This year, I don’t see there’s a lot to be jolly about. At first, I thought President-elect Barack Obama’s choice of Saddleback Church Pastor Rick Warren, the most open-minded of evangelicals, to give the inaugural invocation was OK, even though Warren is leading the fight against gay marriage. The invocation is brief and not long remembered. (Who gave the invocation in 2004? Time’s up, close Google. It was the Reverend Kirbyjon Caldwell.) You don’t have to see eye to eye to occasionally walk hand in hand.

Then I learned that Warren won’t admit gays to his congregation. How different is that from motel owners in the South who wouldn’t rent a room to Colin Powell when he was a young military officer driving his family from one post to another?

Of even less jolliness is the lasting pain from the giant giveaway of billions to financial firms by Treasury Secretary Hank Paulson. Did I hear someone say “making a list, checking it twice?” Not Hank. He might as well have made the checks out to cash. Come to think of it he did.

The money is supposed to be used to ease the credit crisis, not saved to buy weaker banks, or pay dividends and bonuses. A recent report by the bipartisan Government Accountability Office concluded there is a “heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved.”

Sorry, Can’t Say

Bank of New York Mellon Corp. spokesman Kevin Heine told AP, “We’re choosing not to disclose that.” Wendy Walker of Comerica Inc., after refusing to share any details, said, “We’re not sharing any other details. We’re just not at this time.”

What time would be better, Ms. Walker? Never. I bet never is good for you.

Financial superstars got used to talking this way when they were lionized as American royalty. Sprawling oceanfront estates the size of hotels, private 737s outfitted like palaces weren’t marks of wretched excess but totems of swashbuckling capitalist derring-do. Charity auctions where moguls outbid each other for a 1982 Lafite Rothschild were chronicled not as one more occasion to flaunt their surplus millions but characteristic acts of pure generosity.

Moving Money

This happened even as almost no one knew what these geniuses were doing. They weren’t making anything like a railroad you could see. They were moving money from one place to another, keeping some for themselves as it changed hands.

Try to follow the trajectory of a mortgage on a house in Cleveland into a bundled credit default swap of collateralized debt. Few could, yet paydays of $30 million and bonuses of twice that were based on it. Therein lay its charm.

Just as now, no one was asking pesky questions. Regulators under President George W. Bush didn’t much regulate on the theory that bankers were truly Masters of the Universe and too rich to steal. Congress wasn’t on the case, too busy begging these same executives for alms known as campaign contributions.

Thanks to an economic meltdown, we now know the decade’s financial superstars walked off with money they didn’t earn in a scheme more sophisticated but no less damnable than a punk in a ski mask holding up a convenience store.

No Heads Rolling

You would think heads would roll, some into jail. I’m not just talking about Bernard Madoff. I’m talking about the titans of commerce.

They still walk the streets, when in truth schemes should be named after them. Ponzi just doesn’t do justice to what they pulled off.

Instead, these same folks got more money, as if bringing the greatest financial system in the world to its knees deserved a reward. It’s the ultimate in trickle-down economics: If the bankers are OK, we’ll all be OK.

Where’s the money gone? Some of it paid for a trip to England for a partridge hunt, some to retention bonuses, but we don’t really know. I’d like to hang the Treasury secretary atop the Christmas tree and pelt him with tinsel until he tells us. Oops, I forgot. He doesn’t know and wouldn’t want to pry.

Where’s the Outrage?

But why isn’t anyone screaming about giving these miscreants more money? Who’s in charge here? Surely, there is someone left with a conscience, and a pulse, in the White House, someone in Congress who can call a hearing and rough up these bankers at least as much as they did the auto industry.

Fortunately, I’ve found something even a Grinch can be jolly about: Reverend Warren’s stricture against gays in his church was removed from his Web site this week. And for 2009, the number of applicants to Teach for America jumped to 25,000 from 18,000 for 3,700 chances to serve in the poorest schools.

Part of the increase is due to studies showing how effective such teachers are. Another part is a change of heart by the smartest young people, many of whom are no longer lured by quick riches to go into investment banking to the detriment of science, medical research, academia and public service.

But after receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending the money or they simply refuse to discuss it.

“We’ve lent some of it. We’ve not lent some of it. We’ve not given any accounting of, ‘Here’s how we’re doing it,'” said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. “We have not disclosed that to the public. We’re declining to.”

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?

None of the banks provided specific answers.

“We’re not providing dollar-in, dollar-out tracking,” said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn’t know where the money was going.

“We manage our capital in its aggregate,” said Regions Financial Corp. spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Assets Relief Program, which earmarked $700 billion — about the size of the Netherlands’ economy — to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

There has been no accounting of how banks spend that money. Lawmakers summoned bank executives to Capitol Hill last month and implored them to lend the money — not to hoard it or spend it on corporate bonuses, junkets or to buy other banks. But there is no process in place to make sure that’s happening and there are no consequences for banks who don’t comply.

“It is entirely appropriate for the American people to know how their taxpayer dollars are being spent in private industry,” said Elizabeth Warren, the top congressional watchdog overseeing the financial bailout.

But, at least for now, there’s no way for taxpayers to find that out.

Many of the bailout recipients have paid big bucks for naming rights on everything from sports stadiums to soccer teams to college bowl games. Even before the economic downturn, many advertising experts pointed out that these naming deals were more about ego than economics. Even the federal government has gotten involved in sports teams. The feds sponsor several cars in the NASCAR Nextel and Nationwide series. They sponsor the National Guard, Army, Navy and Air Force cars. These sponsorships could cost 12-15 million dollars a year per car. This is all government waste people.

Here’s a quick listing of some of the more notable examples:

Citi Field– Fresh out of double dipping for more federal cash, Citigroup is poised to have the new New York Mets ball park named for them. Hmmm, considering the Mets have failed to win the last game of the season and thus get into the playoffs each of the last two years, maybe they are thinking Citi’s home runs with the Treasury will come in handy.

AIG – The front of the jersey of Manchester United is emblazoned with a large AIG, the team’s sponsor. However, considering the $150 billion U.S. taxpayers have poured into the company, perhaps “U.S. Taxpayer” would be a more appropriate moniker. Or maybe rename the team Manchester United States.

NFL – Several NFL teams are banking on the stadiums, the Carolina Panthers play at Bank of America stadium, and the Baltimore Ravens play at M&T; Bank stadium.

Slap Shot – Well, 76ers play there too, but the Philadelphia Flyers have had more recent success at Wachovia Center – more success than Wachovia Bank, which was recently purchased by Wells Fargo. The Penguins play at Mellon Arena, which was paid for by Mellon Bank before they merged with Bank of New York to form Bank of New York Mellon that tapped the financial bailout. And not to be left out, the Vancouver Canucks play at General Motors (Canada) Place.

Thus, this is not a recession that can be easily stopped by the Fed simply relaxing monetary policy, as might have occurred in the old days. (Of course, the Fed hasn’t just relaxed policy — it has moved the monetary equivalent of heaven and earth.)

I have been predicting for a few years that the bursting of the housing bubble, in combination with the unwinding of the epic credit binge, was going to lead to extreme carnage on the downside, as consumers and financial institutions would both be impaired. That is where we are today.

Now the Fed has done what it’s done and will promise to do more. At last week’s meeting of the its Open Market Committee, the Fed essentially said it might as well hold future meetings at Strategic Air Command headquarters outside Omaha, Neb., so as to be closer to the B-52s it will need to deliver money to the country posthaste.

For any doubters out there, please note the last paragraph of the committee’s communiqué: “The Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities . . . and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. . . . The committee is also evaluating the potential benefits of purchasing longer-term Treasury securities.”

In other words, the Fed went for it, corroborating the view that many of us have held for some time: that when push came to shove, the central bank would let nothing stand in the way of printing any amount of money and monetizing anything required to fend off the ill effects of the collapsing bubble.

There’s an unwritten sequel to this story: The Fed will be exceedingly slow to remove that liquidity. Thus, whenever the economy stabilizes, at whatever level, the rate of inflation seen shortly thereafter will be quite substantial, I would guess.

I’m sure the new administration will create equally gargantuan stimulus programs. But in my opinion, we’re still going to have a brutal recession, and it will be longer and deeper than most people believe.

I expect that the rally now under way in fits and starts will not last all that long into 2009 and that it will set up a rather attractive short-selling opportunity. Those who are overexposed to equities might want to think about using the strength to lighten up, if my thought process makes sense to you.

There has not been a single figure on unemployment, housing, or consumer spending that would lead economists to believe that 2009 will be better than this year. As a matter of fact, a consensus is forming that it could be much, much worse.

One of the potential weaknesses of the bailout is that it may be big enough but implementing it may take so long that it will do nothing to reverse the employment and housing problems before very late next year. Setting up and managing programs to build roads and schools will take months.

This rescue of the economy is going to be the largest federal program in history. That being the case, it would be good if it could be given every opportunity to work.

The only way to create or save jobs quickly is to give incentives to businesses which are already in operation. Creating institutions to hire people may be noble, but it is painfully slow. The $1 trillion needs to be put to work in as few months as possible.

The best way to create jobs is to give employers huge incentives to hire people. One alternative would be for the government to pay a percentage of the first year salaries of any new employee a company brings on board. All the firms would have to do is prove employment though tax withholding documents. The government might offer to pay 50% of salaries up to a total of $50,000. That means the benefits would help a range of people from the very poor up to the higher end of the middle class. Each of the new jobs creates a new taxpayer. That at least cycles some income back to the federal government.

This relates to the upcoming wave of Foreclosures in 2009 that are due to the resetting of the “Toxic” mortgages.

Many fail to realize that there are millions of self-employed smaller businesses, who employ from 1-10 employees that are holding these risky mortgages. So, here we have a major problem… Not only will these small business owners lose their homes, but there will be the resulting JOB LOSSES on their business failure. Note, although President-Elect Obama is stressing the need to create 3 million new jobs, we must understand that “JOB RETENTION IS AS IMPORTANT AS JOB CREATION”.

Our priority should be to be PROACTIVE in addressing these small business owners’ need to avoid defaulting on their mortgages. They require “Immediate and Specific Financial Guidance” to weather this storm.

The 2nd Wave of Foreclosures has made it to the mainstream Media. CBS’s 60 Minutes had a segment on 12/14/08, but they missed a very important point. Here is a post which may have merit for your blog…….

I would like to bring a very important bit of information to your attention that relates to this economic crisis that was overlooked until now.

On Sunday, 12/14/08, CBS 60 Minutes aired a segment “The Mortgage Meltdown”.

Scott Pelley’s piece on the 2nd Wave of Foreclosures overlooked a critical fact.

The segment missed the fact that this next wave of Foreclosures in 2009 will Take Self-Employed and Smaller Businesses who have these TOXIC mortgages. In fact, ALT-A, Option ARMS, Interest-Only, the TOXIC Mortgages that are considered the “Troubled” assets in TARP were specifically marketed to the self-employed who fell prey to them.

The upcoming defaults on these risky “Toxic Mortgages” will result in an increase in foreclosures. But worse, once these small businesses fail, the resulting loss of jobs will cause millions to add to the ranks of the unemployed. Note that self-employed business owners (16.2 million according to the SBA) employ between 1-10 employees.

An NASE survey at http://www.nase.org, was the first to provide compelling evidence of small business involvement in the upcoming toxic mortgage crisis. The survey was created by Prof. Samuel D. Bornstein and Jung I. Song, CPA of BornsteinSong Consultants in Oakhurst, NJ, and was conducted by the National Association for the Self-Employed (NASE) which issued a Press Release on November 21, 2008.

According to this survey, it is estimated that 3,709,800 small business owners hold Alt-A and other toxic mortgages, and 1,279,800 are already delinquent as they have missed one to three or more monthly mortgage payments at mid-November, before the expected Resets that are scheduled to begin in 4th Quarter 2008 through 2012.

These small business owners will be at-risk of payment shock and default as their monthly mortgage payments skyrocket. Small business owners were especially targeted for these Alt-A loans which required little or no documentation of income which appealed to many small business owners who previously were unable to qualify.