 1.21%
New York 1.21%
Tennessee 1.22%
New Hampshire 1.22%
Minnesota 1.24%
Massachusetts 1.30%
Missouri 1.35%
Virginia 1.37%
North Carolina 1.38%
Oregon 1.39%
Iowa 1.39%
Kansas 1.41%
Maryland 1.48%
South Dakota 1.51%
Connecticut 1.52%
Nebraska 1.52%
Washington 1.54%
Utah 1.54%
South Carolina 1.57%
Maine 1.57%
New Jersey 1.65%
Alabama 1.69%
Kentucky 1.70%
Oklahoma 1.71%
Mississippi 1.72%
Montana 1.76%
Louisiana 1.76%
Rhode Island 1.76%
West Virginia 1.90%
Arkansas 1.91%
Vermont 2.20%
Wyoming 2.22%
North Dakota 2.28%
New Mexico 2.28%
Delaware 2.61%
Alaska 3.45%
Hawaii 3.98%

One could make a good argument that the problem California has is that it HASN"T raised enough money from taxes to support itself, contrary to what has been the Republican position. However, without including the spending part of the equation, this would be irresponsible. I will look to see if I can also get that information and post it here. But let's be clear about one thing, California needed to pass a budget and what the Democrats were trying to do for the past 5 months was very reasonable and what the Republicans were doing in preventing passage of the current Bill was irresponsible. California voters should remember this stance next time they vote. California is not irresponsible nor are its citizens. The irresponsibility comes from ideological Republicans who, as a national Party, are doing everything they can to see President Obama fail. Shame on you all!

Sources of this data comes from the Government Census Bureau.

California Budget Gridlock: Here are the Senators responsible for Gridlock.

First a little brief background. California is unlike the Federal government in that it must balance its budget but in order to do that it takes a 2/3rd approval rate, not the usual 50% majority other States have as a requirement. California has 40 State Senators. Currently, there are 25 Democrats and 15 Republicans. That would mean in order to pass the proposed budget we need 27 votes. Now with the Democrats holding only 24 seats, they need 3 Republicans to approve the Budget. They can get only 2 Republicans to vote for the proposed budget, which is a mix of Cuts in spending and tax increases. The Senate has been working on this problem a good 6 months to a year.

So here we are with a few stubborn Republicans who have helped create this mess in the first place, blocking all action to get the measure passed. The Republicans don't want a single tax increased and that is their position period. Here is a list of the Republican Senators who have caused this mess:

Name

Walters
Hollingsworth
Denham
Benoit
Huff
Ashburn
Aanestad
Strickland
Maldonado
Runner
Wyland
Cox
Harman
Dutton
COGDILL

Now the Republican leader Sen. Dave Cogdill had voted for the budget in the spirit of compromise, but now faces his own party as the Republicans ousted him from his leadership position for voting in favor of the proposed budget. Sen Abel Maldonado of Santa Maria), voted against the taxes this morning but has stated publicly that he might support them if various government reforms were added to the package. He was sharply critical of his caucus for removing Cogdill. GOP Sen. Roy Ashburn of Bakersfield has agreed to vote for the package, according to legislative officials.

The GOP's only Latino senator, Maldonado, like Adams, represents a swing district and voted for the state budget in 2007.

On Monday, Maldonado said he would "take a look at" voting for the budget package if it included financial penalties for future legislators who fail to pass state budgets on time or drive the state into deficit. And Maldonado, who lost a 2006 bid for state controller to a more conservative challenger, said he wants future California primary elections to be "open," allowing voters to cross party lines to cast a ballot.

So we are in a mess and only some reasonable Republican Senators hold the key to getting us out of this mess. California is a beautiful state to live in from nature's perspective, but from some of the people that live here it is one of the worst states. And I say that having lived in Massachusetts for 25 years or should I call it Taxachusetts like the locals do.

Many want to blame Gov. Arnold Schwarzenegger but I think he has done his best to get his Party to join the Democrats. It's just that they are all stubborn and in my view should resign as they are failing to keep their oath to the people of the State. They have done everything they can to be obstructionists and don't deserve the seats they occupy.

UPDATE: Feb. 19th
I corrected the list of names above to reflect the State Senators instead of what I had listed, the Assembly. Thanks to the comments from those making them.

California Budget Gridlock: When are the people going to rise up?

The mess California finds itself in is every Californian's concern. And the answer to get out of this $14 Billion deficit requires regular people to get involved in ways we haven't ever before. In California and only 1 or 2 other States, it requires a 2/3 vote to approve the State budget. That is 67% of the elected officials voting in favor of the budget. We have been without a budget for many, many months and we now risk being bankrupt as a State. The legislature is within 3 votes needed to pass the budget, but Republicans, on ideological grounds, are opposing it. Does this sound familiar?

So what can we do as citizens of the State? Well, first we could all support a budget change to a needed 50% plus one majority to pass the budget. But that law can't get passed because the Republican minority wouldn't vote for it, as their power would be gone because California is predominantly Democratic and a Progressive State.

One thing not explored is what powers Governor Arnold Schwarzenegger really has to end this crisis. He has called a State of Emergency and the Legislature is meeting to try to resolve the problem but no one is budging on their positions and the stalemate continues. Reporters this morning are saying that small groups of non-government people are working behind the scenes to come up with some solutions. This is very good news if true.

But one thing that needs consideration is some local pressure from citizens in the communities where the 3 Republican votes are needed, and those vested interests need to abandon their ideological views for more pragmatic ones. Many people will lose their jobs and people need to care about all Californians plight with this budget mess. I for one, would be willing to pay more California taxes, as most Californians also would. For those Republicans who are tired of paying California taxes, leave the State and go find another home where you can have such a beautiful place to live but don't have to pay taxes. It's called Nevada! But no one really lives there.

Obama wins! It took all of us to put the Country back on track

This is an emotional evening for me as I wasn't sure where the voters were going to hang their hats. Survey's are one thing but the actual vote is the ultimate decider. Were they going to disappoint me again, or were they going to return home. Not since JFK have I been excited in a Presidential election. What has haunted me is this? Even as the country has experienced a stock market crash, and a financial crisis in the Banking and Insurance industry, 28% of the American people approve of the job Bush has done as President. That is an amazing statistic even though he has the lowest approval ratings in history of this survey. Who are these 28% and where do they live? Are they concentrated in one State? Do they live all in a specific area of the Country or are they in fact our neighbors? It is a very scary thought.

It is my State of California which now puts Barack Obama over the necessary 270 Electoral College votes to a total of 275 votes to victory. This election is as much of a mandate for Barack to implement his promises during the campaign. Those commitments include the following:

Getting our troops out of Iraq
Healthcare for everyone
Raising up the Middle Class by creating jobs
Reducing Global warming

God watch over Barack Obama and Joe Biden and God Bless America.

UPDATE 8:35pm PST
I just received an email from Barack. Here is what he said:

Charles --

I'm about to head to Grant Park to talk to everyone gathered there, but I wanted to write to you first.

We just made history.

And I don't want you to forget how we did it.

You made history every single day during this campaign -- every day you knocked on doors, made a donation, or talked to your family, friends, and neighbors about why you believe it's time for change.

I want to thank all of you who gave your time, talent, and passion to this campaign.

We have a lot of work to do to get our country back on track, and I'll be in touch soon about what comes next.

But I want to be very clear about one thing...

All of this happened because of you.

Thank you,

Barack

Solar Power in California

Those that read my Blog know that I had converted my home to Solar Electric Power about 6 years ago. My county in California is active in support of more Solar in California and my State Representative has sponsored a Bill requesting support for more help in passage of the Bill. Here's some background from EnvironmentCalifornia.org you might find interesting if you are a California resident.

The Solar Water Heating and Efficiency Act of 2007 (AB 1470), authored by Assemblymember Jared Huffman (Marin), has passed two committees in the state Assembly over the past two weeks. The bill would create the nation's largest rebate program for solar water heating technologies, helping to lower energy bills, reduce global warming pollution and expand California's solar power market.

Solar hot water systems are one of most promising technologies available today. The systems can be located directly on the roof of a home or business, just like solar electric panels. They capture heat from the sun to heat water to reduce gas bills by up to 50 percent.

AB 1470 would create a statewide rebate program to grow a mainstream market for solar hot water systems, building 200,000 rooftop systems within 10 years. The typical cost of a solar hot water system is between $4,000 and $6,000. With a rebate from the state, and continuation of a federal tax credit, such systems could become cost effective from day-one if financed through a home loan or could pay for themselves within 8 to 10 years.

Despite opposition from Sempra, one of California's largest natural gas corporations, a majority of two key committees in the state Legislature voted in favor of AB 1470.

The first committee vote came on April 16th in Assembly Utilities & Commerce Committee. The assemblymembers voting in favor of the bill were: Hector De La Torre (LA), Karen Bass (LA), Mike Davis (LA), Dave Jones (Sacramento), Laura Richardson (Long Beach), Bill Author Jared Huffman (Marin) and Cameron Smyth (Santa Clarita).

The second committee vote happened on April 23rd in Assembly Natural Resources Committee. The assembly members voting in favor of the bill were: Loni Hancock (Berkeley), Patty Berg (Eureka), Julia Brownley (Santa Monica), John Laird* (Santa Cruz), Lori Saldana* (San Diego), and Lois Wolk* (Davis). The starred members are co-authors.

Please help us build support for solar power by asking a friend or family member to e-mail his or her assemblymember in support of AB 1470.

To take action, click on the link below or paste it into your Web browser:

EnvironmentCalifornia.org

I have been fortunate that with the exception of a one month period when I had my panels off, I have not had to pay for any electricity in 6 years. The only electric bill I receive is about $100-$160/year for fees the Pacific Gas & Electric charge me for being hooked up to the electric Grid so we can send our excess electricity back for all to use. It was one of our best decisions to go Solar as there are additional benefits not cited. First, your roof stays cooler in the summer because the panels block the rays of the sun. This keeps our upstairs cooler requiring less air conditioning. The roof should last longer too as the sun's rays aren't beating all day on the roof. And thirdly, they value in appreciation of your house is also a plus. The City of San Francisco, which in the summer is well known for its fog, is considering purchasing all its power from alternative energy sources that are Green, thus saving on Middle Eastern oil needs. Say what you like about San Francisco being so Left of Center politically, they are often leading the country for the betterment of society. Recently the City banned plastic bags from grocery stores as these bags will not decompose in dumps and will be around for many lifetimes.

Think Green and act Locally.

Fatalities by State from Iraq War and why Vermonters called for impeachment

A few days ago I wrote a piece titled, "Calls for impeachment from small towns across Vermont". At that time I had no idea as to why 29 towns have called for the impeachment of President Bush. I had first attributed it to the fact that Vermont had the only Progressive candidate in the Senate, Bernie Sanders and therefore it was understandable that many might vote for impeachment given the history of the blunders and failed policy of this President and his Administration.

But upon closer examination I had my eyes opened wide to the real reason that Vermont was leading the way in calls for Bush's impeachment, to end this Iraq war and to bring the troops home. Vermonters on a per person basis, have sacrificed more of its blood treasure, its soldiers, than any other State in the country, a fact not known nor cited by the main stream media. These families know first hand what this war is costing. By contrast the District of Columbia, the seat of politics and of all branches of government, had the least % casualties by a margin of 1 DC fatality for every 5 Vermonters. I am not trying to minimalize even one death here, but rather to give one good reason why Vermonters may have called for the impeachment of President Bush. They are living the consequences of going into this war of choice first hand.

Click on the image above to enlarge it and see where your State stands on the list. They are sorted by Fatalities from greatest to least percentage based upon the State population. Fatalities included in the data are those listed as of 3-11-07 on icasualties.org.