Value Drain™ II - The 14 Trillion Dollar Looting of America
in the name of Capitalism, Meritocracy (aka Greed), and Free Markets
The
Value
Drain™ framework applied below is adopted from the classic Value
Chain
analysis for businesses. In a value chain, each segment of the chain
adds some value, so that the customer enjoys a margin; i.e., Value Chain Margin = Value Delivered to
Customers - Value Created by the Business. Similarly, the $8.7
trillion dollars (As of May 3rd, 2009) Value
Drain™ chart below is self-explanatory:
The
above
$8.7 trillion dollars that the Wall Street Banks and other
Financial Institutions have been able to successfully extract as of this
writing (May 3, 2009) are as follows:
$8.7 trillion Value Drain(tm) = $4.8 trillion Federal Reserve Asset Buying Program + $1.9 trillion in Loans like TALF promised by the Federal Reserve + $700 billion Paulson Bailout + $300 billion (from the $787 billion Obama Stimulus) + $1 trillion estimated from Treasury's pPiP program
If you add $5 trillion from the deflated markets (currently in disequilibrium, will reach equilibrium once the Dow Jones is up another 20% from where it stands today at the time of this writing - May 3rd, 2009), you arrive at the figure of $14 trillion. To read the complete article, please click here...June 21 Update: We are now projecting that the total value drain is much more than the US G.D.P. If you add the 6 trillion dollars lost in home value to the 14 trillion dollars, you arrive at the figure of 20 trillion dollars looted by the toxy-morons. We will delve deeper into this, for the housing crisis actually brought this financial meltdown, in the third of our Value Drain series of articles.
THE CURRENT LOOTING OF THE AMERICANS TO THE TUNE OF 20 TRILLION DOLLARS, WHICH WE CALL THE 20 TRILLION DOLLAR VALUE DRAIN, HAD ITS GENESIS IN THE $700 BILLION (OR THE $785 BILLION) DOLLAR BAILOUT PROPOSED BY THE BUSH ADMINISTRATION, AND PASSED BY THE CONGRESS. TAKE THE POLL BELOW AND LET US KNOW WHAT YOU THINK?
PODCAST: Sam Mishra expands his Value Drain Analysis framework by touching upon the following:
* Recaps how the Value Drain Analysis is similar to the Value Chain Analysis businesses use, and the genesis of the 787 billion dollar bailout / Value Drain
* Explains why the $500,000 executive compensation cap will not work (Since the banks will re-price the stock options for their executives, if required)
* Touches upon how the fat-cats in other industries (like the Auto industry) are enjoying billions in bailout stimulus, after having enjoyed hundreds of millions of dollars in compensation in other industries
* Why even though President Obama means well, it will be difficult for him to pull America out of this financial disaster (since ex-bankers are now in charge of auditing these banks)
* How corruption still plauges our Political Economy
Listen >>
(9/22/2008) Coughing up the cash for the
800 billion dollar VALUE DRAIN
Socializing the
proposed eight hundred billion dollar bailout is not a good idea. If
Lehman went bankrupt, it is the fault of the management --- for it made
fat brokerage fees while selling bonds derived from pooled mortgages,
and its bankers got thousands of dollars each in cash bonus. Same
with Bear Stearns and Merrill Lynch. Executives and bankers from these
and other financial institutions involved with Mortgage backed
securities should be bearing the bulk of these bailouts in taxes, and
not the rank and file American. The proposed bailout will drain at
least $10,000 from each American household. This is nothing but a value
drain to the
tune of 800 billion dollars, so who should cough up how much cash should
be a matter of vigorous debate.
Read
more …(2/20/2008) McCain Campaign SWOT - Strengths, Weaknesses, Opportunities, Threats
This introductory SWOT analysis of the McCain campaign serves the dual purpose of illustrating how a SWOT framework can be used for competitive analysis purposes. The SWOT illustrated in this article is that of the McCain campaign, as an Obama campaign strategist would frame it… For example, if Hillary was the Democratic nominee, it would be an opportunity for McCain. On the other hand, if Obama emerged as the victor in the Democratic primaries, he would pose a threat to McCain in the upcoming presidential elections in November... Read more...
(3/15/2007) California foreclosures are up 300% ... Is the SFO Bay Area housing-market primed / sub-primed for a meltdown?
California foreclosures are up 300% year over year for January 2007. Recently, RealtyTrack data showed that with 142, 429 foreclosures in 2006, California suffered a year over year increase of 131% compared to the number of foreclosures in 2005... Read more …
(2/8/2007 - Real Estate) Here comes the Spring-Selling Season… Should you buy that dream first home in 2007?
People don't like to move in winter. But spring is a different matter.
Change is in the air. People change apartments, and the more fortunate
amongst us buy our first dream home. Should you buy that home this
spring? Or should you wait?
Read more …
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