POOR RICHARDS REPORT
Chapter 15
Ringing the Bell or Trumpets are Blowing
Or How to Survive to Coming Panic
The Federal Reserve Act of 1913 is probably the most important law of the 21st century. We must follow the guidelines that were followed by the members of Congress who voted for this to be law.
The reforms that I suggest will send the market into a temporary tailspin, but if they are followed completely only the speculators will crash.
For openers, the banks who have been hording all the QE distributions must now share them with their depositors and give a greater portion to the younger depositors because they need it the most. They will also spend their portion, which will kick start the economy.
Next, the Congress should form a standing committee of 16 members to review all the reforms to our financial system. The members should be equally divided from each party and have the highest respect among their peers. Seniority or power should not be considered. Ethics should be of the highest order.
Finally they should have a unanimous vote before it comes before the entire house. This was a stipulation when the committees met for the Federal Reserve Act of 1913. It took them 6 months. The Congress voted December 22, 1913: 298 yeas and 60 no’s and 76 not voting. On December 23, 1913 in the morning vote, there were 43 yeas and 25 no’s with 27 no votes. (Back then there were only 95 senators).
That afternoon President Woodrow Wilson signed the act into law.
1. The Federal Reserve shall raise All Margin rates to 100% for a period of 6 months to a year.
2. The Security Exchange Commission (SEC) shall ban all corporate share buybacks. (All this does is increasing the earnings per share and enables the officers to receive a higher price for their options).
Instead, the monies should be distributed to the shareholders so all can share the wealth – not a privileged few.
This should create new buyers that should offset the sellers.
3. “Banks” should start returning the QE funds they have been hording over the past few years to their depositors. This should be done with the younger ones with families receiving a greater portion. Then staggered depending upon one’s earning power. The higher the earning power the less money received. This should increase the velocity or turnover of money. Some corporations will fail while others will prosper due to some changes in buying patterns.
4. Ban High Frequency Trades (HFT’s) entirely. They break all the rules for fair play and only benefit the owners. The public be damned; damn them.
5. Derivative trades are set up for fees and is a form of gambling. Most derivative trades are hard to follow and most financial disappoints (a nice word) evolve some forms of derivatives. The best way out of this mess is to just let them mature.
6. Trash the Dodd- Frank ACT and make the new one simple to understand.
7. Trash the Investment Company Act of 1940. It covers mutual funds. Exchange Traded Funds (ETF’s) have quietly been replacing mutual funds. With computers and their size most of these laws are anachronisms.
8. Clean up the ads. Most ads today give the hint of casino gambling. Insert a clause for risk.
9. Go back to the fraction system for stocks. This will allow the market maker to support his market during normal times and also kill off HFT’s and stop firms offering the first “free” trades.
10. Reinstate the Short Sell Rule. This is very important because it will stop gambling and stop computer hacking in the market place.
To do a legitimate Short sale one must first get permission from the back office of the firm one is doing business with. (They have the security to deliver to a buyer when you sell short). Then one must wait for an uptick in the price of the stock before the sale can take place. The order is also marked “Short Sale”.
Today I believe short sales are made willy nilly and no uptick is involved. I also believe that after a sale is done they look for stock to deliver.
These reforms that I have listed so far will cause all hell to break loose among the heels of the business. They will be the losers while the public will gain confidence in the system and regain some of their tax dollars.
Investors will be able to make intelligent decisions based upon facts and knowledge instead of charts and soothsayers and false prophets.
Category: America
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Poor Richards Report Chapter 15
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The Ottoman Empire’s First Map of the Newly Minted United States, Nick Danforth
What did the United States look like to Ottoman observers in 1803? In this map, the newly independent U.S. is labeled “The Country of the English People” (“İngliz Cumhurunun Ülkesi”). The Iroquois Confederacy shows up as well, labeled the “Government of the Six Indian Nations.” Other tribes shown on the map include the Algonquin, Chippewa, Western Sioux (Siyu-yu Garbî), Eastern Sioux (Siyu-yu Şarkî), Black Pawnees (Kara Panis), and White Pawnees (Ak Panis).
The Ottoman Empire, which at the time this map was drawn included much of the Balkans and the Middle East, used a version of the Turkish language written in a slightly modified Arabic script. Ottoman script works particularly well on maps, because it allows cartographers to label wide regions by elongating the lines connecting individual letters.
This appears to be the first Ottoman map of the United States, but Ottoman maps of North America have a much longer history. The first were the 16th-century nautical charts of the famous Ottoman cartographer Piri Reis. Some of the last, drawn before the new Turkish Republic switched to Latin script in 1928, show air routes spanning the continental U.S.
American relations with the Ottoman Empire in the 19th century were either commercial or missionary. American missionaries to the empire first tried to win Christian converts. But after meeting with little success, they turned to creating schools to spread the much more popular American gospel of English fluency and engineering excellence.
At times, the mercantile and missionary impulses came into conflict, such as when Greek Christians rebelled against the Ottoman sultan. Many Americans felt their government had a moral duty to stand with co-religionists against a Muslim despot. The U.S. government, however, felt a more pressing duty to stand with its merchants and sea captains, who’d been doing brisk business with the sultan. Supposedly, it was in recognition of U.S. support of the establishment that the empire later sided with the Union during America’s own civil war.
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Turkey Offers Military Bases to U.S.-Led Coalition
By David LermanOct 13, 2014 8:18 PM GMT+0300
A Turkish army tank holds a position on a hilltop, with the Syrian town of Kobani in… Read More
The U.S. said Turkey agreed to help train Syrian rebels and allow use of its military bases as part of the campaign against Islamic State, as Turkish officials cast doubt on the extent of the accord.
U.S. National Security Adviser Susan Rice said yesterday that Turkey has made a “new commitment” in the fight against the jihadist group. Her comments followed U.S. efforts to persuade Turkey to play a bigger role in the fight against Islamic State, which has declared a caliphate in parts of Syria and Iraq and is gaining territory along the Turkish border.
It wasn’t immediately clear which bases would be involved. There’s no agreement to use Incirlik in southeast Turkey, a base for past U.S. operations, Turkey’s Foreign Minister Mevlut Cavusoglu said. Turkey agreed to train and equip moderate Syrian rebels, while details such as where training will take place yet to be clarified, he told state television today. U.S. military officials are due in Turkey this week for further talks.
While Turkey has previously pledged to join the campaign, it hadn’t said what it would be willing to contribute militarily. The NATO member had ruled out sending ground troops into Syria unless the U.S. broadened the campaign to target the regime of Syrian President Bashar al-Assad.
‘New Commitment’
Al-Qaeda’s Heirs
Turkey is now willing to join Saudi Arabia in offering territory to be used to train moderate rebels who could fight Islamic State on the ground in Syria, Rice said on NBC’s “Meet the Press” program. “That is a new commitment,” she said.
The Obama administration, while saying Assad must go, has stopped short of taking any military action against his regime and has limited its airstrikes to Islamic State targets. The U.S. has ruled out sending its own troops into combat on the ground in Syria and Iraq.
Rice also said Turkish “facilities” could be used by “the coalition forces — American and otherwise — to engage in activities inside of Iraq and Syria.” She didn’t name any specific bases.
Such a move would give U.S. aircraft close access to targets in neighboring Syria, such as the Kurdish town of Kobani, where Islamic State is making gains.
“That’s a new commitment and one that we very much welcome,” Rice said.
Islamic State may capture Kobani within days if the U.S.- led coalition doesn’t step up airstrikes to help, Faysal Sariyildiz, a lawmaker in the Turkish parliament, said in an interview at the border with Syria yesterday.
Not Essential
The Pentagon, taking into consideration political sensitivities of Arab allies, hasn’t disclosed which air bases it uses in the region to conduct strikes in Syria and Iraq.
Defense Secretary Chuck Hagel has said U.S. military officials will be in Turkey this week to review the plan for training and equipping Syrian rebels.
The Obama administration is under pressure from domestic critics to take more aggressive military action as the airstrikes do little to keep Islamic State from seizing new territory.
While Turkey has pressed the U.S. to establish a “buffer zone” and no-fly zone in Syria, Rice said there are no plans to do so. “We don’t see it at this point as essential to the goal of degrading and ultimately destroying” Islamic State, she said.
General Martin Dempsey, chairman of the Joint Chiefs of Staff, will host more than 20 defense ministers from coalition countries tomorrow at Joint Base Andrews outside of Washington to discuss the campaign against Islamic State. President Barack Obama is scheduled to stop by the meeting.
To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net
To contact the editors responsible for this story: Vince Golle at vgolle@bloomberg.net; John Walcott at jwalcott9@bloomberg.net; Maura Reynolds at mreynolds34@bloomberg.
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Turkey Is Courted by U.S. to Help Fight ISIS
ANKARA, Turkey — The Obama administration on Monday began the work of trying to determine exactly what roles the members of its fledgling coalition of countries to fight the Islamic State in Iraq and Syria will play, with Defense Secretary Chuck Hagel huddled with the leaders of the one country the administration has called “absolutely indispensable” to the fight: Turkey.
But after hours of meetings here, there were no announcements of what the government of President Recep Tayyip Erdogan might do. In fact, Turkish officials meeting with Mr. Hagel eschewed the news conferences that usually accompany high-level visits from American officials.
Rather, Turkey’s foreign minister, Mevlut Cavusoglu, warned on the state-run Anatolia news agency that weapons sent by Western countries to fight ISIS could end up in the hands of the Kurdistan Workers’ Party, or P.K.K., which Ankara considers a terrorist group.
“We have expressed our concerns,” Mr. Cavusoglu said. “It may not be possible to control where these weapons will go.”
Turkish officials raised concern about a host of issues surrounding the coalition, including the safety of 49 Turkish diplomats who have been taken hostage by ISIS, and whether the growing international effort to arm Kurdish fighters in Iraq against ISIS could embolden Kurdish militants in Turkey who have been seeking autonomy for the country’s largely Kurdish southeast. Turkish Kurds with the P.K.K. have fought with Kurdish pesh merga fighters in northern Iraq against ISIS. Turkey is also grappling with an influx of more than 800,000 Syrian refugees — the largest Syrian refugee population after Lebanon’s.
Speaking to reporters after meeting with Mr. Erdogan on Monday, Mr. Hagel said that Turkish officials had expressed to him their concern about the P.K.K. But, he added, “They didn’t indicate to me in any way that they saw the P.K.K. as a more significant threat than ISIL,” using an alternative acronym for ISIS.
The Obama administration wants Turkey to crack down on the flow of foreign fighters who have used the country as a transit point to Syria to join militant groups fighting there. The United States also wants to be able to use Turkish military bases to begin operations, including airstrikes, on ISIS targets in Iraq and Syria if President Obamadecides to attack inside Syria.
“By geography, Turkey is going to be absolutely indispensable to the ongoing fight against ISIS,” a senior defense official said, speaking on condition of anonymity. “Because of just where they sit, the access we currently already have militarily and the cooperation we have militarily.”
Mr. Erdogan, at the NATO summit meeting in Wales last week, met with Mr. Obama and said Turkey would become the only majority Muslim country so far to join what Mr. Hagel termed a “core coalition” of 10 countries fighting ISIS. Mr. Obama said after the meeting that he would welcome Turkey’s participation in his coalition.
But Turkey has several times balked at allowing the American military to use its bases for operations in the region — most famously in Iraq in 2003. Mr. Erdogan himself has a complicated relationship with Mr. Obama. The two initially formed a close personal relationship during Mr. Obama’s first term, and Turkey was the first majority Muslim country that the American president visited after taking office.
But the relationship soured over differences on Egypt and Syria, and deteriorated even more when Mr. Erdogan suggested that a conspiracy involving the United States was behind a corruption investigation by Turkish prosecutors that targeted him and his inner circle.
Mr. Hagel said the tensions between the United States and Turkey should not get in the way of joining in the fight against ISIS. “Yes, we’ve had our ups and downs in the relationship, but what’s interesting is it has never broken,” Mr. Hagel said.
“Now,” he added, “we have a situation in the world today that presents a clear and new set of very real threats.” Mr. Hagel said the United States expected that Turkey “will be involved in all of our efforts, as articulated by the president, to build a coalition to deal with ISIL.”