Rob Cheng’s Blog

It has been over 6 months, since George Bush went in front of the entire nation and told us all that we are all screwed. He succeeded in putting the nation into a panic setting the stage for an unprecedented flurry of government spending. After 1/2 a year of spending, none of the stimulus has had any impact whatsoever. Employment continues to rise, housing prices plummet, and GDP is still shrinking.

The underlying theory behind the “shop til you drop” stimulus plan is Keynesian economics which became popular during the last depression. Unfortunately, Keynesian economics will nor work this time. The primary reason is that the United States is broke. In the last 50 years, our great country has been transformed from the largest creditor nation to the largest debtor nation. We are broke, and we are addicted to spending more money than we have. Addicted is the only appropriate word, and like an addict, there is only one solution. We must wean ourselves from the addiction, rather than borrow more money. Obama and Bush have been feeding the addiction. More »

March 18th, 2009 | Category: Financial Crisis, Politics | Leave a comment

One of the greatest travesties to this bubble is the incredible American deficit under the Bush administration. The deficit has ballooned by over $5T in a scant 8 years. We can all agree that this is highly fiscally irresponsible, but the question remains, “Where did all this money go?”

After all, Bush is a Republican, and the funds certainly were not spent on liberal causes such as welfare and education. Given the record price at the gas pump, the funds were not spent on alternative energies, or more energy efficient cars. In fact, I think that we can look back at the success of the Humvee as a unique product of the Bush administration. More »

November 3rd, 2008 | Category: Financial Crisis, Politics | Leave a comment

The media is calling this bubble the worst since the Great Depression. That sure sounds scary, but where are the facts? What makes them believe this bubble is so severe relative to other bubbles? Are there any facts to feed the panic or just pure fear?

I decided to take a look at some of the facts to measure the bubble and finally set some expectations about the size of the bubble. First I looked at the average housing pricing for the last 45 years. I pulled all of the information from www.census.gov which is a terrific place to gather macro economic information. More »

October 27th, 2008 | Category: Financial Crisis, Politics | Comments (1)

Yesterday, the House of Representatives approved the $700B bailout plan, and President Bush quickly signed it into law. Sigh! What I dislike most about this bill was that everyone including the President was acting in a panic. No one was calmly analyzing the underlying magnitude of the credit crisis, and the fundamentals that would drive our great country so close to the edge of a cliff. I’ll try to do that here.

The first chart is a simple graph of the trend of our national debt. Bush inherited a $5.7T debt, and by the end of his presidency, it will most likely exceed $11T. In a short eight years, Bush and the Republicans have doubled the size of the deficit. Let’s put this another way. Bush created a deficit in eiqht years equal to all 42 presidents before him COMBINED. There are only two ways to create a disaster of this magnitude. More »

October 6th, 2008 | Category: Financial Crisis, Politics | Comments (1)

I am shocked at what is happening to our country right now. It is like an incredibly bad dream. I put together the following two charts (see below). The first chart is the history of the Dow Jones Industrial Average for the last 18 years. I drew a line (just a guess) of the normal sustainable rate of growth of the American economy. Independent on where you draw the line, it is easy to see 2 bubbles in the last 18 years. The first one is commonly referred to as the internet bubble or the dot com bust. And the second is the mess that we are experiencing. When looking at the magnitudes of the bubbles, they are similar in size. It is true that the DJ is not a surrogate for the market as a whole, but certainly if there is excess liquidity driving the mortgage market, then the DJ would at least have a residual bubble from the liquidity. More »

September 30th, 2008 | Category: Financial Crisis, Politics | Comments (8)

I just finished watching the first presidential debate, and one of the first questions was what are some of the lessons that can be learned from the war in Iraq. This should have been a softball question for Obama because in order to learn we have to admit our mistakes. McCain response was clear that he was not going to admit any mistakes. In fact, he just reveled in the wisdom of the surge. Worse yet, Obama did not seize the opportunity, basically said we should leave Iraq and shift to Afghanistan.

DAMNIT! Neither candidate can learn from the war in Iraq? That’s a scary thought. The reality is that there are numerous lessons to be learned, and it pains me to think of the state of our country that I, a humble citizen, needs to write these lessons for posterity. More »

September 27th, 2008 | Category: Politics | Leave a comment

Please find my campaign donation for $2300. I wish there was a way that I could legally donate more money, because I would do it in a heart beat.

First, a little bit about myself. I am 49 years old, married with one infant, and another one the way. I have been successful my entire adult life in both academics (Cornell and University of Texas) and business. I rose to the top ranks of Gateway Computer, and currently, I reside in Rio de Janeiro, Brazil where I operate a small, successful and rapidly growing American software company, PC Pitstop. More »

September 19th, 2008 | Category: Politics | Comments (5)

Only recently have I come to the conclusion that I was an alcoholic. When I worked at Gateway, I drank a minimum of 5 beers every night. Then on the weekend, I would let loose, and get really pounded. I estimate that I was drinking about 50 beers a week. I was a totally functional alcoholic. I was at work every day at 8 o’clock sharp, and I worked late most nights, plus weekends. The alcoholism had little to no effect on my job at all. The only exception was that I would talk too much when I was drunk, and to this day, I still regret some of the stupid things I said while I was drunk. But that is minor. I think we all regret stupid things we say. More »

June 29th, 2008 | Category: Health, Politics | Comments (1)

I guess I am the last to know that my good friend, Earle Grueskin, is running for President of the United States in a grass roots campaign. After the grueling, Democratic primary, I am actually thinking of voting for Earle for President.

I really think that he would make a fine president. Heck, he was the mayor of Sioux City, and ran facilities worldwide for Gateway. That makes him more qualified than either John McCain or Barack Obama in my view. Here’s the news reel below. More »

June 22nd, 2008 | Category: Politics | Comments (1)