We have a president who thinks he is king.  What's worse is that he appears to be right, until things get so bad that the citizens will rise up against him.

For all of the fraud and stupidity that has transpired thus far in this financial crisis, I was absolutely floored by what happened recently with Chrysler's bankruptcy.  The Obama administration ramrodded through a deal with completely obliterated black letter law in regards to who has precedence in a bankruptcy.

Pension funds and investors--regular people just like you and I--had invested in Chrysler bonds.  These bonds are, by law, senior to other debt in a bankruptcy.  Obama decided that it was more politically expedient for the unions to take precedence, and so it was.  Pensions and individual investors received basically nothing, while the unions who contributed to Obama's campaign got full payment on their debt.

The administration argued that this was better for the economy.  Ok.  So what.  You have sworn to uphold the Constitution of this country.  You lied.

The Supreme Court issued a temporary stay on this decision, but they caved today and it will proceed.  So much for checks and balances.

I was willing to give Obama the benefit of the doubt, but this is indisputable.  He does not care about the rule of law, he is already campaigning for the next election.  The laws of this country be damned, all hail King Obama.

This is a sad day.  I really don't care what he does from this point on, the Chief Executive of this country has proven beyond any doubt that he does not care about fulfilling his duties as the head of the Executive branch--that is, enforcing our laws--but is more concerned about scratching the backs of the people who scratched his.

If I had any shred of faith left in our government before today it is gone.  Sorry all you Obama-supporters out there--I know many of you--your guy is an empty suit with no moral compass or sense of duty.  Our Commander in Chief blows with the wind.  Yay.

By the way, this is going to do wonders for the credit markets.  When you're thinking about buying debt that is supposed to be senior to other debt, you'd like to know that that is, in fact, what you are buying.  When this can be changed by the whims of The King you might think twice.  So long, credit market, nice knowing you.

Hi ho, all hail King Obama.

Great read from Bloomberg:

They're right.  The longer he delays the inevitable, the more this will be seen as "his problem".  His honeymoon is about over.  Unless Obama grows a pair quickly and forces this problem to clear, he is going to preside over four years of a declining economy and the Republicans will have a field day in 2012.

Maybe he's not the political genius everyone thought he was.  Perhaps it was just the laughably anemic competition he was facing.

This idea actually build on my last hot trend for 2009, Risk Aversion.

When you can't trust anyone else with your money, the one thing you can invest in, with certainty, is yourself.

When people get laid off, they have a choice.  They can either sit on the couch and wait for a job to come along (they'll be waiting a LONG time), or they can invest in themselves and their own personal brand and create opportunities for themselves.

Simply because of the fact that many very bright people are being laid off right now, and will continue to be laid off throughout 2009, I believe we'll see an uptick in people investing in themselves.  This can take several forms:

• Self-education, which is free for the most part, resulting from more reading and personal investigation.  Included in this category are laid-off software developers contributing to open-source efforts, etc.
• Back to school.  I can see junior college enrollment going way up as people go back to school to learn a new trade or career.  (Conversely I can see 4-year college enrollment tanking as they are spectacularly overpriced right now, and there are a ton of recent graduates with $100k+ student loans crying in their beers)
• Entrepreneurship:  when you know how to do something well, there's no better investment than selling your skills directly.
• Starting Web sites:  starting a Web site like a blog or a niche informational site is a great way for people to expand their network and their brand.  But it does requires a SIGNIFICANT amount of time, time which most people aren't willing to invest in normal circumstances.

Personally I think this is a great thing.  Forcing people out of their comfort zones may not be the most pleasant thing for those people, but there's a big opportunity here for people to grow and actually come out of 2009 in a better position than they came in.

Also, I'm looking forward to a more educated populace; hopefully it won't put up with all the BS being sprayed across the country from Washington

A post by Erick Schonfeld at TechCrunch today really got me riled up:  The SEC has shut down Prosper, a peer-to-peer lending site.  This was up in the air until yesterday:

Yesterday, the SEC issued its formal cease-and-desist letter (embedded below or download PDF), outlining its reasoning for characterizing Prosper as a seller of investment, something prosper had vigorously resisted in the past by arguing that it was merely a marketplace matching lenders and borrowers. But the SEC is having none of that.

If this sounds familiar, it's because this is an exact rerun of what happened with the original Napster and the music industry, only worse in my opinion.

The key here is that Prosper itself was not lending or borrowing, it was simply matching up willing borrowers and willing borrowers.  It also provided additional services such as collection and tracking.  The HORROR.

The real fact is, if private citizens were allowed to freely lend to one another, the private banking cartel that is our central banking system would lose the little control they have over the economy.  The free  market would freely set interest rates and people and businesses would be free to do an end-run around our corrupt and bloated financial system.  The financial engineering that has allowed Wall Street to siphon off trillions of dollars in profit at our expense would be crippled.  The SEC is simply acting as the enforcement arm of our private national banking cartel.

Don't fall under the protection of the cartel?  Goodnight, chump.

Over the past several weeks the financial markets have undergone a tremendous amount of stress. What you are witnessing is the result of common sense being thrown out the window.

The abomination of legislation which has resulted from this mess includes, among other horrible things, permission for Hank Paulson to unilaterally spend your money without permission from ANYONE and with complete protection from any court or legislative body:

Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Welcome to the USSA.

Obama finally won the primary and can now start down the road to becoming our next president.  It's in the bag at this point.  McCain is a dishonest man who looks like a dead chipmunk, and he's also a Republican.  This one looks like as automatic as they come.

I'm still leery of Obama, but I'm holding out a sliver of hope that he's actually different.  We should know within the next 12 months.  I'm not happy at all that he'll most likely raise the capital gains tax--I worked more twenty hour days earning my money than I care to remember, and nobody has a right to take that from me without my permission--but if he actually reverses the unconstitutional acts that Bush put in place while in office it will be a price worth paying.

I just hope he understands the gravity of our national debt situation, because it's directly tied to the dollar and ramping commodity prices, and if it's not addressed--SOON--citizens will be out in the street with pitchforks calling for somebody's head.

I also hope that he has more sense than to pick Hitlery as his VP lest he find himself in Robert Kennedy's situation.  The ego on that woman boggles the mind.

Just hours after I had written letters to my Congressmen about the Bear Stearns bailout, I read Karl Denninger's post regarding the same.  Karl is one of the people whose opinion, knowledge, and insight I truly value, and when he speaks I listen closely.

He had this to say:

"It is widely reported that both Hank Paulson and George Bush personally "signed off on" The Bear Stearns "bailout" last Sunday. As such their direct and indirect actions, in my view, constitute a "High Crime and Misdemeanor" within the meaning of the United States Constitution and therefore subject George W. Bush to impeachment proceedings as proposed in the above sample article for same."

I know there are many people who believe that Bush should be impeached for many other reasons, but I don't care to comment on those here.  What I will say is the Bear Stearns bailout happened here and now, and it certainly seems to be a blatant and outright violation of the trust of the American people.

Karl links to John Hussman who writes in no uncertain terms:

"The Fed did not act to save a bank, but to enrich one. Congress has the power to appropriate resources for such a deal by the representative will of the people – the Fed does not, even under Depression era banking laws."

I agree with both of these men.  What has happened, folks, is that the Federal Reserve, the private company that has only the mandate of maintaining price and currency stability, has unlawfully promised $30 billion of OUR money to the JP Morgan Chase company.

This is NOT lawful, this was NOT warranted, and the Federal Reserve was under NO circumstances authorized to do this.  The only end result that you or I will see because of this is that the price of gas, bread, and mortgages will go up further.  JP Morgan Chase has essentially been guaranteed $30 billion of our collective tax dollars.  It is our elected representative's duty and obligation to act on our behalf and take whatever actions necessary to punish those responsible for breaking the law, and I hope that you will join me in letting them know that the kind of unlawful actions we have seen in EXTREMELY recent history are unacceptable and WILL NOT be tolerated.

Karl has started a new petition to impeach George Bush as a result of his recent actions to enrich JP Morgan Chase at our expense.  I urge you to put your John Hancock to it as a responsible citizen of our country.  The proof is there in black and white, our elected representatives have betrayed us in a very fundamental and unmistakable way.  It is incumbent upon us to act.  If you have the time I would urge you to write your Congressional representatives on your own as well.  Your personal financial future may depend on it.

We are in dark times here folks, I hope and pray that our country can emerge from this crisis with some semblance of honor and integrity intact.

I hate to sound like a broken record, but this Ron Paul phenomenon is just amazing.  And I'm not saying that because I'm a supporter, but this guy has literally picked up so many passionate supporters that they're moving financial markets now.  The Internet is no longer just an ancillary information channel in 2008--it is THE information channel.

Background:  FOX News is sponsoring a debate between Republican candidates on January 6th.  Problem is, they're excluding the candidate who raised the most money in the 4th quarter--Ron Paul.  In response, his supporters coordinated a one day sell-off of News Corporation (NYSE:NWS) stock today.  And it has already dropped the stock price by almost 3%.

I've never heard of this type of ingenuity in stuffing a candidate down the Old Media's throat.  After shattering all kinds of fundraising records, Paul's supporters are now literally sucking the lifeblood out of FOX because it pissed them off so much.  I'm sure FOX is now paying attention.

It will be interesting to see other news outlets' take on this.  Paul's supporters are singlehandedly ripping the "Fair and Balanced" label off of the network and at the same time depantsing it in the financial markets.

Chrismas is over, and it's officially 2008.  Wow, this was really a fast one for me.  Between getting married, selling Latigent to Cisco, moving to Boston, and getting acclimated to life at Cisco, I barely time to stop and breath.  But I had a couple of days to relax and collect my thoughts over Christmas and, as I like to do every year, I've put together a list of my predictions for 2008.  So, without further ado, my predictions for 2008:

1. The recession (that we are already in the beginning stages of if you look at the data instead of listening to the pump monkeys on CNBC) will make 2008 a slow and cautious year.  Budgets will shrink and new projects will be put on standby as the US and world economies slow as a result of the global credit market going into further gridlock.
2. After a horrific year in 2007 the dollar will rebound a bit, making outsourcing a hot ticket item once again (as it gets cheaper).  This will happen because the rest of the world will get hit even harder than we will by the recession.  US companies that are counting on international business to prop up their bottom lines will be severely disappointed as exports become more expensive to foreign customers and international budgets shrink as well.  Many (more) CEO’s will lose their jobs.
3. On the bright side, the Internet’s effect on politics will be one of the biggest stories of the year.  If you thought Howard Dean was an interesting story because of the way he used the Internet to coordinate and attract support, well, you ain’t seen nothing yet.  Ron Paul’s supporters have coordinated themselves to the tune of over $6 million in 24 hours, and this will continue to be an interesting story to watch throughout the presidential race.  The floodgates are open and Old Media is no longer the gatekeeper.
4. Google will attempt to integrate its Orkut social network into its iGoogle/Google Docs businesses.  Last year I predicted that MySpace would become un-cool and Orkut would take its place.  Well, I was right on half of that--in 2007 FaceBook became the new hip online hangout, but Orkut only gained popularity overseas.  Google recently announced that they’re fleshing out the profile aspect of their Google accounts, and it only makes sense to me that they will eventually integrate their Orkut social network with their Google accounts/iGoogle/Google Docs products.
5. Online identity will become a prominent issue, and OpenID will benefit.  Will 2008 be the year when we see the first high-profile online identity theft?  I don’t know, but I know that it will happen sometime soon.  As soon as someone famous loses control of their online identity you will see this become a VERY hot issue.  It may be the first time you see a search engine optimization specialist interviewed on the evening news :)
6. FaceBook will *start* to lose market share to emerging distributed social networks that will be born in 2008.  2007 was the year of FaceBook, primarily because they started opening up their platform and this created a flood of interesting applications.  But there’s only so far a fundamentally closed system can open up before it risks letting outsiders cannibalize its revenue stream.  I think FaceBook has already reached that point, and that opens up the door for more open systems to come in and gain market share.  OpenSocial is a step in the right direction, and the work being done around personal data portability is only going accelerate this shift.
7. Privacy and personal data ownership will be a critical issue for Web-based businesses.  As businesses start hitting the limit of what a strict advertising-based revenue model will allow (see above), they will test the limits of their users’ patience by mining user data and selling that data.  They will push and push until they find the line that they cannot cross.  FaceBook Beacon was just the first example of this phenomenon.  Either businesses will hold their users’ interests above all else, including profit, or they will slowly compromise their users in order to extract more money from them.  If history is any indication—and it usually is—we can expect them to compromise their users’ privacy.  This will bring the first users to distributed social networks.
8. Google will attempt to diversify its revenue streams.  You can already see this beginning with Google’s push into content with its Google Knol product.  Right now Google is a one-trick pony—it makes revenue from advertising.  It wants more, obviously, such as ALL of the advertising revenue on the content side.  In order to justify its insane stock valuation it will need to come up with a ways to collect a LOT more revenue.  The trick here is going to be coming up with new revenue streams that don’t cannibalize and piss off the ecosystem that has developed around it.  If Google starts competing with the content producers, content producers will start loving and promoting somebody else.  Once that happens, Google is no longer the unquestioned King of Search--content producers will start optimizing their sites for more profitable search engines, and the monopoly will start to crumble.
9. Companies with no sustainable long-term revenue streams (ie, companies whose main attraction is becoming commoditized and turned into features on other sites) will be sold while they can still get big money for them (they had better move fast, before belts start tightening).  This includes Twitter and Digg.  Rupert Murdoch may be tempted to add to his collection of terminally ill businesses (see:  MySpace, Wall Street Journal)
10. Mobile applications will become increasingly Web-based, perhaps hooking into OpenSocial-type API’s provided on the client device to offer a more seamless experience.  The iPhone and iPod Touch (one of the predictions I hit on last year) really opened the floodgates here as they’ve shown that Web applications can actually be usable on a mobile device.  WAP, R.I.P.
11. Cloud/grid computing will continue to develop and gain market share.  If Amazon can flesh out its SimpleDB service to be a bit more relational and analytics friendly it could put a serious dent in the small business database server market.  Experience with utility computing will be one of the hottest resume bullet points of 2008 (and every year thereafter).
12. You will see more content producers choosing to bypass distribution channels and take their products directly to the consumers.  I predicted last year that the NFL network would start doing this, and they have.  They’re now showing exclusive games on their network, and also streaming games off of their Web site.  Look for more high-profile consumer entertainment products to follow suit as trailblazers like the NFL Network show that you don’t need an expensive distribution channel to make money.

That’s it for this year--I feel pretty good about these predictions actually coming to fruition in 2008.  Whatever happens, it should be an incredibly interesting year, it feels like we’re on the cusp of some revolutionary new developments in the personal online space in particular.  As long as the recession doesn’t derail everything, that is :)

On the resolution side of things, I started a low-carb diet today to drop the Christmas poundage, I'm picking up last year's resolution to become ambidextrous, and I'm also resolving to blog more frequently.  Until Christmas I was of the impression that 2008 couldn't POSSIBLY be as eventful for me as 2007, until we found out at my wife Jessica is pregnant, so there goes that idea.  But, I'm still shooting for a good success ratio!