yeahhh

In my first article, "Economic woes hurt Medicare, Social Security" the author talks about the titled programs will run short of funds sooner than previously expected, due to the recession. It is now expected that the Social Security trust fun will be exhausted by 2037 now, and the Medicare hospital trust fund will become insolvent by 2017. Treasury secretary Tim Geithner said this report shows the urgency for the government to overhaul and restructure these programs. Republicans and Democrats disagree over how to restructure, with the Republicans opposing a democrat-written bill to offer government health insurance to the 46 million uninsured people.

I wish I knew more about the health care industry, but it seems to me that it is impossible for the government to pay for so many people's insurance. It astounds me that almost a sixth of our population doesn't have health insurance, and that makes me think: why aren't health insurance companies efficient enough to tap into this huge consumer base. I feel like in the last few years more and more people have started to take advantage of the government plans, which creates a burden on the government and is bad for our debt. However, the goal should be to find a system which can sustain everyone, and I feel if people want to keep these institutions such as Social Security and Medicare, we're going to need to raise taxes.

My second article was titled "GMAC to provide financing for Chrysler dealers, which was about about how Chrysler's bankruptcy judge said that since Chrysler Financial (Chrysler's lender), stopped lending to Chrysler after the bankruptcy declaration, that Chrysler could now get financing from GMAC, the former financing unit of GM. GMAC will now assess dealer credit over the next 180 days to determine which Chrysler dealers  are eligible for long-term credit lines, and which ones have to find their own financing sources.

I wonder how much having to transfer to this new financial company is going to hurt Chrysler's chance at survival. It seems like it will definitely slow down the recovery process if anything. Also, i wonder why a financial institution named after Chrysler refused to lend them money after the bankruptcy declaration. There is much to learn here....

My third article was called "How business will wage war on Obama tax plan", and it talks about how business will fight Obama's overseas tax shelters that were supposedly loopholes for corporations. One of the most contested loopholes is letting companies not pay U.S. taxes on oversea investments until the money comes back home, allowing them to stash profits and jobs overseas. Big companies have already started to form coalitions to fight the administrations plan, and have 4 major points they are addressing. 1) that america is unique in taxes overseas subsidiaries and the loopholes are necessary to keep American business competitive, 2.) that the action would be bad for an ailing economy, because by making them less competitive, your giving multinational businesses incentive to move headquarters, 3.) the companies are drumming up local stir by appealing to lawmakers in their own states, and 4.) companies are stressing that changes to deferral should only happen in the context of a broader rewrite of the tax code, one that can properly compensate a little for these new expenses.

In my opinion, these companies are completely right. It seems to me that Obama did not do his homework on this one, and that this tax change is only going to hurt the American people. rather than helping them. If these companies are pissed enough to move out of the country for this, I think Obama should reconsider instituting it. If America is the only country that taxes its country's abroad business investments, why take it any further than that?

whatever

My first article today was named "Microsoft ordered to pay $388 million in patent case" which talked about the case between Microsoft and Uniloc. Uniloc claimed back in 2003 that Microsoft infringed on their patent for anti-piracy software  in Microsoft's Windows XP operating system and parts of its Office suite of products. The software generates unique identities for licensed users and prevents unauthorized use of or copying of programs. The damages award goes down as one of the largest on record for patent law disputes.

Assuming the correctness of this verdict, I plainly praise the American system for this triumph over big business. For years Microsoft has nearly had monopoly over the software industry and it seems has done everything in its power to keep it that way. With all the other negative things in our country right now like the economy and foreign disputes, I enjoyed stepping back and appreciating what our American system is capable of doing, which most other countries can not brag of: Uniloc, a small, almost unheard of company, wrenching over a third of a trillion dollars from one of the biggest companies in our country. 

The second article I read was called "Auto parts shares jump as GM, Chrysler launch aid". This article was about the effectiveness of government-backed assistance programs for parts suppliers have had. The government as pledged up to 5 billion to help auto suppliers, and will give 2 billion to GM to support suppliers, and 1.5 billion to Chrysler. The success of these types of programs determines the kind of restructuring these huge businesses will have to endure in order to survive the recession, with GM teetering on bankruptcy and Chrysler creating an alliance with the Italian car-maker Fiat. Germany has boosted car sales by introducing a car scrap program, such as the one proposed but denied in the U.S. The only place seemingly immune to this auto-industry meltdown in China, where vehicle sales for March could hit a record high.

Its good to hear that at least one of the gambles the government used with our tax money may help to spur recovery and help the economy rally. I was skeptical about this huge government spending plan at first, but now feel like its preventing a lot of excess damage to the economy. What I am worried about still though, is that now with the government having huge stakes in these companies, what's their plan for eventual withdrawal? Do they even have one? Or are they planning on overseeing these industries for ever? I hope not, because I feel like that could hurt the ability of these companies to take normal industry risks.

My third article is called "GM stock drops, Nissan posts losses amid downturn", which was about the huge drop in GM shares. They dropped to the lowest level since the Great Depression after the executives of the company reported selling their stocks. Also, Nissan posted a fourth-quarter loss and forecasts a bigger-than-expected annual loss. Meanwhile, Chrysler is going through the bankruptcy process, selling its assets to Fiat, a union-trust, and U.S. and Canadian governments. This will come with a lot of plant closings.

It seems to me now that all the government bailout for the auto-companies might have only helped to a point. If GM goes bankrupt with nobody buying its assets then what is going to happen to all their employees? They won't be getting jobs from Chrysler because they'll be closing off plants and not opening any. However, at least a good portion of the suppliers and lenders who stood to lose their jobs didn't.

may 10

In my first article "What investors need to know about the Stress tests", the author talks about the results of the stress tests applied to the 19 largest U.S. banks, including which ones need to raise additional capital and how much. The article explained the adverse scenario, but that the banks do try to politicize their numbers to look better for the market. The prospective survivors of the stress test, those that seem viable enough to withstand further economic downturn, are expected to become bigger, strong, and earn greater returns that will offset the balance sheet deterioration. Some bank executive thought the bigger companies such as JPMorgan Chase $ co and Bank of America Corp are going to be earning a lot of money over the next few years since their deposit bases are bigger than they've ever been.

As a person that never really understood the stress test thing other than the clues given by the name, this article shed a little bit of light on it for me. Basically it seems like the government puts the bank through a hypothetical adverse situation and see's if its assets and capital are strong and dependable enough to survive. Also it seems like they're seeing if any banks are in need of more capital. However, the system is being played by the companies, who don't want to lose stockholder confidence if they don't fare well.

My second article "U.S. infrastructure bank no quick fix" was about Obama's vision for a national infrastructure bank. He set aside $5 billion for an entity to provide direct federal investment for roads and highways. Obama's plan calls for the bank to include 25.2 billion through 2019, though the country needs $210 billion a year in infrastructure (3 times current rate), that the need may be too great. Many politicians like the idea, but say it faces too many political and monetary risks. Also, funding a bank is hard because bank investments have to come with returns to stay afloat, and the only way to do that is with tolls or taxes, which are very unpopular.

This article was very interesting. I have never heard anything like this before.  It reminds me of the programs and institutions FDR implemented with federal money when he was in office during the Depression. It seems like a good idea since infrastructure is such a huge cost in America, with our developed system. A system built around focusing on this issue seems like it could improve the standards which i feel like, will serve us in the long run, because better built roads will save us money.

My last article "Fed rejects request to help credit card holders", which was about how the Fed Reserve rejected a request to force credit card companies to immediately halt retroactive interest-rate increases on existing balances. The government already has dealt the with the companies directly, and feel like pressuring them by helping the credit card holders can cause unexpected results and hurt their current efforts. The laws that are being pushed onto the companies will make credit card pricing more transparent and predictable.

It seems to me everybody is lining up for help nowadays. Everyone that is in some sort of trouble, whether its an institution, or an individual, wants something. The economy is bottoming out, and the government can't afford to help both the individuals and the institutions, because that would pretty much mean supporting much of the nation.