Debt + Debt x Debt x 45 = 0

So for a while now we have all been hearing about this whole government bailout for financial institutions.  Well, the dust has settled and the Obama administration has left its mark on history.  While no disrespect is intended, Obama sure has provided some “change.”

For starters, he changed the record for most money involved in a bill passed by the United States.  He will change the way some companies books look.  He will change the value of our dollar by freely throwing another $800 billion into our economy.  Sounds fun doesn’t it?

Recently a friend of mine put together a blog concerning the plans many politicians have with how to go about taking care of this financial crisis.  I will tell you right now, the worst way to reduce debt is by creating more of it, and at an exponential rate might I add.

One of the speculations of what will be done with all this money is the re-purchase of some bad assets, bad debts, bad securities, and liabilities.  This sounds great to the average person, however, such transactions can have very negative affects on a companies financial statements.  What is more is that these money hungry institutions are the reason why our economy is in the toilet.  That and our fun-loving consumers who think making $30,000 a year and spending $120,000 is a way of living.

My only concern with this idea of giving banks funds for bad assets as well as buying liabilities/securities that have gone bad is the balance sheet effects these transactions would have. What will most likely happen to most of these banks is a large extraordinary loss will be reported on their income statements due to the fact that their is no way in hell that the government will be willing to give them anywhere near the adjusted basis of most of those assets, which is what translates into a negative result for company’s balance sheets and income statements.

To explain what was said above, say ABC Bank has an asset on their books in which the adjusted basis (book value after depreciation) is $2 million.  Then say the government looks at this asset and says, “$500,000”, well now what happens to this $1.5 million difference?  See my point?  Let’s not forget what effects this will have on the stock market, granted, their is no logic that can explain that psycho ward, but say we were actually using logic to explain the stock market, this loss would be a bad thing.

The plus to that is with the new stimulus bill, these institutions would be allowed to transfer NOLs to all the way back to 2005.  NOL is the acronym for Net Operating Loss.  This refers to any net loss from a business for a specific year of business.  Usually, NOLs can be carried back two years and forwards 20 years, the beauty of this is you can use a loss from this year, to amend a prior year’s income, reduce it, and receive the tax benefit of a refund on the amount of your NOL.  Granted, the amount of the benefit is dependent on the tax bracket in which the company in, however, something is something.  Obama’s bill allows companies to take 2008 and 2009 losses back to 2005.

With most companies reporting in the red last year and this year, this may all turn out to be good on paper, however, all this does is further reduce government revenue and force us to rely more on debt as a means for financing our stimulus bills and really expensive inaugurations.

8+6 = 1.3 Million

Makes no sense at all right?  The math isn’t there.  Well according to California, this does make sense.   For a week now you have heard plenty on the woman in California who gave birth to eight children, EIGHT!  Octuplets is what they are called, something that to me sounds ridiculous.  I love children and enjoy hearing about birth because children are a blessing, however, the circumstances in this situation just beg the question: “WTF?”

According to the U.S. Department of Health Services, it took about $164,273 to house one baby in a hospital in California in 2006, multiply this by 8 and get the roughly $1.3 million taxpayers in California are going to have to pay to help this retarded woman out.  Somehow the responsibility falls on the state and government to provide for these children, rather than the idiotic mother who had the bright idea of having the kids in the first place.

Seriously?  This woman is just begging for attention and any reason to receive a social security check for each child.  It isn’t like there is a husband involved.  She is a single mother of 14.  Last year she had embryos implanted into her womb in order to birth these children.  When she had them implanted, she already had 6 children, and plenty of debt between student loans and the cost of having the embryos implanted, which by the way was a healthy $100,000 that the state medicare system is paying for.

What goes through a person’s mind when thinking about this decision?  How irresponsible and stupid can a person be?  I think now if you look up stupidity in the dictionary, you might find her face next to it.  It may even have a caption that says “See irresponsible.”  Does this woman not understand that her state is so far in the red that the governor is having a tough time trying to fit $42 billion into the already dying budget?  Nevertheless,  she still feels the government will take care of her.  How much BS is that?

See this has to be a huge joke.  Sometimes you see a stupid person and wonder to yourself, “Wow how dumb are you?  Can anyone else get dumber than this?”  Well my friend, God has your answer.  Behold, the SINGLE woman with six children who has just irresponsibly decided to give birth to eight new children, which she plans on supporting with her minimum of $150,000 of debt, $100,000 of which was created by the birth of the eight.  

The problem with the magnitude of stupidity here is that now the next example of stupidity will be worse.  Granted, I don’t think it can get worse than this, however, I wouldn’t put it past this world to produce a level of blatant stupidity that makes this woman look like Einstein.

To me it is disgusting.  I am no advocate for China-like government policy where you are limited to the number of children you can have, however, people should practice some common sense when deciding on how many children to have.  If you make $30,000 a year, I don’t think 14 children is the answer.  The clinic she went to should screen people before implanting children into the wombs of idiotic people.  

I hope for the children’s sake the state takes them and gives them to families who can’t give birth to children, however, have the financial and mental stability to care for a child.  Knowing this woman tomorrow she may say this to herself, “So I can either buy food for my kids, or have 10 more kids, wow this is tough…”

 Don’t worry, just when you think it can’t get any worse, God has a joke for you.  By this point it has to be confirmed that God has a sense of humor, and right now, He HAS to be chuckling.