Scott's Blog

Bizarro World Comes To Tallahassee Over Rail

The only thing elected officials like more than an open bar is free money... And free money is on the way if we can find a way to get the Feds to choose Florida for $2.8 billion in stimulus money to build a bullet train. 

That's the reason given for this week's special session of the Florida Legislature. For the cynics in the crowd - there appears to be more at work... 

So why the cynicism? Well - for one - giving CSX, the railroad operator, a $432 million dollar handout has once again been put on the table.   If this sounds somewhat familiar, but you can't remember the details - let me refresh your memory. 

The legislature has attempted on a number of prior occasions to "purchase" 61 miles of track from CSX in order to use it for Orlando's planned "Sun Rail" commuter train system. 

Fair enough, right? 

Sure - it would be a fair deal if that were the whole story.  The rest of the story involves the details of the purchase...

For one, the deal would allow CSX to continue to use the track even after the taxpayers paid the $432 million purchase price. 

But that's nothing compared to this whopper -- 

As originally proposed, the deal would allow CSX to avoid all liability in connection with their free use of the tracks we purchased for $432 million. In other words, if one of their trains wipes out a commuter train - the taxpayers would be forced to pick up the tab for 100% costs related to the crash by CSX.     

Legislators are looking for ways to dress up this deal and get it through the Florida Senate during this week's special session.  But as the old saying goes - you can't always make a silk purse out of a sow's ear...

The joke? The CSX deal is not required to get the $2.8 Billion in federal stimulus funds for the bullet train between Orlando and Tampa Bay. 

So why is this week's legislative session any more bizarre than usual?

Namely for the political bedfellows it has created.  The unions are now allied with many of the so-called "tea bag" groups in North and Central Florida trying to kill the bill. (More on the South Florida Tea Baggers later)

On the other side, Governor Crist is once again in favor of federal stimulus money coming to the Sunshine State (Remember he was for federal stimulus dollars before he was against it)

Joining the Governor in support of the rail bill are many of the same Republican legislators who spent millions a few years back to kill an identical bullet train project. 

To make matters even crazier - the South Florida Tea Bag contingent is FOR the stimulus money - because they need they need to money to keep Miami's Tri-Rail Commuter line running. 

Are you thoroughly confused now?  So am I...

Stay tuned...

Until We Meet Again - Dare To Be Great!
Wall Street One Year Later - Same As It Ever Was

This past weekend marked the one year anniversary of what one Wall Street Journal writer dubbed "The Weekend Wall Street Died" 

That weekend Lehman Brothers was told by the Feds that a financial lifeline was unavailable and that it would have to declare bankruptcy (Merrill Lynch was also forced into the arms Bank of America that weekend)

Lehman's bankruptcy spelled the end of the 158 year old firm.  More importantly -- it kicked off the precipitous slide of the value of Wall Street firms - culminating in a number of large financial institutions biting the dust, including Wachovia, Washington Mutual and Countrywide.  

The big question one year later... Has Wall Street changed it stripes? Has the mortgage securities' disaster taught them to be more prudent investing your hard-earned retirement dollars?

Not hardly...  Today Wall Street Firms are busy building the next bubble...

No, not plastics or ball bearings... It's Life Insurance

The Life Insurance security is the new mortgage security.

So what do the banks need to pull this off? 

Just Sick and old life insurance policy holders... 

Sick and old life insurance policy holders who want access to money before they die -- sell their policies to the banks for a discounted price.  It's a vast market, with over $25 Billion dollars in life insurance on the books.

Here's how it works -- Let's say a policy holder with a $1 million dollar death benefit is terminally ill and would like access to money while they are alive.   The bank would pay the sick policy holder $400,000 dollars for ownership of the $1 million policy.  When the policy holder dies - the bank would receive $1,000,000, which would result in a profit of $600,000 to the bank.  ($1,000,000 minus the $400k paid to sick policy holder).

Is there any risk to the bank?  Of course, if the policy holder some how lives longer than anticipated -- the policy may be worthless to the bank who purchased the policy.

But remember - the banks specialize in making money off other people's risk -- (think risky mortgage bonds sold by the banks to your retirement and mutual funds)

The banks are now taking the life insurance policies they have purchased from sick and old policy holders and bundling them into life insurance bonds... The bonds are then sold to your retirement and mutual funds.  The banks make millions in fees putting together these life insurance bonds.  They also eliminate their risk when they sell the bonds to the retirement and mutual funds happy to gobble them up.  

So who ultimately will suffer if these latest bonds go bust?

You, me and all the rest of the folks who are invested in the retirement and mutual funds that purchased the life insurance bonds.. 

Shocked... You shouldn't be...

The more things change - the more they stay the same...

Obama Rolls Back Healthcare Doomsday Clock

President Obama's speech last night (in front of 535 gov't employees who participate in a government run healthcare plan) was not designed to create bi-partisan support in the Halls of Congress.  That horse left the stable the day he took office. 

No, last night the President attempted to set the record straight with the American people on what the reform package WON'T DO. (i.e., Palin Death Panel Jibberish).  If Healthcare reform was a patient - Obama's speech last night was the equivalent of injecting a dying patient with adrenaline.

Will the patient survive?  It's anybody's guess.  That's not up to Obama.  It's not up to Nancy Pelosi.  It is up to a little known Democratic Senator from Montana - Senator Max Baucus from Montana.  Baucus is the chairman of the powerful Senate Finance Committee.  Baucus has taken it upon himself to draft the healthcare reform bill.  The bill is scheduled to be rolled out next week.

So what will reform look like?  That's unclear.  But what is clear is that Obama doesn't intend to suffer the all out defeat on the healthcare front that Bill Clinton did in the early '90's.

Some form of healthcare reform will pass.  At a minimum - a reform bill that eliminates the pre-existing condition exclusion for individual health policies would be a victory for Americans.

The patient is still breathing - but just barely...


Gov. Crist Should Pick Famous Floridian

Let's face it - the next interim United States Senator from the Sunshine State will have about as much influence on Washington as Paula Abdul does on the future of music. He or she will serve barely a year and will be in the minority party.

Governor Crist didn't want this task -  Picking any of the likely political suspects will end up annoying some Republican constituency.The solution - Governor Crist should appoint a high profile Floridian will no political ambition.

He are some suggestions:

1. The members of Lynyrd Skynyrd - on the condition they re-write the lyrics to "Sweet Home Alabama"  as "Sweet Home Florida." And yes, the Constitution explicitly allows bands to serve in the Senate. 

2. Tim Tebow - ready to carry the Senate over the goal line on Healthcare reform.

3. Burt Reynolds -  this would prevent him making a sequel to "Cop in a Half."

4. Jimmy Buffett - Happy Hour would never be the same in the Dirksen Building.

 5. Shaq O'Neill - he's always looking for a new challenge - he would be the tallest Senator in the history of the Republic, not to mention the worst foul shooter to ever grace the Capitol Rotunda.

6. Hulk Hogan - fresh from his divorce, Hulk is ready to for another comeback - plus he is a former Presidential Candidate - (see WCW video archives - circa 1999).

Gloria Estefan - would allow Congress to begin balancing Federal budget by having her play the holiday party.

Come on Governor Crist - have some fun!

Moon Landing Naysayers Go Away

Let's take this 40th Anniversary of the Apollo 11 Moon Landing to once and for all -- agree that -- yes -- the Moon Landing did happen. No, it wasn't staged in a backlot at Universal.

A couple years ago Buzz Aldrin, the second man to walk on the moon, was accosted by one of these the "Moon Landing was Faked" nuts in route to lunch with his granddaughter in Beverly Hills.

After being called a coward, a thief, and a liar by this lowlife - Aldrin finally had enough -- he reared back and gave the guy a straight right to forehead. (you can see Aldrin's straight right in the Farrell Files Video).

To their credit, the Beverly Hills Police declined to arrest Aldrin and the Beverly Hills Prosecutors declined to file charges.

Buzz Aldrin and all the astronauts who have come before and after him are national heroes who risked their lives to further science and the American Spirit.

They should be revered and treated with dignity - not with contempt...

Until we meet again - Dare To Be Great.

 watch the Video Farrell Files for July 20 -- on this link

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