Sports News vs Financial news...whats the difference?

I watched this video of a football player, Mark Cuban, chewing out ESPN news casters on the lack of depth of coverage.
Much of what he calls out is exactly the same across all US news.

No depth, all fluff and spin, a great mini-tirade.

A journalist FINALLY gets tough

There are so few examples of journalists being tenacious with politicians and other people in positions to ask the tough questions to protect the interest of it's citizens.

The  Irish journalist Vincent Browne is tenacious and shrewd.  He  was able to avoid the tactic of microphone change once his question was asked.  The problem is there should be an army of journalists asking tough questions.  But of course, I see so rare an occasion of tough journalism, that over the years I have only a handful of examples.

Vincent Browne has a hard hitting show on TV3, well worth a watch.

I have posted how the Irish government sold it's citizens into decades of debt slaves, when smarter countries, like Iceland avoided that fate.

A great video to watch, how the law is continually perverted by governments extending payments to un-guaranteed gambling (investing?) debts at the cost of the citizens.

Vincent Browne, thank you for doing your job.

The Media News Bias

Mish has a great rant on his blog about mainstream US media vs other sources such as Russia Today.
I think of myself as open minded, but I also recoil a little about getting news from Russia Today.  I guess my childhood of being told over and over that Russia is the enemy (and they are!) has me on the guard.

But the US media also is the enemy, for if we pull back for the last 20 years, the media has NOT been on the attack and helped the masses understand the important issues and keep their focus on the ball.  Instead its "Entertainment News", and less news, more opinion/spin.

So how can I trust US news to give me the current important news if the media has not been focused on core political and economic issues?

This doesn't mean I trust Russia Today, but the coverage I have seen rings more informative than many other news sources in the last few years.

I encourage you to read Mish's Rant Privatizing of Gains and Socializing of Losses; You Want the News? From Where?, and a good episode of Russia Today below.  It is full of opinion, and not facts, BUT it is very apparent when opinion is being given, unlike fox news.

Media Consolidation

I posted back on November 2nd 2008, on a post on Blame Republicans or Democrats, where I articulate the high level actions that have contributed together to bring the western world into financial stress.
Back then we were voting for a president, and I stated :
As for either president, either one will face what is now looking almost certainly to be a Depression due to the actions being taken now. Either will face huge debt that they can't pay for. I am torn......


Fast forward to November 2011, and it looks to me that we are  in a continual recession/depression since 2008.  (I can make the case since 2000, but it is less apparent to most.) We are on-track for this time period to be relabeled a depression in a few years.


One key aspect of this situation is the media of blame, from my 2008 post is the media.   The media has not been doing a great job of informing the public, or even civil to those who try, as I showed in  Hostile Media on non-mainstream opinions.  The root of this is lack of competition for the eyes and ears of the public through TV, magazines, and newspapers.   In the post Blame Republicans or Democrats, the source of the lack of media variety was born by Ronald Reagan, bringing us to the top 5 giving 80% of the information me and you get.  


Today I have a more current depiction to better illustrate from "Frugal Dad" blog, thanks to my friend Bob.   It depicts this change of information suppliers.  My hope is over the next decade people will shift to bloggers and other news sources like I have.  Although it can present questionable information, to date I don't find it less reliable than the top 6 news providers, and in most cases more insightful.

Source: Frugal dad

Hostile Media on non-mainstream opinions

I watched two videos today that are both worth watching.
First is Ron Paul, and his opinion on a wide variety of topics.

The second is a financial adviser who is not very optimistic of Europe, Japan, and I imagine, the USA.

What struck me when I watched these was the outright hostility of the interviewers.
The one interviewing Ron Paul was very  aggressive in his questioning.  Each one was positioned to make Ron Paul look fringe. (which he is!)  I'd love to see the same interview-er with other candidates to see if the questions are this deep, confrontational, and at times dismissive!

The second the interviewer clearly had an agenda to paint the adviser as profiting from main street losses.
As in my thankful post, this man could have avoided the interview and kept his opinion to himself.
Instead he stood strong to meet in the public eye and stand his ground.

It no wonder its so hard to get the straight scoop when the media is on a mission.  Shut up and conform already!







This woman says there where very few investors that knew the world was heading into financial turmoil.  Why is that? oh, maybe the media isn't questioning what is presenting at face value?  Nah, the media has zero responsibility to keep the masses informed, they should do like I do, read bloggers and watch random videos.







In this clip the interviewer says you can't buy insurance of a house you don't known.  She is actually right.  All DERIVATIVE MARKETS should be killed off or deeply restricted, and minimize leverage.  Just take a look at Israel for a model of what is sane.  It is these exotic Derivatives in an unregulated, opaque market that are a problem.  Don't attack this man for participating in the market!  Go after the construct, and fix it!

Blame Republicans or Democrats?

Going into the election November 4th, there will be plenty of buzz on "blaming" one party or the other for the financial situation the US is in. The truth is in the USA BOTH parties are to blame for creating the financial disaster the US is facing.

Also, not just the US but the world is to blame. The USA may have set the stage, but the world followed, without question, in our footsteps. All over the world, easy money and loose regulation, combined with bad accounting practices conspired to create the toxic financial cocktail we are witnessing.

I can honestly say for the first time in my life, I don't have a passion for either candidate. I have, however, historically voted Democrat for President. Maybe someday I'll post a long rant as to why, but that's a different topic.

But in the end, there is "always" one side with "more blame" than the other. Let me explain in simple terms how I see how the US got here.
Unfortunately, I don't have the time to create links and supply research to support my claims. Feel free to post a comment to support links to support or tear apart my claims here.
I'd like to someday get back to this article and create the supporting documentation.
US Financial Disaster Ingredients

USA Setup to be a Weak financial nation, a debtor nation.
First, both parties are to blame for setting the country up as a debtor nation. Under Reaganomics, the US debt skyrocketed. Under Clinton, the government was shut down with President Clinton trying to force the republican congress to agree to his fiscal budget with objective to balance the budget, which he successfully did in 2000.
However, Democrats have throughout the course of the last 30 years have also been guilty of not standing up and forcing fiscal discipline. Although under Bill Clinton, the US debt was reversed, and significant cuts in government occurred. (click) The Democrats, "under the cover" of a Republican president also partook and in pet causes feasted on the fiscal debt spending.
Under George W. Bush the nations debt started at 5.5 trillion, and in 8 years jumped to close to 13 trillion. Think about that, from George Washington to Bill Clinton, total USA debt 5.5 trillion. Added 6.5 trillion in 8 years. Wow. And that DOESN'T include the debt the USA will spend the next year due to this fiscal disaster, or the 6 trillion now guaranteed by feds for Freddie Mac & Fannie Mae.
Blame: This fact alone makes me place "blame" 50.1% republican, 49.9% democrat.

USA in sub-prime loan businessThe government in 1998 (ish time frame) setup mortgage program to ensure "all Americans" have easier access to loans. The government offering capitalist products, such as mortgages IS a problem. It by its basic nature places cost/risk onto the tax payer instead of the public sector. This effort/program was primarily Democrat pet project.
In first term of George Bush, there was massive cuts in all sorts of "pet democrat" projects occurred, and repealing pollution restrictions back decades. The Republicans did NOT use their superior numbers 2000-2004 to stop the sub-prime lending backed by federal dollars.
Blame on this one goes to Democrat, 90% vs Republican 10%

Easy credit & low interest ratesAfter 9/11, the republican administration (and at that time congress) backed efforts to stimulate the economy. At no time between 9/11/01 to today has the government discouraged "low interest rates" as spurring artificial high prices for housing and other financial "investments". In addition, due to Republican pushes to "deregulate" the industries (across the board), the US government for the most part took a hands-off approach to businesses. Private businesses reaped in huge bonuses, stock prices, and earnings. But as we know now, much of this in the real estate related businesses wasn't REAL earnings, it was fraud through mis-placing risk, low interest rates, and easy credit due to the government not taking a critical eye on the activities in the market place.
The reality is both parties feasted on easy money and neither raised any serious objections.
Blame 50/50 on this topic.

Accounting outright FRAUDThe USA does NOT follow world standard accounting practices. Even given with all the problems listed above, none of these issues could have created a world-shattering event without the help of "magic" accounting.
If accounting was true and honest, the fraudulent acts being committed would have been realized years ago, preventing the events from spiraling as high as they did. This means we would not be facing world economic disasters, but rather a milder downturn as companies realized losses years ago, stopping the economic inflation juggernaut.
The USA changed accepting accounting practices in place since the Great Depression. That is that banks COULD NOT invest in high risk investment vehicles. Further, bank investment vehicles are prices "mark to market" to assess their true value.

Two key things happened.
1) Mortgages where allowed to be "repacked" as tranches in "mortgage back securities", rated like bonds (guaranteed income). These tranches had insurance purchased to "cover" any unforeseen losses thereby making the security AAA. Further, these securities where not valued by open market valuations, but use "computer models". This is a bit like me writing a program stating my car is work 2 million dollars, then selling securities based on my car's listed value. It doesn't make it real if a "computer" says so. Only what people will PAY for an item makes it real. If computer models worked matching reality, I'd be playing WOW 24 x 7. :)

2) Mortgage backed securities where treated like an asset, on separate books, called "level 3" assets. Basically there is credit & debit columns that are used to asses a company's value. Then additional "value" on a separate set of books.

The combined two items above have allowed companies to become insanely over-leveraged, over-valued, and taking higher risks than was priced into the companies.
The result is execs and stock prices where over-inflated through MISREPRESENTATION OF RISK.

Consider this, if I purchase a AAA rated bond at 40% return on investment, and my company generated record profits, yielding me 40 million dollar bonus, only to find out months or years later that AAA bond was reassessed as junk and therefore that's how it had such great returns, and fails, my bonus was based on FRAUD not reality. High rewards is almost always because of high risk, low risk equals low returns.

Legal or not, that's the REALITY of what has occurred. Further Bush administration has rejected funding of FBI to investigate criminal charges involving mortgage debacle.
What is now occurring is deciding who EATS the cost of mis-placing RISK. And so far, it seems the TAXPAYER is going to foot the bill, everywhere. Either through the government spending or the populations 401k & pension plans. The relative few who profited from this scheme are doing great, they got their payout.

This one I specifically place on the Republicans, since this outrageous fraud occurred at the start of the Big W administration. Democrats I am sure where involved, but under GWB, the industry was given free reign with almost no oversight or criticism from the government.

UPDATE: GWB refused funding for FBI to investigate fraud in mortgages, AFTER collapse.

Blame: This one score for Republicans 80%, democrats 20%

Failure of the Media to "Critique" USA actions
Unless you spend 20 hours a week reading newspapers, and occasionally diving into your own hands-on research, it would be nearly impossible for the average person to be "Aware" of the situation the USA was placing itself in 7 years ago. So the question begs, why didn't the media sound the alarm? I personally witnessed interviews from Robert Reich and other prominent authorities years ago that this would occur. But mainstream media didn't pick it up as a major news item.
Reason? There are not enough varied media sources. Before Ronald Reagan, there was greater separation of media sources. Reagan passed a law allowing media to converge, resulting in 80% of the information you hear or read to come from 5 sources. (down from 50).
Blame: 51% Republican, 49% dems, mainly since the Dems under Clinton didn't reverse this course.

USA collapse & Additional Government Spending
THE reason why we are seeing the USA (And world) failing is mainly due to the accounting fraud the government allowed. The US has created less transparency, allowing trust to degrade, and companies to blow up as reality hits the fantasy created.

But now the losses are occurring, we are socializing the losses.
Blame: I give this 51% republican, 49% democrat. Its close, the only reason why I didn't do 50/50, is the actions of GWB's Treasury and Federal Reserve.
The 700 BILLION dollar package is both parties fault, but the spending occurring beyond congress's agreement is under the Republican Administration, Bernanke & Paulson

Summary
In summary, given the issues as I see it above, I place "greater" blame on Republicans than Democrats. But in the end, both are at fault for not raising the alarm and acting when each had superior numbers in congress in the last 8 years and acting to reverse course. So greater blame, really is more of a topic in a corner bar debate. However, as a voting guide, I plan to vote against any congressperson that voted for the 700 billion dollar bailout, effectively socializing private losses. In addition that money will be used for buyouts of other companies and paying off foreign companies losses.

For a list of how your representatives votes, click here.

As for either president, either one will face what is now looking almost certainly to be a Depression due to the actions being taken now. Either will face huge debt that they can't pay for. I am torn between Nader, McCain, and Obama for completely different reasons. I'll reserve my comments on which to vote on from my perspective.
I just wanted to lay out the "blame game", as I see it, to be clear on the ownership of the situation. However, voting should have little to do with past blame, just on better future.
In the end, the US public is to blame, for not paying attention to what their representatives where doing in office. And the USA elected GW Bush twice, so his actions and policies where the American will. Lets hope we can do (not just believe/faith the USA deserves) better.

Back to finance and out of politics for this blog.
(image source)