The Conspiracy: Drugs in the Black Communities

The Conspiracy: Drugs in the Black Communities

war on drugsJamal stood before the, what he thought was a Mexican, and shook his hand, “pleased to meet you too”. “You’ve sold before,” the Mexican said in his thick accent. “Sure I’ve sold,” Jamal replied. “I’d like to introduce to you something new,” said the Mexican. The man to his left opened a briefcase, and there was very obvious bags of cocaine in it. “That ain’t new,” Jamal said, quite annoyed. “No, my friend, this is not new, but this is,” he held in his hand 5 off-white crystals. “I will teach you to turn that, into these,” as he handed him the crystals. Jamal held the crystals up and turned them about. They were definitely nothing he’d ever seen before. “You’re going to show me how to turn cocaine into this?” The Mexican nodded. “Yes, it’s called crack.”

Sydney took a sip from the bottle, not knowing what to think. Yes, he had sold grass, but to go to a meeting about grass. What was it about? Who goes to meetings about grass. The white boys come peddling their grass at the door, and you turn around and sell it. No meeting. No driving miles from the strip. He wasn’t nervous, but he didn’t know what to make of it. The car stopped. This was clearly near the docks. Everyone got out of the car and there were three other cars. There were white people everywhere, and not that normal grass growers he was used to. These guys were much older. And, he could tell they were armed. “No guns, Jamal had always told him.” Seemed like bad advice at times, but his reasoning was logical. If the police catch you with drugs, having a gun makes everything 10 times worse. They never hold for more than a day. These white cats looked like the hippies he saw on tv. One of them had a duffel-bag”Can you move the grass man,” asked one of them. Of course he could move the grass. They all looked at each other. They motioned Sydney and his partners to follow them. Behind the cars they saw rows of white, unmarked MAC trucks. “Here’s the grass man,” he pointed at the trucks. The other guy threw the duffel-bag to Sydney. “Don’t worry if you mess up, there’s way more, where that came from.”

Alphonze got into the limo. Two white girls were all over him in an instant. Across from him, sitting in a seat directly facing him, was an older white cat. “You the kid,” said the white man. Alphonze nodded, since no one else was in the limo with him. “I’m gonna send you my boy and he’ll show you the ropes,” he said as he tossed him a bag of something. Alphonze took his arms away from the adoring girls and held up the bag. It had, what looked like, a bunch of prescription drugs. There were all sorts of pills, and tiny strips of paper. “Hey, you got a car,” asked the white man. “Sure I got a car,” Alphonze said. He thought this was getting stranger by the minute, but money is money. “Good, I want you to come to some of my parties on the weekend,” he said as the car pulled to a stop. He motioned for Alphonze to get out. Next to the limo was a guy sitting on the hood of a Cadillac. It was a young white cat. “I’m your new best friend. Get in.”

Prior to the 70s there were little to no drugs in the Black communities. Black people were hard working and lived in segregated communities. They had their own businesses and services, since they were segregated. After the civil rights movement, that all changed. Black people were able to shop in town and even be in town after dark. Black people flocked to the white stores. You see, white stores were owned by white people. And, the white stores had white clients, that had white money, which was a heck of a lot more than Black people had. While Black stores were just as clean, reinvestment Black dollars were hard to come by in the poor Black communities. So the white stores were very often shinier and newer than what the poor Black people were used to. Black stores closed down across the land, plunging poor Black communities into even deeper poverty.

Then came the drugs. As if by magic, it showed up. Quantities of drugs flooded the community. It was cheap at first. So cheap because there was so much of it. The police seemed to not notice. Hell, most police, in those days, didn’t go into Black communities, since Blacks had their own police at first. But even those were fired, since cities refused to pay for separate Black police and fire stations and other services. The drugs were everywhere and new drugs, never seen before.

Something was wrong, very wrong. Families started to break apart. And white sentiments of “free love”, something that Black people, who were very traditional at the time, did not agree with, started creeping into the communities. Pockets of Black families started meeting and discussed what was going on. Then it came to a head when a white journalist happened into a Black community, researching the drugs. The families and the journalist pieced together a conspiracy that went so deep that the very foundations of the countries would be shaken.

They’d had enough. They called a meeting with the mayor and city council. Everyone was shocked and surprised when the head of the CIA showed up, unannounced. For 2 hours they yelled back and forth. Why was he there. And, he admitted nothing. The journalist questioned him, time and time again about his findings. The families questioned him about the connections. The mayor was out of his league and sat stunned.

Shortly after that, the largest drug dealers in the country started going to jail. It was an answer, but not a real answer to what was really going on. Because the drugs never went away, and they never stopped coming, not even a little bit.


  • – there is strong evidence to support that the US federal government has been involved in, and is actively involved in introducing drugs into the Black community following the civil rights movement
  • – there is strong evidence that the US federal government funded several CIA covert operations with the sale of drugs in the Black community
  • – there is strong evidence that the US federal government trained local drug dealers in making and introducing crack cocaine, meth amphetamine and other harsh drugs into the Black community
  • – there is strong evidence that the US federal government were in direct contact and helped introduce some of the most notorious drug crime families directly to key Black drug dealers in the Black community
  • – there is strong evidence that DEA, and the US federal government import drugs and funnel them into the Black community
  • – there is strong evidence that the sale of drugs in the Black community helped fund the entire Florida economy, to the tune of 70% [no other research into other states was made, so it cannot be said whether or not it holds true of such high volume drug centers like California or other states ]
  • – there is strong evidence to support that colonel Oliver north and president Ronald Reagan initiated, organized or knew of drugs being sold in the Black community to fund their Iran / Contra operation, to give weapons and arms to the Contras in Central America

Understanding Obama’s Sequester Hoax

Understanding Obama’s Sequester Hoax

obama pinocchioTo understand the sequester hoax and scam we have to actually go back 2 years. The bill was the final chance in a series of proposals to resolve the 2011 United States debt-ceiling crisis, which featured bitter divisions between the parties and also pronounced splits within them. Earlier ideas included the Obama-Boehner $4 trillion “Grand Bargain”, the House Republican Cut, Cap and Balance Act, and the McConnell-Reid “Plan B” fallback. All eventually failed to gain enough general political or specific Congressional support to move into law, as the midnight August 2, 2011, deadline for an unprecedented U.S. sovereign default drew nearer and nearer.

The solution came from White House National Economic Council Director Gene Sperling, who, on July 12, 2011, proposed a compulsory trigger that would go into effect if another agreement was not made on tax increases and/or budget cuts equal to or greater than the the debt ceiling increase by a future date.

Ultimately, the intent of the sequester was to secure the commitment of both sides to future negotiation by means of an enforcement mechanism that would be unpalatable to Republicans and Democrats alike. President Obama agreed to the plan. House Speaker John Boehner expressed reservations, but also agreed.

On July 26, 2011, White House Budget Director Jack Lew and White House Legislative Affairs Director Rob Nabors met with Senate Majority Leader Harry Reid to discuss the plan. Reid, like Boehner several days before, was initially opposed to the idea, but was eventually convinced to go along with it, with the understanding that the sequester was intended as an enforcement tool rather than a true budget proposal.

On the evening of July 31, 2011, Obama announced that the leaders of both parties in both chambers had reached an agreement that would reduce the deficit and avoid default.[6] The same day, Speaker of the House John Boehner’s office outlined the agreement for House Republicans. One key element in the deal being reached and the logjam being broken earlier that afternoon was U.S. Vice President Joe Biden’s ability to negotiate with his 25-year Senate colleague, Senate Minority Leader Mitch McConnell.[18][19][20] Biden had spent the most time bargaining with Congress on the debt question of anyone in the administration, and McConnell had viewed him as the one most trustworthy. – wikipedia

In essence, because the president refused to budget cuts and wanted the debt ceiling raised, he and his staff came up with the sequester as a mechanism to automatically kick in, if they still hadn’t agreed to cuts and spending a year later. This sequester is that mechanism.

Obama Blames House Republicans

Obama is constantly blaming house republicans for things he does. It is no surprise then that he turns around and blames house republicans for a proposal he and his staff came up with.

Bob Woodward’s “The Price of Politics”

page 215 July 12, 2011

They turned to [White House national economic council director Gene] Sperling for details about a compulsory trigger if they didn’t cut spending or raise taxes in an amount at least equivalent to the debt ceiling increase.

“A trigger would lock in our commitment,” Sperling explained. “Even though we disagree on the composition of how to get to the cuts, it would lock us in. The form of the automatic sequester would punish both sides. We’d have to September to avert any sequester” — a legal obligation to make spending cuts.

“Then we could use a medium or big deal to force tax reform,” Obama said optimistically.

“If this is a trigger for tax reform,” [House speaker John] Boehner said, “this could be worth discussing. But as a budget tool, it’s too complicated. I’m very nervous about this.”

“This would be an enforcement mechanism,” Obama said.

page 326 July 26th

At 2:30 p.m., [White House Budget director Jack] Lew and [White House legislative affairs director Rob] Nabors went to the Senate to meet with [Senator Majority Leader Harry] Reid and his chief of staff, David Krone.

“We have an idea for a trigger,” Lew said.

“What’s the idea,” Reid asked skeptically.


Reid bent down and put his head between his knees, almost as if he was going to throw up or was having a heart attack. He sat back up and looked at the ceiling. “A couple of weeks ago,” he said, “my staff said to me that there is one more possible” enforcement mechanism: sequestration. He said he told them, “Get the hell out of here. That’s insane. The White House surely will come up with a plan that will save the day. And you come to me with sequestration?”

Well, it could work, Lew and Nabors explained.

What would the impact be?

They would design it so that half the threatened cuts would be from the Defense Department…. The idea was to make all of the threatened cuts so unthinkable and onerous that the supercommittee [tasked with making additional cuts] would do its work and come up with its own deficit reduction plan.

Lew and Nabors went through a laundry list of programs that would face cuts.

“This is ridiculous,” Reid said.

That’s the beauty of a sequester, they said, it’s so ridiculous that no one ever wants it to happen. It was the bomb that no one wanted to drop. It actually would be an action-forcing event.

“I get it,” Reid said finally.

page 344 July 30th

The president and [White House chief of staff William] Daley were on the patio outside Daley’s office with [adviser David] Plouffe, [Treasury Secretary Timothy] Geithner, Lew and Sperling when they got word that Biden was making progress with [Senate Minority Leader Mitch] McConnell. It looked as if Republicans were ready to agree to a Defense/non-Defense sequester in the trigger.

Plouffe couldn’t believe it. These guys were so afraid of increasing revenues that they’re willing to put Defense on the chopping block? Republicans’ revenue phobia was so intense that they would sell out the Pentagon.

“This is a deal we can probably live with,” Obama said, willing to do almost anything to salvage something and prevent catastrophe.

Jack Lew delivered a speech, however, in Tampa publicly denouncing the house republicans for the sequester.

“There was an insistence on the part of Republicans in Congress for there to be some automatic trigger…. [It] was very much rooted in the Republican congressional insistence that there be an automatic measure at the end.”

Bob Woodward couldn’t believe it.

“After reviewing all the interviews and the extensive material I have on this issue, it looks like President Obama told a whopper,” Woodward said.  “Based on what Jack Lew said in Florida today, I have asked the White House to correct the record.”

So is the sequester a massive budget cut? If you pay attention to the president, the sky is falling, the sky is falling. But, after carefully look at it, you see not just cracks in the theory that the sky is falling, you see massive gaping holes, vast canyons you could drive an army through.

The sequester is not a budget cut. The sequester is a stop to AUTOMATIC INCREASES. Most Americans are unaware how out of hand congressional spending is. Americans don’t realize that there are automatic increases written right into the budget. What is illogical about it is, it is not tied to anything, like say population increase. It is haphazardly written into the budget plan.

This sequester was proposed by the president to call the house republican’s bluff. They had proposed over 50 different cut options to the president, which he rejected. He wanted the debt ceiling increased and spending upped. This was proposed as a test to force house republicans to come up with spending and cuts. Unfortunately, the president has denied and refused every single proposal by the house republicans. And, now, he turns around and plays dirty politics by saying it was their idea to have a sequester.

He wants his cake and to eat it too.

Charities Left Out in the cold in Cash for Clunkers Deal

Cash for Clunkers What is it?

I’ve mentioned before that the stock market it is a zero sum gain, I win at your expense, not a win win situation. In the cash for clunkers program the government is footing the bill for $2 billion. Now when I say the government is footing the bill, I mean US. But the cars that qualify for the trade in program are perfectly running cars; can’t be too old; can’t have bad emissions; can’t have great emissions; have to be paid off.

Now I thought on its face that those criteria were just awful. Why would a rational thinking American turn in a car and burden themselves with more debt? This is why were are in this mess to begin with. This is insanity. This makes me mad.

Not only does the cash for clunkers program make me mad, but now I’ve found out that these idiots fell for it hook line and sinker and the program is an “overwhelming success”. Idiocy is running rampant in America. They should have an intelligence quotient for people to call themselves American.

Now I am totally ballistic. I am so fuming mad I could spit.



Enter the Charities

In the stimulus package, that Barrack Obama signed into being, you’ll see how in that bill, charitable donation tax write offs were lowered. I don’t know how a peace loving, hippie acting, granola eating, president could completely shaft charities like that.

Regardless of what some idiots who stick their heads in the sand say, charities do benefit heavily due to people wanting a tax write off.

As if that weren’t enough, let’s take a look at the Cash for Clunker stimulus package, i.e. car industry bailout.

The cars being turned in for vouchers are the cars that previously would have been the exact cars donated for a tax deduction. Car donations were left completely out of the entire cash for clunkers program, even though both the Congress and Senate were told of the problem months and months before.

Apparently, charities are not a big enough lobbying group. [ I guess they didn’t “donate” $1 million like Goldman Sachs did… ooops did i say that ]

And, Obama is gloating over the plan, and hoping it will get renewed. So once again, this president is shafting them.

I just don’t get it.

I say donate your car. If you really need a new car so badly, you can get dealer incentives to buy upwards of $4,500 anyway. Give your old car over because I’m not liking to foot your stupid bill in this $2 billion car bailout, because that’s all it is anyway.

Don’t misunderstand me, I am not a desocialistacrat nor a repukeblican. Both are the same thing.

The Election is Over: How is that Fair Share Scam Working for You Mr President

How is that Fair Share Scam Working for You Mr President

fair share scamThrough all of the 2008 and 2012 campaign Mr. Obama continuously chanted about how the rich need to pay their “fair share.” Back at the ranch the proof came in that not only did the rich pay their fair share, but that they paid your fair share as well, to the tune of 30% by the one percenters and 60% by the top 10% wealthiest in the nation. In fact the top 53% of US taxpayers pay 100% of the tax revenue. There is no 99%. it doesn’t exist.

But wait, there’s more!

Not only did an Obama report show how the rich pay all the taxes, but the report showed conclusively since Kennedy, that lowering tax rates increases federal revenue. That bears repeating. A Whitehouse report showed that lower taxes brings in more money to the government.

Before you jump to conclusions that Mr. Obama did not see the report, he did. He signed every page of the report, and read it, and went over it with Timmy Geithner.

The Coming Obama Created Economic Depression

No one likes to say it, but the 2008 economic situation was an actual depression. The federal reserve pumped so much money into the economy, that it created a top heavy situation that stopped the very large firms from crashing. That does not mean though, that the rest of the nation was not in a depression. We were and probably still are, if you can find honest numbers on unemployment and business closure.

But, fast forward to 2013. Obamacare and his raising of taxes, even for the 99%, is setting the stage for a knock out punch. A real depression is coming. Thousands of jobs, in a market that has already lost millions of jobs, are prepped to be lost. Some top firms have already pledged to lay off thousands this year.

Couple Obamacare with higher payroll taxes and small firms will be lost. The end result is that, while large firms will feel the pinch on their bottom line and get rid of thousands of jobs, they’ll gobble up smaller firms that flounder. They’ll find themselves in a position  to be able to get into markets that they were never in before, and at a very cheap price, since small firms will be worth pennies on the dollar.

Conspiracies aside, it doesn’t take a genius to figure out that, regardless of intent, Obamacare and his pro-higher-taxes stance will destroy this country.

Are Private Equity Firms Evil: The Bain Capital Lie

The Bain Capital Lie

You Lie

It was a topic most Americans were sorely ignorant about and yet, driven into a frenzy over, Bain Capital. It probably sunk Mitt Romney more than any other issue. People saw past his Mormon cultism. People overlooked his tremendous personal wealth, which Democrats always try and say is a bad thing. People even overlooked his Romneycare, since Obamacare is already passed and threatens to turn this country into a 3rd world nation.

All of those claims were able to be ignored, but the Bain Capital issue was even brought up the day before the election. But, when one does a bit of research, they find that Bain Capital is not an inherently evil company.

Let’s compare it to a real life scenario:

  • a person doesn’t work their 40 hours for 2 weeks and take home half the paycheck they normally get
  • they cannot afford the bills they have
  • the bill collectors start calling, due to not receiving payment
  • the person goes to a bank, who refuses to give them a personal loan
  • the person then goes to a payday loan place that lends them the money, but gives them a very high interest rate
  • the person pays their bills
  • the person is again short on their paycheck
  • the payday loan place start repossessing the person’s items
  • the person curses the payday loan place and tries to get them shut down or take some other action against them

Continue reading Are Private Equity Firms Evil: The Bain Capital Lie

Congress 90% Tax on Bonuses: Wait Isn’t That Unconstitutional

Congress and the 90% Corporate Bonus Tax

The 2012 U.S. Congress
The 2012 U.S. Congress

A bill of attainder (also known as an act or writ of attainder) is an act of the legislature declaring a person or group of persons guilty of some crime and punishing them without benefit of a trial. Bills of attainder are forbidden by Article I, section 9, clause 3 of the United States Constitution.

What does that mean?  I means that congress is not to target any one group, nor can they punish any one group, without due process of law, i.e. taking them to court and having them go through a trial to reach a verdict for or against them.  Therefore the 90% tax on bonuses is completely unconstitutional. They would have to tax every business in the country, including non-corporations. Yet, in the frenzy of the “get wallstreet” atmosphere, they have gone on the talk circuit to get countrywide support for their bill to tax wallstreet bonuses 90%.

It is a punishment, in its fullest, for the compensation of an agent / employee of the business. They literally are asserting themselves in the middle of the relationship of the employee and the company. Notice that the payroll tax is general and is carried out by both employee and employer, both sides pay the payroll tax, which most people don’t know.  This would insert itself directly to wallstreet corporate agents to make them liable if they receive a bonus of some certain amount.

If they can do it here, that means the entire country is open to be taxed to death.

And, it seems they are headed that way. This year 2013, there is no 0% tax bracket for those making less than $10,000. That is dangerous territory. Who are the people making under $10,000 supporting? They can’t support themselves.

For all the activists for the “poor”, no one has spoken up about this. These activists normally support Obama. Now he has done something squarely against their agenda.

Will they react? Will they come out against him? Doubtful!

Certainly they are not going to go against taxing corporate wallstreet bonuses, which they should. And, they will not come out against taxing the poor.

Obama’s Economic Address At Georgetown University: Heavy on rhetoric light on solutions


Obamas Economic Speech
Obama's Economic Speech

In the end the crux of his speech centered around one word:  government, Government, GOVERNMENT!  Of course he promised hope for the economic future; investment in our education; getting green jobs; free health care  for everyone; and university tuition relief [which was met with thunderous applause at the university]

The constitution is clearly dead.  Due to the actions the congress has recently taken, Obama assumes in his speech that government should be the ultimate authority for the private sector.   Many times he alluded to the totally assumed fact that government should be the ultimate authority when it comes to determining fair wages, bank lending, lines of credit, investments for renewable resources.  At no point did he ever mention that he would be taking a backseat and applauding the private sector for taking initiative, without government intervention.

– On entitlement: the largest expenditure admittedly in the governmental budgeting, proposes entitlement reform supposedly but then he turned around and pushed for universal health care reform, not real entitlement reform.  In fact he was so dastardly that he said he would push for universal socialized health care reform this year.

– On financial planing: Again he totally assumed that government should oversee retirement.  [ I am not making this up ]

– On military spending: He went off on a tangent about a suggestion made about military overspending.   He then went into rhetoric about how we have spent so much in military spending and are yet “no closer to be safer”.  However, he did not mention removing troops from any foreign soil, the single most largest expenditure in the governmental budget.

Obamas Economic Speech
Obama's Economic Speech

At one point Obama quotes the scripture of the Wise man that build his house on Rock instead of sand, but then equates it to complete government oversight, trouncing the constitution in the meantime.  He said it only to put forth the idea that the government will NEVER AGAIN allow this crisis to happen.   This completely ignores the business cycle.  In fact most economist has state [who are not kenesian whack jobs] that there never was a crisis.  Corporate bailouts of wall street commercial banks is not a proper indicator of a nationwide economic crisis.  Housing ARM mortgage rate adjustments for individuals who were over leveraged is not a proper indicator of nationwide economic crisis.

The final straw was when he was again stepping all over the constitution and taking the lead from congress recent bill passage which specifically taxed wall street executive who took bailout money at 95% on their bonuses, in direct contravention of the constitution…. I mean he says it right in the constitution “thou shall not pass taxes targeting specific people”.  *sigh*  Obama said “we will implement rules that makes sure you get paid the correct amount for work that you have done” …….. since when did the government dictate salaries?  This congress is out of control and this presidency is not far behind it.  Bush laid the foundation for this debacle.

We’re in a crisis alright.   A crisis of the constitution going under and government taking over all of our civil liberties.  It won’t be long now that the gestapo will be goose stepping down the street demanding to see how much you make and how long you worked.  It won’t be long now that you’ll receive your weekly stipend from the government and the rest will be set aside for retirement and non existant social security and medicare.   It won’t be long now that the government will seize your bank and tell them they are paying their sales people too much in commission checks and that they are outselling their nearest competitor.   It won’t be long now that the police will knock on your door and demand to see your guns and ransack your house for contraband.  [they already do it to poor Black people I know, just kidding]

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Obama's State of the Union Address

Shakaama On Obama: The First 90 Days

Obamessiah ... this is getting out of hand.
Obamessiah ... this is getting out of hand.

I’m not defending Obama today.  However, I’m not so naive that I can’t see what is going on.  Today I will review the first 90 days.

It amazes me that people are so shocked that Obama gets into office and all of a sudden it’s politics as usual.  I am neither saddened by his actions so far, nor am i angered by his policies so far.

I have a political science degree.  So I am very aware of everything that is going on.  And, lets discuss this.

The bailouts

Everyone is so upset by the bailouts.  But, for every 2 people upset about the bailouts there is 1 person that is thankful for them.  You have to understand that the millions of Americans that are talking about “let them fail” do not think about the 30,000, 100,000 or million of employees of these companies that would be out of work.  So when these giant companies come to Washington, this is what Obama is looking at.  It is very easy to sit back and armchair quarterback this mess, but it’s a totally different story when a union 2 million strong comes through the door with the company president and they both beg for help.  It would take a nearly omniscient being to wade through this, and not have millions of people hurt.

He is the one
He is the one

Is that bad to think about those people?  No.  However, I’m pointing out the difficulties involved in this.  We give away millions upon millions of dollars every year to foreign countries.  JUST GIVE IT AWAY! as “aide”.  People complain about that under their breath, but no one speaks up.  All the American lobbyist who go to Washington for those countries, waddle right up to capitol hill for their clients.  Now the shoe is on the other foot.  However, no one is speaking for the people directly.
What are my hopes?

I would hope that Obama would be so charismatic that He didn’t have to be beholden to all these screaming memes around him.  Can you imagine if he had given 10 trillion dollars directly to us?  That would have boosted the economy.  Inflation would have skyrocketed overnight, but at least it would save our economy.  As it stands now, we don’t see the benefit and we still get the inflation.  Sadly.

President Obama Signs bill Alone
President Obama Signs bill Alone

Is Obama doing a good or bad job?  He’s the president.  He’s the wizard behind the curtain.  What can he do?
Ok understand this is politics. It’s not as simple as black and white.

He has to answer to people
He has to gain / call / demand political favors
He has moochers
He has blackmailers [no pun intended]

all of these factors go into every single word he speaks, and every single agreement / document he signs.

Talk about a walking target. This guy, unlike GHW and GW, is a newcomer and has to climb the ladder before throwing his weight.

Note i’m not defending Obama or anyone. Just want everyone to realize this is politics.  Yes we Americans want something, but capitol hill is a rat race unlike any other on the planet.   It’s sad, but true. Listen to Peter Schiff and rely on yourselves.  I’m proud of Obama as a black man. I’m sad about and for Obama as a Political scientist. But as a political scientist I understand the wizard behind the curtain.

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What Planet is Warren Buffet On?

The Oracle of Omana Warren Buffet
The Oracle of Omana Warren Buffet

Recently Warren Buffet has been appearing on the national scene, moreso than before.  He is now the darling of both the press and Washington.

He figured prominently during the bailout talks when he invested $5 billion in Goldman Sachs.  There was a proverbial gasp heard

The Warren Buffet Way
The Warren Buffet Way Click Here

round the investing nation at the time because everyone knew the financials were in trouble, in general, banking in specific.  But, let’s look at his deal.  At the time the stock seemed like a steal.  In fact, many thought he was taking advantage of the venerable bank.  For Berkshire Hathaway, it bought a US$5 billion equity stake in the dominant player  of the industry, and for its money receives a guaranteed dividend of 10 per cent a year on its perpetual preferred shares.  On top of that Goldman’s gave Berkshire 5 year warrants which give Berkshire the right to buy 43.5 million common shares of Goldman Sachs at a strike price of US$115 at any time before 2013.  However, banking stocks tanked, the crisis deepened, Goldman shares hit a low of US$47.41 on November 21st. After writing an op-ed piece for the New York Times on why he buys America, Mr. Buffet came in for criticism.

However, we are talking about Warren Buffet.  I’m often reminded of the movie “Wall Street” when i think of him.  Anything he purchases will sooner or later gather stragglers, who mistrust their own investment skills.  Goldman shares have doubled since November, closing at $111.93 last Monday.

“The Investment bank has had to change its business model, and reduce the amount of leverage it carries on its balance sheet, but some business areas are positively on fire with flow or client driven trading benefiting from wide spreads being charged and really bringing in the moolah.” [what a shocker, that actually works]

Benjamin Graham Click Here
Benjamin Graham Click Here

For every silver lining however there is a cloud.  The GE deal Berkshire got, with those same warrants, don’t look so delicious.  The warrants were for an aggregate cost of $3 billion @ $22.25 per share.  Ge closed at $10.43.  Yeah, not so much.

Warren Buffet Click Here
Warren Buffet Click Here

Which brings me to the next point.  Disciples of the value strategy, like Berkshire Hathaway’s Warren Buffett, focus on the long-term intrinsic value of a company, hoping to buy shares in good companies at reasonable prices.  For financial stocks—some of which haven’t or won’t survive the crisis—it’s nearly impossible to identify the long-term value, whether through profits, cash flow, or other measures.

But what are companies worth these days?  What is the value of a company that accepts TARP money?  Hard isn’t the proper word for what investors are up against when trying to figure this out, impossible is more like it.  And these atrocious bailouts and stimulus packages flowing out of Washington and the Federal Reserve [secretly, psssst hey AIG, come here in the alley i got some more money for ya] are only hurting the situation.  In the mean time Buffet is seen publicly on T.V. talking about he praises Obama for his efforts and he’s optimistic for the long term.  Was that on a Hallmark card Warren?  “Get Well Soon America” from your buddy Warren.

Bull Moves by Peter Schiff Click Here
Bull Moves by Peter Schiff Click Here

He’s lost it.  In fact if you go back and look at Berkshire Hathaway’s performance versus the dow over the past 20 years, it has underperformed. GASP!!! Not the sage of Omaha!!!  Oh brother.  Yes he’s lost it.  Hell, he got lucky in the first place.  He never “had” it.  A study was done once, some university economists [this is no joke, this is serious research here] wallpapered their class with the Wall Street Journal [yay free plug WSJ] blind folded several students, gave them darts and had them throw them.  They picked the stocks they landed on and invested.  [don’t try this at home kids, these guys have PhDs]  Every single student’s stocks out performed the DOW.  GASP!!! [and i would have gotten away with it if it weren’t for you meddling kids]  Apparently they did this study for years.  They concluded that the big performer investors are simply lucky and actually have no “magical skills” to predict good stocks.  [ha what do those snotty nosed professors of economics know]

So Warren [we’re on a first name basis] says he’s optimistic for the economy and Obama’s the bee’s knees.  Wellllllllll Peter Schiff, Ron Paul, Lou

Crash Proof by Peter Schiff Click Here
Crash Proof by Peter Schiff Click Here

Rockwell, Judge Napolitano, Glen Beck [I had to mention him so people who Google his name read this blog teehee], all say the exact opposite.  And, I agree with them [but who listens to me *sigh* I need a hug].  Can vultures pick up the pieces Warren Buffet leaves behind?  Sure, mull over the carcasses of the straggler investors who follow him blindly.  But, be wary and trust your own learning.  Read Adam Smith.  Be an “Austrian” school of economics disciple.  These Keynesian economist are the darlings of Washington right now, since they chant spend, spend, spend.

Jim Rogers
Jim Rogers

For the rest of us, invest in gold.  Buy dividend paying stocks OVERSEAS.  Stay away from cash and the dollar.  When this hyper-inflation hits, [oooooh boy don’t you dare argue with me there] and it will hit, all of your cash is going to go up in smoke.

How many billionaires…. were removed off the Forbes Billionaire list.

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