Well, yes but you are the first second. Me I’m the second second – hopefully

My fiancee just coined a name for this hypothesis: Corporate terror…. no way to escape it

John Thain’s Top Ten Greatest Momentsare right here! (with explanations)1. The Great Redecoration2. The Unfortunate Chair Incident3. Just Can’t Quit Those Mortgage Assets4. The Bonus Fiasco…

Sorry, that URL rotted and I lost the link to the original article. Here are a few paragraphs that I saved:Greenbrier is the first car manufacturer to shed light on the toughmarket from last fall, and since it is the second-largest in the sectorits performance could be a sign of what’s to come from the others…. manufacturers across North America probably built and delivered58,800 railcars of all types during 2008, but he expects the 2009 levelto be “just shy of 30,000 . . . basically a 50 percent drop.”And Starks sees things getting worse still as this year continues.”We’re not expecting things to really pick up until second-half 2010,”he said.In fact, he said the four quarters beginning at mid-2009 could see carbuilds fall to an annualized pace of just 11,000 units. “That’s kind ofa worst-case scenario,” he said, “but the fundamentals are really there”to reach that pace….Keeping those orders, and even keeping their value, could putmanufacturers to the test this year. Starks said railcar value tends tofollow demand for the underlying freight. “If there’s not enough demandfor that cargo then the value of that car type goes down,” he said, sothe big yearend collapse in rail traffic makes it harder to set car values.Another problem is that car owners – equipment leasing firms, shippersand railroads – have all been laying up more equipment as demandshrivels, storing cars for when demand returns but further weighing downnew orders.Starks said the average number of railcars out of active service acrossthe United States, Canada and Mexico was an unusually low 60,000 in2006. Now, FTR estimates more than 415,000 railcars are idled from NorthAmerican fleets, including tank cars bought when ethanol business wasbooming, boxcars, intermodal well cars and flatbeds.

I agree with ptm. No conspiracy here. At least on the reactive side of it.However devoid of any limbic system (responsible for emotion, behavior, long term memory, and olfaction), corporations possess a well developed and evolved brain stem (necessary for survival and for arousal). It is this later that warrants the similar survivalist reactions of corporations faced with a threatening environment.

“A coherent plan…”@ RoubiniIndeed, what is needed is a ” coherent plan”, a long term plan (say over ~100 years), a vision, with a target and of course, some “leadership” with integrity for a dedication to its execution through adaptive adjustments due to circumstantial change. Even, just a “plan” would do it, where obviously, some public consent to such a “plan” would be desirable.Mr Benanke’s “plan” (incoherent) has been to date, ad hoc patches ad experimentia drawn from his plentiful toolbox – as earlier attempts (all) fail to please. He even tried doggying it around Washington after Hank Paulsen and that didn’t do much good either apart from enriching a few members of the elite. Has Ben received his OBE yet? Oh, they may be too busy at the moment for that.Mr. Obama has a “plan” too, except that apart from his resonant drawl containing well rounded huge generalities (imagination fodder for the unwashed masses) that really could suggest that perhaps a problem(s) could exist, nothing really substantial, er, exists, er, as a “plan”. Nothing new here Horatio.George didn’t have a “plan” as he didn’t like “goddamm bits of paper”.A Plan, a Plan; my kingdom for a Plan…Good work Professor as you have nailed it: We need a “coherent Plan”.In the meantime, don’t despair as the lads will be working hard for your tax dollars in the Moral Hazard workshops of every Nation.Ho hum

Their profits and profit projections all fell offa cliff togetheras the consumer shut down.

AM,Are you the mirror image of MA?:-)Don’t ignore the second and third words in your quote: “at best”. I think these provide all the answers you are looking for, at least for the UK.Professor, thanks, once again, for your generous sharing.The only clear conclusion I get from all the stuff I read here and elsewhere is that the world economy seems to still be very far away from been “out of the woodwork”. As the folks at ECRI point out, the leading economic indicators are still FAR from showing any kind of recovery. The evidence at this point doesn’t even provide a floor on how deep the recession is going to be.Most economic analysis with a positive/hopeful twist* to it seem to be based on the premise: “Gee the FED and other CBs around the world are performing an unprecedented amount of calisthenics; gosh, it has got to work, they are trowing everything but the kitchen sink to it!”.But the truth is that so far all we have seen is an improvement in credit statistics (Libor, TED spread, etc.) that are supposed to indicate credit markets are in their way to recovery when in fact the links between such credit indicators and credit expansion in practice are fuzzy at best. For example, credit spreads for investment grade corporate bonds have stopped shrinking/have widened a bit since the new year so their price has come right down with that of long maturity treasuries. As a result, one of the supposedly “slam dunk” investment ideas for 2009 has so far competed well with the decline we have seen in equities so far this year. I find it ironic that the position in LQD I established recently is the worse performing one in my portfolio YTD:http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chdet=1232792023765&chddm=5865&q=NYSE:LQD&ntsp=0 .Dat is what you get when you decide to trust Bill Gross, once again, instead of your own DD. I Guess some people will never learn:-)An interesting*See foe example, NT’s Kasriel/Bangalore latest economic forecast for the US economy, endorsed by CR in a recent post. They are not only predicting the US economy will resume growth late this year. They are already worrying about the next recession circa 2012, triggered by FED tightening starting the second half of 2010. Gee, what is the make and model of the binoculars they use. I want to get one just like theirs!http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0901/document/us0109.pdf

Can someone direct me to a site that can answer this or maybe someone here has the answer. If our debt today is 10,642,210,000,000 and we are going to add 2 billion this yr, how much is the interest on this each yr ? and we are going to lower taxes for 2010 and 11 while increasing spending ? So by 2012 what will our tax rates be just to pay the interest on this debt ? It would seem like Obama will have to cut a lot out of the budget in a few yrs and with very high tax rates. Maybe we can sell a few states, Louisiana, Mississippi, Oklahoma and Kansas, North Dakota, we should be able to get a pretty good price for those. Maybe the Dutch would want Manhattan back.Is it possible to keep up paying the interest on the debt by 2012 ? how much a yr per tax payer will it cost ?

Octavio,I find myself wading thru comments looking for yours.Time for your own blog? Cheers

he found a 50b bid for a worthless company. it should go down as one of the greatest trades of all-time

US options players bet on rebound in financial sectorFri Jan 23, 2009 5:02pm ESThttp://www.reuters.com/article/marketsNews/idINN2329809420090123?rpc=44“…Investors earlier this week took large bearish positions across individual bank stocks and the XLF as capital adequacy fears grew, said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.But on Friday there appeared to be massive institutional sized trades in the February $10 calls, conveying the right to buy the fund at $10 within the next 28 days.At one point in the session, more than 250,000 February $10 calls changed hands with investors paying premiums at around 60 cents, according to data from Interactive Brokers Group.”At that premium and based on an XLF share price of $8.90, when some of these trades occurred, investors are predicting a 19 percent rise in the fund in the next 28 days,” Wilkinson said.”I went the other way around. I took the bullish position on XLF leaps on Inauguration day. People are paying 60 cents for a $10 strike price, a “flyer” that will expire in less than a month! I wouldn’t play Dat lottery! I paid $2.54, which is over four times more, but I did it for a $10 January 2011 expiration date. Of course, the hope is that XLF is well above the current price of $8.90 by then.So an interesting question on the risk of leap option arises: Suppose XLF just hoovers around where it is today even by late 2010(we could check other scenarios but this one feels pessimistic enough AND it is the one I have price information for readily available now). The question is: how fast does your option investment losses value under this scenario?We can approximate* an answer to this question by looking at the Friday of closing price (or bid if there was no trade) for the $10 XLF call option in reverse chronological expiration date order:XLF $10 call option:Expiration date: Price (% loss from $2.53 investment) Remaining lifeJAN 2011: 2.53 (0%) 2 yearsJAN 2010: 1.82 (28%) 1 yearSEP 2009: 1.62 (36%) 8 monthsJUN 2009: 1.31 (48%) 5 monthsMAR 2009: 0.86 (66%)FEB 2009: 0.60 (76%)How to read the chart: Pick for example the bold line which I refer to as the “sweet spot” in the “worst case” 50% loss sensitivity analysis I spoke about in a recent post.The bold line means that if XLF does nothing price-wise, and I hang into the call option for 19 months, so that only a five month life-span remains in the option (i.e., XLF is still trading around 8.90 by August 2010), I loose 50% of my investment. That seems like a reasonable bet to me as a lot of water will go under the bridge in the next year and a half, and my bet is that:1) financials are a critical part of the US economy.2) the US banking system cannot be allowed to fail.3) The US will not go the Chavez way. We will remain a capitalist country with private banks. And, like with the citi bailout, the FED/Treasury will continue to give equity holders a free put as these entities will eventually have to raise PRIVATE capital in the equity markets.* There are other variables, in addition to time, that affect the price of an option, the key ones being volatility of the underlying security and interest rates (the more volatility/higher interest rates are, the more expensive the option) Keeping these variables fixed in our exercise seems reasonable for reasons I will not elaborate upon to keep the post short.

According to NR, there are $1.8 T of losses at banks/brokers. Do you really think that the FED/Treasury will continue to bail out all the way to $1.8 T? Where will the money come from? Treasury sales? Who will buy the Treasuries?

i meant 2 trillion this yr

I prefer the Professor’s prognostications to the prescriptions he proffers. To wit:

A credible and consistent economic plan requires: very easy and unorthodox monetary policy (zero policy rates, quantitative easing and other unorthodox programs to thaw money markets and credit markets); a fiscal stimulus package that combines near-term easing with commitment to fiscal discipline over the medium terms; a coherent plan to clean up the financial system (triage between solvent and insolvent banks; takeover and workout of insolvent ones; recapitalization and clean-up of solvent ones with separation of good and bad asset and conversion of unsecured bank debt into equity to reduce the fiscal costs of the bailout); a plan to reduce the debt burden of the part of the household sector that is insolvent; a plan to stop a free fall of the housing market and of home prices including foreclosure forbearance.

Note how the Professor’s standard recipe for getting the economy out of the mess has evolved. He has always called for triage, but note how he now adds the good bank/bad bank model to his meme. What a coincidence, as this has now risen to high favor in the Obama team as well. He also clearly calls out debt to equity conversion, another thing I have heard is gaining favor. Note the call for ‘medium term fiscal discipline’. These are code words for the tax hikes being planned in Washington. Look at California for a sneak preview of the drama coming to a national capital near you. Also, he puts forth adequate cover for the coming great mortgage bailout in its various proposed forms. Oh, the Professor is right on top of the future here. You can bet on it.Methinks we have a pretty good crystal ball in the good Professor. He clearly has the inside track and the ear of TPTB and, in order to keep his edge, his predictions evolve, if ever so slightly, to keep him ahead of what actually comes out from them.As to his over-optimistic prediction for the UK (and the US) I can only say that his crystal ball has still not revealed to me just what the economic activity of these zombiconomies will consist of after the debt pile completes its collapse. Forecasting any kind of recovery seems like a fools game until this is figured out.ex VRWC

http://clusterstock.alleyinsider.com/2009/1/preventing-the-greatest-heist-in-historyThe next step in the TARP saga will be the GREATESTHEIST IN HISTORY. I have no faith that Geithner, Summers and Bernanke will do what is best for this country. We all must be very vigilant and get informed before they execute the next 350 billion!

my problem with Bill Gross is that I don’t trust him (e.g. he talks his own book under the guise of dispensing economic wisdom) – he came out after the Fannie Freddie bailout (from which his company made $7bn) with the following statements:LA Times September 7, 2008″But Gross has asserted that the feds needed to act for the greater good of the economy and the financial system, not just for the continued health of his Pimco Total Return bond fund, the world’s largest. The $130-billion-asset fund is up 3.5% this year, ranking it in the 96th percentile for performance among bond funds.Gross said he believed that the Treasury’s rescue plan would go a long way toward improving sentiment in the financial and housing markets.For the financial system, “The Category 4 hurricane has been downgraded to a tropical storm,” he said.”http://latimesblogs.latimes.com/money_co/2008/09/bill-gross-the.html

Totally agree! Until the banks are restructured as utilities and the FED replaced as a government run (not quasi private) regulator, the manipulation and destructive gutting of the American taxpayer will continue with financial enslavement simply passed on to future generations. The public must demand total transparency, honest regulation, accountability and prosecution in order to stop America’s sprint toward 3rd world status!

ORIs it reasonable to question the GDP number from the point of view that it is a changing target (value)?What I am trying to say is that the GDP will certainly go down with recession (depression) taking hold and increasing unemployment. Since the debt value is constant (or increasing) and GDP decreasing the debt to GDP percentage will increase.What is your take on this?

Excellent suggestions! They only have control of us through debt. Minimize or eliminate debt (borrowing), support local banks or credit unions, refuse to participate in their fixed gambling establishments (financial markets) and guess what-the predatory part of the financial services sector will disappear and maybe more efforts will be focused on manufacturing and producing things that actually benefit the country instead of the top 0.1%; otherwise, 3rd world status here we come!

Professor: “The US has also a busted banking system and an insolvent household sector (or part of it) but so far the sovereign has the willingness and ability to socialize such private losses via a vast increase in public debt.”There it is again. That part of all of these arguments that I somehow still can’t understand. Just exactly who is this sovereign that has the willingness to sop up all that debt? ¿MOI?

Finally, a solution!! Let’s sell a few states!!

thought experiment.ok, so i’m paying6.75% interest on a home loan on a very modest home (that sits on nearly an acre of land) – $114,000 left to pay (and I did NOT use my home as an ATM, I did NOT refinance, this is the original loan.)8.5% on the parent-portion of my kids’ college loans – $18,000 left to pay6% and 9% on two car loans – $20,000 left to pay (yes, sue me, I’m paying for cars for my kids to get to their classes and to the jobs they both have always had simultaneous with school)from 7.9% to 13.9% on credit card debt accrued ENTIRELY – as in I started at ZERO balances when the job was taken away – while very-long-term unemployed through NO fault of my own whatever – $64,000 left to paySo, who wants to gamble this current job isn’t going away, too? It’s computer programming for an outfit working for a bank ultimately owned by RBS. Feel sure enough I’ll have my job in future to lend me the total of $216,000 – so I can pay YOU the interest instead of the plutocrats?And, would YOU charge me usurious rates like they do?

Don’t forget that all the people who saved all the people’s lives that day were Union members. All of them.

So we start with a business plan for your household, examinine the income and the outgo. This is also referred to as a budget, but we treat everything as an investment, like a business would. Sever the emotional ties. Is your house ‘unsellable’? It is unsustainable for you? Is there a way to reduce your expenses? Are the auto loans upside down, or could cheaper transportation be substituted?A business plan includes planning for eventualities. If the income from your programming skills disappears, what other income streams can we imagine? What is your core skill set, and how can it benefit the new economy? In other words, what is actually in your control? Are there services you can offer, or things that are outgoes for you that can be turned into income streams? Any home based means of earning additional income? How about your land? Can you build it out or put a mobile home on it and rent that out?The point is, don’t just consider your situation in terms of the preexisting debts and the job you have now. What are the possibilities? Form those into more concrete plans, and make a ‘business plan’ for your household.A local collective who would extend you credit might start with such a business plan. Figure that out realistically, follow it or promise to, and such a collective might actually find a way to help you check out of the system. Remember, the motive is not to generate huge returns, its to work together and generate ‘reasonable’ returns while shaping a better future. You are in the current system, so there is some price to be paid to get you out of it, either in retiring your current debt orrestructuring it. Heck, maybe even the government helps in this part! But, over time, people would no longer have to become so ensnared if alternatives existed. It would be an ongoing process.Sure maybe this is unrealistic. But maybe, just maybe, it is also possible. Wouldn’t it be a nice change?

Yeah I tried that before too, when the Professor used to call for ‘rapid’ triage of zombie banks, but then quit stressing this point so much in his later writings. I posted some old quotes and asked why the changes.Thanks for the research, it helps to look at more than just the moment, but to look at the evolution. By doing so we deduce more of what is actually being said and why.

Doug Nolands view of the US parallels to the UK. I fully agree with his view and repeat my assertion that global currencies will be inevitably forced to return to the gold standard:”I fully expect our Post-Bubble Financial and Economic Predicament to parallel that of Britain. At some point, our problems will likely be of much greater scope due to, among other things, our system’s larger size. So far, the U.K. has suffered a more acute crisis due to its inability to stabilize its troubled financial sector. For one, it is suffering through a more destabilizing outflow of speculative finance (unwind of carry trades). Also, the U.K. financial structure has traditionally been less government-influenced – leaving it today more vulnerable to a crisis of confidence. Outside of government debt instruments, confidence has faltered for large cross-sections of U.K.’s financial claims (“moneyness” has been lost).Our system has to this point proved relatively more stable due primarily, I believe, to the instrumental role played by government and quasi-government institutions such as the FHA, Fannie, Freddie and the Federal Home Loan Banks. The market’s perception of “moneyness” is retained for multi-Trillions of U.S. claims – a dynamic that bolsters the view that the U.S. dollar retains its “reserve currency” and safe-haven status. And as long as this confidence holds, faith in the government’s capacity for system “reflation” endures. But it all has the look of a fragile confidence game, and I fully expect the invaluable attribute of “moneyness” to be tested at some point.There is absolutely no doubt that a massive inflation of U.S. financial claims is in the offing. One would suspect it is only a matter of when market perceptions of “moneyness” adjust. This week’s jump in gilt yields could portend a troubling new phase in the U.K. financial crisis. It could also be a harbinger of a more general crisis of confidence for global currencies and debt markets. The long-bond suffered its worst week since 1987 (according to Bloomberg). Gold was up $43 today and $56 for the week.”http://www.prudentbear.com/index.php/commentary/creditbubblebulletin?art_id=10180

Whatever happened to London Banker? He’d given me the impression that the U.K. was far more capable of dealing with the financial crisis (than the U.S.).MarkP.S. Great to see you back Gloomy!

I work for a small B2B company. There is no conspiracy. Demand fell off a cliff around September. With reduces sales and high levels of uncertainty, and no way to assess whether company debt can be rolled over, you play defensive. Retrench, lower costs, hunker down til things stabilize and visibility improves. Unfortunately this results in a bunch of layoffs (we let go about 10% last week).Corporations are acting completely rationally, but the net result is a nasty recession. We need to find the bottom of this thing, then the ‘real economy’ can assess where we are and start working out way out of it.

g and a,lazer! drop the fed. they are a net destructive, uncivilized, parasitic, war mongering, organized criminal element committed to ponzi economics and ponzi government, aka a one world, new fascism, agenda. shadow fascism you might say.another thing..this speculation that is the basis of our economic world view today, it is becoming all consuming and pointless and destructive. but. creative destruction is forbidden (bailouts).so we have systemic inconsistency and ensuing insanity wasting all human potential, energy and creativity is becoming synonymous with destruction. chaos, systemically driven.it is fear based. the ego structure, arrogantly believing it has arrived at a point of completion takes as it’s purpose to convince and convert others to accept it’s delusion, fear and irrationality. it projectsitself and looks for conformation using persuasion techniques and other enforcement measures. it also sees as it’s natural goal the projection of itself, or the illusion of itself, into the future. mask of fear..so at any time, while environmental conditions may change, the ego will use it’s best condition memory of a state of being and attempt to control environmental conditions and plan to project these into the future. selfishly speculating and securing.out of desperation many bad assumptions are employed to construct this speculative plan, unknowns being threatening and oppressive.so illusions and speculations upon speculations, perceptions and facts, in isolation, replace understanding and being. ego has a problem with context, always. no one really cares what the reality is. we all want to know what it MIGHT/WILL become. why? because we are relatively safe NOW, but fearful. so, while everything is satisfactory? in our immediate environment (the world) we are driven to continueto project the false ego structure into a false future. all imagined for the sake of the survival of a deluded and narrow projection of ourselves.human culture with a very small c, the disease overrunning the planet and its resources in a ponzi speculative nightmare. thank god it isinsolvent, i say, and we will become human and make our societal structures consistent with that or, we will stop pretending we are human altogether and that will be that..the plan, honest assessment of resources available, internal and external. develop an understanding of how these, as matched with demand / need can be effectively employed. plan for 100 years.yes. this takes the thinking beyond the ego in consideration of humanity. as pjb say. if you think out 100 years you are planning and preparing for another bloke’s well being and that always results in a better condition for the original speculator, if you want to live in a free society. (human)..and here is a twist..”the dream will not come to those who sleep”richard nixon, 1969. inauguration address. before he went to china to awaken the sleeping giant and all its laborers, in preparation for the great imbalance and induction into the big dream.but i rant.. apologies.

I’m with ex VRWC on this.The govt. has an incentive to bail out (restructure) the banks. They are going to do that on your back. So, not only are you going to shoulder that mortgage, the kid’s education, the vehicles, the credit card stuff, but you’re going to pick up the tab for the excesses of the corporate office too – and your children, and their children…Nobody has an incentive to bail out (restructure) you. You are going to have to do that yourself. Change is not coming top-down. Don’t wait for it. The top has no incentive to do that. And neither they or anybody else is going to gamble that your job will last either. You are completely on your own.Hard words. Don’t think I don’t sympathize. I do.

Where is the market going next? As usual, a futile question which gives an excellent opportunity for journalists in need to make a leaving to fill the airwaves and kill lots of trees. However, Santoli’s take this week is among the recent few who, IMO, have a decent shot in answering the eternal question in a relevant manner:http://online.barrons.com/article/SB123275469154111683.html…The markets, too, have taken on a look reminiscent of those September/October conditions, when no price was too low at which to sell a bank stock, the bank insolvency crisis was assumed to be intractable, and despite persistent weakness in the indexes, the market proved generally unable to anticipate the extent of the lousy economic news to come. General Electric (GE), then as now, trades like a pure financial company.The clustering of days when at least 90% of stocks and volume were either up or down has been heavy the past two weeks, as then. Often the market feels to be trading as a single unit, perhaps befitting the $70 billion or so in total daily trading volume across more than 700 exchange-traded index funds — a quarter of that volume in “leveraged” ETFs.Yet what about some deviations between this bumpy January and the route taken to the market lows of last fall?First, there are no runs on major banks. And the essential circulatory functions of the interbank market are back working (with much policy-maker help).While the banks index has made successive new lows, the broad market hasn’t (yet) followed, though for the past 15 months the former has tended to lead the latter.For the moment, buyers seem to have congregated near 800 on the S&P and 8000 on the Dow, several percent above the Nov. 20 bear-market lows.And the selling pressure, while often heavy, isn’t accompanied by the hourly fear of indiscriminate margin-call or fund-redemption liquidation. The rare companies offering upside profit surprises are even managing to have their shares rally on down days. Small favors, for sure.Boil it all together and strain it through cheesecloth and the result remains that the Nov. 20 level appears to represent a plausible, if not probable, durable low. In a “normal” bear, during even a severe recession, perhaps it would be a high-probability bottom.Jeremy Grantham of asset manager GMO, long correctly bearish on stocks, sums up the tactical/strategic dissonance for investors.He now believes we are set up for equities to deliver reasonably good multiyear returns and advises slowly moving cash into stocks, while also suggesting a final downleg is likely to send the S&P toward 600, around many technicians’ target, “as markets love to overcorrect to the downside after major bubbles.”…

Thanks for the sympathy, FT, and yes gents, I know ain’t no one coming to my rescue. Here’s what I was writing back to exV:Seriously, let’s take this thing down to street level, and consider what’s happening to the working people who are bailing out the world’s billionaire banksters and gamblers:In our thought experiment, I am 60 years old and a long-ago veteran of 3 years Navy service on a wooden minesweeper and 3 in the Naval Reserve. Had one year of college, above average student, had to go to work to feed a wife and myself. Both our parents were working class, we didn’t come from money. I’ve a sterling work record, highly praised in all reviews at all times in continuous career. Data center operations shift manager first, then compelled (willingly enough) via series of frequent sales and re-sales of company ownership, in which I eventually lost all ground gained – and then some – from the 14 new-ownership salary and benefits “restructures” (in 27 years) where every new purchaser clipped the company employees even more – compelled to evolve into a mainframe Cobol programmer and analyst, all this in insurance and banking industry. Received top grades in all career-related classes taken along the way. Never could quit in all those years because the same was everywhere anyway in this neck of the woods – and the wife has a chronic (thankfully not constant) painful health issue – and at least we had insurance. Changing employment for any reason would have meant exclusion of her “pre-existing condition”, which was by far the biggest health expense we bore. Actually, she worked where I did, too. I hired her, and was her supervisor for a time – before she became mine, chuckle chuckle. The last company we were sold to shut us down. (And they did it behind the backs of their customers. We had to sign secrecy waivers to get our meager severance pay.) Many, many jobless dumped all at once on precious few opportunities for employment. So, after 27 years faithful service, and having never quit a job, I worked for 14 different owners. Even got my 20 years of service plaque from a company that had only been in business for ten years. Funny, right?27 years, working hard, being responsible, playing by the rules, obeying the law, raising 2 great kids. No delinquent bills, no bankruptcy, good credit, payroll savings bonds going in the bank. Then: Income to zero – except for what little the wife has brought in along the way. She works hard, too, but her health problem has always lowered her earning power. The unemployment stretches, in between the jobs I could find as a self-employed contractor, ran for months at a time. Even so, every time I did get work, we managed to pay off the cards we’d had to run up. (We should get a medal for that feat!) Wife wanted to declare the obvious bankruptcy a couple of times, but I wouldn’t do it because I had to have a charge card or I couldn’t get to the jobs I had off and on where I had to be on site, not tele-commuting, and so had to charge plane tickets and rental cars, hotel rooms, etc. Most expenses were reimbursed, but you had to pay big up front and wait for the money to come back – which it did, but only after there was interest added for having it on last month’s credit card bill. Economic death by a thousand ‘minor’ cuts…So, unemployed repeatedly, all reserve that had been saved is used up first, then you sell off what material goods will bring you something in, then comes the days when living expenses have nowhere to go but the charge cards. And you pay and pay, but the water heater goes extinct and a deer runs out in front of the kid on his way home from work, and you break a crown in the back on the left and – well, you get the idea.The wife has never owned a matched living room or bedroom suite, or any fine jewelry. (She brags about her microwave oven being the same one she bought in 1982 and still working – fixed once back in ‘91.) She doesn’t mind – she seriously doesn’t. She feels bad about all her health expenses over all the years. The cost of Cobra insurance and then private insurance – up until it simply wasn’t possible to keep anymore – outraged her plenty. It shortens lifespans, they say, to have to worry over what happens if the kids get sick. The private insurance was about the last thing we let go of.In our experiment, I live in the central or upper Midwest, where public transportation is not viable and not provided. “Bedroom community” to what we call a “Metro area”. I tele-commute to work on the East coast. Wife doesn’t want to leave the property much anymore now that kids are grown, prefers her home and garden. Says people are walking around unconscious, and this society is not her thing. About the only place she makes herself go is the grocers, since she stopped visiting the nursing home patients. We don’t go out, unless you mean walking the 2 little dogs. Only the kids drive anywhere, and cars are, as I said, their only means of transport in winter and the only means for beyond-bicycle-distance trips anytime. Yes on the upside down on auto loans. Home IS a mobile home. Well, no, it’s not. It’s a manufactured home – a doublewide. It depreciates in monetary valuation each year – only my parcel of land maintains value. This 8/10ths acre grows part of our food and fruit. The powerful builders/developers and their lobby have it all legally sewn up against manufactured homes. This one is only allowed in town because of the size of the parcel, and because it’s set on a permanent foundation – there’s a poured concrete basement under us – but it is unheated. Adequate housing priced less than mine is not so easy to find. We had to sell our first home way back when, and we’d been renting for years when this place came up for sale. At the time, I was losing what retirement was in the market, and wife insisted we cash it all in and buy this land – which we did, getting the keys on September 10th, 2001 – yes, the day before “that day”.Expenses beyond fixed expenses are all spent at Aldi grocery (actually our much-preferred store) and on aging parents – and at the Veterinarians, the dentist when we’ve been able, doctors and hospitals when we must, car maintenance and repairs (the wife and I have each owned exactly one new car ever in our lives), appliance repairs, etc. Our spurge is the votive candles at Dollar Tree. What can I say, the wife loves burning candles in winter. They were always 4 for a dollar, but a few weeks ago they went to 3 for a dollar. Wife’s about out of her stash of the former, so there’s an expense I could cut, maybe. You’ll have to tell the wife she has to give away her dogs. I’m not breaking the heart of a woman who has stood shoulder to shoulder with me through thin and thin – no can do it to her, she’s had her heart broke enough with the repeated joblessness we’ve been put through.I don’t know – you think it’s ever gonna stop being me who gets to bail out the governments’ friends? Is it ever gonna stop being me who has to contort his life around and exhaust ingenuity to keep a roof over his family’s heads and food on the table?Am I to blame?

And you want to know what the real hell of it is? Throughout all this, I am made aware by my good wife that there are probably billions of people in the world who would trade us places in a heartbeat.

Your story, guest, should be front and center on the New York Times, Wall Street Journal and the Washington Post. It is my story. It is our story. I thank you from the bottom of my heart for speaking the truth about what has happened to the middle class. The collateral damage of disaster capitalism.

GUN TO OUR HEADS?Interesting blog, but my gut still tells me the house of cards are falling due to globalization’s clear failure…..hence, even the ships afloat are turning into Big Three Titanics.I was writing on the Searttle Bubble blog how some of their bloggers feel that Microsoft and Boeing figuratively have a gun to Seattle’s head….”let us bring in cheap insourced youth [overpopulation] or we move it all out to China, India, etc”.I’m smiling at that fear, its very similar to tying overpopulation environmental destruction in Seattle to the race card. Its a moot point and clearly off topic. No true environmentalist can preach green and overpopulation at the same time; unless the completely lack common sense.Boeing’s 7X7 tried moving its engineering base to South America, even laid off a huge percentage of the department to implement the brainless plan. Then it dawned on the brainless management [I imagine none of them got fired either]; its cheaper to use experienced high paid engineers in Seattle than try to make them move [they won't by the way] to South America to attempt to teach other countries our aerospace secrets. The 7X7 is delayed, because subcontracting moved off shore and the young inexperienced foreign companies can’t deliver on time. Airbus sharply curtailed its off shore subcontracting because its costs went through the roof.Same with Microsoft, you can’t off shore operations with inexperienced technicals; its company suicide.I bet UK has some similar stories too. Globalization without experienced technicals is dead in the water. the other domestic risks the globalists won’t talk about are sharing our technical secrets with countries like China, then they develop technologies like lasers [and we trained them] to use against our militaries.

Professor, I’ve read your work for a decade. Intensively for the last 2 years. Your analysis has always seemed impeccable. Sometimes your prescriptions have been counter-intuitive to me. But I’ve accepted them. You’re the expert. This is the first time that I just can’t accept your analysis.What does solvency mean for government? Solvency, the ability to liquidate assets to cover liabilities doesn’t apply to governments. It doesn’t apply to banks either. Mismatches in term prevent banks from liquidating current assets to meet current liabilities. Banks operate as insolvents. OK. Sure. Accountants have a way to fudge that by applying a different definition of “solvency”. Stretching the meaning. How do you liquidate government to satisfy creditors? Sell highways and buildings? And over what term? How do you match up the term of government assets and liabilities?Solvency of government and governmental “financeability” (sic) – the ability to finance borrowing – are the same thing. You are making some kind of distinction. There is none. Governments too operate as insolvents. There is never a question as to solvency. Only to the ability to finance debt. Government, and banking, is all about cash. Either a government can meet its cash requirements or it can’t. And there is the magic – fiat currency.Problem comes when nobody believes it! And it comes suddenly. As does bankruptcy. Everything goes along quite fine, even though insolvent, until something happens to confidence. Some minor creditor sues. Something that otherwise might not seem important. Think Bear Sterns. Then – Paul Krugman’s Wiley E. Coyote moment!Bernanke seems to think he has time to withdraw all that quantitative easing. After all he is writing term for 90 days. I’m telling you. That’s too long. When this goes down it will take moments.

Gloomy says: “Doug Nolands view of the US parallels to the UK. I fully agree with his view and repeat my assertion that global currencies will be inevitably forced to return to the gold standard:”Naive comment: We went thru the great depression with the gold standard. Why would going back to it be such a great idea now?http://en.wikipedia.org/wiki/Gold_standard

I’m happy that you recognize that there are those who would change places with you. Not long ago I had an argument here with MA in which I was trying to explain the feelings of Cuban-Americans for Cuba who had left everything there to come to this country. I think I didn’t really make myself clear. I would love to write a number of “case studies”.I would tell you that I myself have always had things easy. But just as past performance is no guarantee of future earnings. It could get that hard for all of us. Are we up to it?We must break these bonds. End this servitude. But change will be bottom-up. Pitchforks & torches. Empowerment comes through collaborative efforts. Just as ex VRWC was saying above.

FEATUREWarren’s Unhappy New Year by Andrew BaryWarren Buffett’s affinity for a group of financial stocks probably is dragging down Berkshire Hathaway’s vaunted equity portfolio this year.http://online.barrons.com/article/SB123276579876112571.htmlFinancials are trading below the November lows, but not BRKA. IMO, this puppy will revisit its November lows soon, unless banks turn around presto on an Obama bank/economy bailout expected soon*.Even at the November lows of around 77K I am not so sure BRKA would be a good buy. It is a good alternative to a hedge fund as WB works for free but, IMO, even a price of 77K does not reflect a high enough expected return to cover you for an unexpected bad news on WB who is turning 79 this year. He is the soul of this company. Can you imagine what would happen to the stock price if, god forbid, news of even a mild stroke were to hit the wires? A 50% drop anyone?*Besides an inaugural address that criticized Wall Street, President Obama is viewed by many traders as a wild card. On one hand, he said the market’s “power to generate wealth and expand freedom is unmatched.” On the other hand, he ended the sentence by saying “this crisis has reminded us that without a watchful eye, the market can spin out of control — and that a nation cannot prosper long when it favors only the prosperous.”This clever, two-part construct is important. After an unusually wild week, many traders spent Friday covering bearish stock and options positions. Why? President Obama was rumored ready to introduce a fiscal stimulus package over the weekend.”No one wants to be short,” says Pat Neal, Jefferies’ equities strategist, “but if nothing is announced, the market will probably get whacked again on Monday.”http://online.barrons.com/article/SB123275420818011563.html

http://www.guardian.co.uk/business/feedarticle/8288576

Soon, it will not be banks that need the TARP. Malls around USA will need TARP as stores closes or in process of closing with “75% Everything Must Go” Sign. Malls will be empty with no stores to sell anything. Why would store sell anything with “50% off” sign to entice buyers to spend money? Why should buyers pay for whole price, when they can pay for “50% off”. No stores can survive in this environment. Malls will be struggle for its survival and in need of TARP money.

agree; price deflation feeds on itself into a deadly down spiral but Walmart will be the beneficiary; our govt is either totally ignorant, blind or plainly doesn’t care that many small businesses in this country are hanging by a thread and once they call it quits, the malls and the rest of commercial real estate bites the dust. I’ve got to believe that Obama will not let this final “commercial cornerstone” of our economy crumble, so I do expect passing of a large bailout to address this sooon!

GDP USA:= 70% Consumer + 20% Financial Industry + 11% Manufacturing.Huh?= 0% +/- 5% Consumer + 0% +/- 5% Financial Industry + 0% +/- 5% ManufacturingHuh?Government Spending: – 30% in stimulated GrowthOh!Ho hum

For the Outerbeltway Team: (I hope that I have the name correct, if not, sincere apologies):From Hellasious:”It is, therefore, a given that in order to rapidly establish a Sustainable Economy we have to radically transform our present monetary system which is geared exclusively towards the ever-expansionary Permagrowth Economy. This is crucial: no matter how many wind turbines we install and how much organic food we eat, we must also design and install the proper monetary apparatus if sustainability is to work.”An important post; a vital point; a qualitative post. Call it, a vital part of the Plan, er, after the fundamentals, that is:)Ho hum

Hello Guest,Thank you for your story. I guess my diatribe touched a nerve. I cannot tell you you are to blame. Of course not. I don’t know that I would have made the choices you did, but I can understand why you made them. That is not the point. Please do not interpret my focus on a ‘business plan’ for your household as being judgmental. More like a focus on being dispassionate, if that is possible to do.Its obvious you feel trapped, in a cycle with no end, just keeping your head above the water. I would hope our future new economy would find ways to help you sensibly restructure such debt burdens. Obviously in the future economy some creativity, much thought, and some charity toward each other will no doubt be required.

I was trying to get at this in the discussion of exiting the ‘credit system’ I initiated in my post above, but I am sure my vision is not as expansive as what you or Hellasious have in mind. I am talking about baby steps.Should you wish to illuminate me further, I would be grateful, as I am in a position to facilitate some of these discussions as a part of OuterBeltway’s effort.

Search through some old context article files say around 3 to 10 past articles, you search (Edit/find in Firefox) for OuterBeltway’s posts – I have no access for facilitation; but I remember that he set up an email address for this purpose:sorry.

I disagree. Not only is the US debt level higher, but the people in charge are NOT smart enough to control monetizing debt. No country has ever successfully self-financed its own deficit. The dollar not withstand it.This game is over. Maybe there is a new game?

I keep recalling various striking comments and historical recollections from the time of the Great Depression era and believe me, it fills me with dread.- The general population was fed a regular diet of soothing platitudes from Govts that the situation was under control and that measures were in hand to resolve it. “We have a formula to fix this”- People were regularly advised by Govts (they had no choice but to trust,) that very soon things will turn around, our actions will produce good results soon.- There were many false dawns, with prices actually rising in ’34, 35 and ’36 I believe before again heading lower and deeper into Depression levels.- Wages (of those fortunate to be employed) were cut with Govt sanction and unions were cowered into lowering resistance for the greater good of keeping employment , such that there was, going. Only to realize years later that this had a singularly negative impact , probably keeping Depression conditions alive much longer than had wages been negotiated fairly. Confidence does not grow in people who see their meager wages under constant threat that a Govt agrees should be even lower.- At the time of Pearl Harbour, the unemployment rate in the US was in the mid to high teens. 12 long and terrible years after the ’29 crash. During which time the best minds in the world (at the time) enacted all manners of programs, policies, and remedial actions only to see them swallowed by the resolute unstoppable force of what was essentially a reset in GDP triggered by a massive change in sentiment towards risk and borrowing. Manifested in massive bank closures and corporate collapses. Govt could not even find the answers they had so diligently promised their populations they already had.I can’t help thinking that ultimately those Govts came to realise they were powerless. They knew that having exhausted their bag of tricks with such regular and comprehensively failed results, their (unstated) focus turned towards maintaining social cohesion as their unstated goal. And prayer. That their societies would somehow hold together until SOMETHING turned this god awful mess around.That generation is pretty much gone, the children of the GD generation are dwindling leaving the Boomers – 2 generations removed – in control. Brought up on the belief of entitlement, debt and massive borrowing from tomorrow. Where spending and more debt was always THE solution to keeping the great game going.Only a fool would not acknowledge that we are deeply, and I do mean DEEPLY in the s**t. The prospects of stabilization, let alone recovery appear nowhere as yet so most definatley the worse is ahead of us. Yet still we hear those soothing platitudes…… those promises……those programs and policies so fervently proposed as solutions…… and knowing that all those years ago our ancestors ears heard similar propaganda, with quite possibly the same belief that many in our societies feel today.Let us all just hope, and pray, that the “solution” the politicians of that era found for their GD will not be repeated this time.

How did the US become the sole power house in the 20th century??when production capacity/ability of Europe (both parties axis/allied) are decimated, the Over-production capacity of the US factories took over..(that ended the GD..)why get in the way when people are destroying each other economic capabilitiescome in later and make a big impression (WE saved the world from tyranny!!!),Im sorry but this is the story of WW2, people might not like it but US was just playing its cards right…so to answer GSM, because of MAD maybe, MAYBE they will not pursue that option..but if all of us was in a another dimension where nukes dont exist, i think WW3 have already begun…

We are going back to gold because all major currencies will be printed like mad to compensate for deleveraging-politically their is no other choice. However, market participants will worry what the effect of such massive printing will be and will boycott fiat currencies until they have a substantive basis. Returning them to the gold standard is the obvious choice.

When one has more another has less… The U.S. was able to get MORE through the illusion that others could get more if they followed the U.S. example. Problem is/was, this is a PONZI SCHEME! There aren’t enough resources to sustain ALL countries/peoples living at the insane levels of the U.S. (and the West in general).The failure in “confidence” that we keep hearing is code for others not playing the game anymore. The rest of the world is tapped out, they can’t sustain their “production” of resources.Stabilization is going to be found at a significantly lower level than most are accustomed to.Mark

More on the spread of the financial crises.Italian towns have an estimated cumulative loss of 35 billions euros in failed investments with Wall Street and European banks: http://www.beppegrillo.it/eng/ (Jan 22 entry)The author of this blog, Beppe Grillo, despite the dubious credentials (he started his career as a stand-up comedian) is worth of a lot of respect in his economic and political comments. He was the first of talking of the insolvency of Parmalat 2 years before the banckruptcy of the company (one of the biggest corporate failure in Europe and the world).

If the UK is like the USAnd the US will be like IcelandTherefore, the UK will be like IcelandThe only difference is how big each gas tank is and how far away it can carry it before the economic machine stops. Gas happened to be credit and the US happened to have the bigger tank, trying hard to fill it one last time. Ironically enough, the world is round. Once you travel half of it, it is not the one who drives more that gets farther. It seems we already traveled more than half.For any Black Swan spotters, your Australia is, IMO, the ABILITY of creditor countries to continue fueling the ever expanding deficits and bailouts of the US, UK et al, rather than their willingness (it is a big lose-lose situation).The next logical question to this might be what could be the reasons/situations that could hinder creditor countries’ ability to buy more US securities. Answering that question is made possible by answering another set of questions; what are the sources of the money used by creditors to continue buying US securities (the “why” is also important but irrelevant in the case of ability vs. willingness). The next question to be answered is what are the key levels at which the ability of each key creditor country to lend is in jeopardy (this question is of course dependent on the previous one).The sources of “money” are, I believe, export revenues, savings and CB money printing (mainly for currency competitiveness reasons) and carry trades. A correlation analysis I did between major creditor countries’ trade balance with the US (Exports minus Imports) and outstanding US treasury securities holdings (US bonds) showed a very strong correlations (around 90%) for China, OPEC, Russia … and weak correlations (less than 30%) with other main holders (Japan, UK, Caribbean …). The difference is also noticeable and producing more or less identical groups if we divide outstanding holdings by trade balance. For the first group outstanding debt represents between 10 and 20 times period’s trade balance (in average) vs. 100 and more times for the second group (think of it as leverage but don’t ask where it came from yet).Based on that, one is tempted to cluster creditor countries to hard exporters (China, OPEC, Brazil… and part of Japan’s exports) and soft exporters (international financial centers aka money laundering and smuggling centers: London, Caribbean … and a big part of Japan).A severe recession in the US (the consumer-driven part of it anyway) did and will continue to play downward pressures on both volumes and prices of imported products and commodities from China, OPEC and other countries. Credit, banking and financial crisis part is and will be limiting leverage, currency trades, and carry trades significantly constraining USD securities laundering. Trillions of dollars in bailouts and rescues are effectively destined to make sure that the credit crisis is contained. But that cannot be the case unless the consumer-driven recession is reversed. Offering more credit is not sufficient to do that. In fact all those trillions are not sufficient to even cover up the losses from past years, let alone restarting the engine. Said differently, more money is borrowed (in the form of bailouts) to make sure that even more money is lent, or so their assumptions and logic seem to be (quite a leap from the traditional Ponzi-scheme; more money is borrowed because more money was lent)If we assume Roubini’s predictions as base scenario: the economy will continue sliding throughout 2009. Before the year ends, at least $2T worth of UST securities will be needed just to absorb bank losses at the same time the Chinese and OPEC net export revenues will take a hit (with a 90% chance that their net UST securities buying will follow) and at the mist of 4 year long UST net selling period from the Japanese. In addition, the total outstanding UST securities has been increasing by $20 billion a month in average (that is $240 billions a year). Assuming Japan will continue decreasing its UST holding at the same rate (optimistic), that all other exporting countries will have the same holdings in Oct. 09 as they did as of Oct. 08 (highly optimistic = no global recession), that UST issuance will increase by the same rate as it did over the last 8 years in addition to the “one time” $2 T” (optimistic), there will be a hole of $2,300 billion to be financed. I don’t know if it will be possible to crowd out that amount from other asset classes (which are already highly cannibalized).There are only 2 very short-sighted solution to keep this rigged game going (for a while anyway): make sure at least part of the crisis felt by investors (whenever the start gaining confidence they will move their investments to more risky assets = flight off safety = leaving the Government holding the bag) and make Central banks print money to buy treasuries in a grand scale.Lastly, the fact that the UK is like the US is not consolation either. If anything, both are competing for scarce “change” … err … money, and when things will get tougher, it will be the UK who loses first.

How can anyone be bullish? The housing market is in decline, and will most likely drop another 20% in 2009 alone— further slaughtering MEW (mortgage equity withdraw, and thus consumer spending, since no one makes money, they just withdraw their house appreciation). Banks (and I mean the entire financial sector) are failing miserably, and this will get worse, before it gets better. Economic data will continue to get worse. The E of PE will continue to deteriorate, and PEs thus will rise, that is, until the P come on down again, so basically the stock markets are still overvalued. Especially, when you consider that PE ratios (really fractions) are nearly in line with historic norms, of 11 to 14, currently, and since we’re going into what I describe as “The Greater Depression,” then the PEs should not be near (or in-line with) historic norms, nope, they should be lower, near historic lows!! The average PE in the USA for stock indices should probably be closer to 6— not 11 to 14!!! So once again, the markets are elevated, dignified, and too high, and will depreciate some more. Secondly, the business cycle is still weakening, and faster than a lot of people thought. Things will continue to get worse, and faster than expected, and EPS estimates are still too high, and disappointments will be perceived as bad. Fixed income is best, try TIPS (ticker TIP)— principal adjusted to the CPI-U and a real yield applied to the adjusted principal, for growing principal of the TIPS and bigger coupons (assuming inflation over the long run). Also, unemployment will rise to maybe 11 to 13 percent, labor force participation rates will decline with people getting discouraged, and output will decrease, as layoffs ensue. There maybe be a 5 to 7 percent drop if US GDP!!! Then wages will decline, and corporate profits too. I also see labor force participation rates declining from here. I feel as though there is no catalyst what so ever for the stock market to rise anytime soon. Nope! The only thing we can hope for is a change in the perception of risk, and perhaps a boost to confidence. Looking ahead, long term, in the 3rd and/or 4th year of Obama’s presidency, maybe Obama will bring about some PE expansion, as confidence comes back, after the opposite happened for literally the past 8 years— when there was PE contraction during the entire Bush Administration as confidence fell off a cliff, along with the US dollar. Is the US Dollar a dead cat bounce?? I worry about that. Come next spring when things do not get much better, if at all, the potential for a summertime sell off will be horrendous— and maybe a total default will happen in the USA? Maybe that’s just too sarcastic? Maybe we’ll just get a big sell off in spring and summer, and some foreign sovereign defaults, and then things might begin to stop getting worse at that point. Come the end of this summer, maybe things will begin to hold their own, and maybe asset classes across the board will actually rise? I think the housing markets (and commercial property) will experience another twenty percent sell off in 2009, so what a mess things are, and will be.Beware of Obama’s solution, of borrowing more and more money (which reminds me of Bush— then again who would dramatically decrease government spending too fast?!), trillions at a time, for bailouts, TARP, capital injections, capital infusions, emergency economic stimulus packages, emergency economic stabilization acts too, and for saving capitalism itself, in the government’s eyes. Nope, they are (the government) in my opinion acting like socialists, and maybe even communists. They should try some Laissez-Faire attitudes and approaches themselves. They caused the entire problem (the prior administration and the entire congress), they should stop borrowing too much money too fast, as it crowds out investment and borrowing, and does great harm to the capital markets, and society at large. I fear for our future.Additionally, with bank (and the entire financial sector’s failure and looming bankruptcies) people will have to use FDIC & SIPC which will infuriate people with the entire banking sector— I see a total loss of confidence looming in American, and abroad. People will be wondering if capitalism is dead or something. Clearly, the Government scoundrels need to limit their borrowing and reckless spending of borrowed (printed, and tax revenue) funds. I see great risk of intense regulatory changes, additions, and more political risk itself. This regulatory risk is enough to make my stomach hurt. Maybe the Congress should try to regulate itself, and limit its own reckless stupid spending sprees. Nationalization of the entire financial sector is also not a good idea. Laissez-Faire, no government intervention please!~ Andrew G. Bernhardt, St. Louis, MO.http://www.google.com/search?hl=en&safe=off&q=+site:www.rgemonitor.com+www.rgemonitor.com%2BBernhardt,%2BRGE

I’ll second that!

The latest from Mauldin is a very good one. He is A LOT more bearish than he has been lately. I think he is a bit depressed (who wouldn’t after writing about diz stuff?)http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/01/24/here-comes-tarp-3-and-4.aspx

Oh,Happy New Year to all…

Hey no worries, exV. You did sound dispassionate, not judgmental at all. I know you wanted to be helpful, and I appreciate that – and the other kind responses. It wasn’t bad or useless advice or perspective you gave – just some things are not so doable in our circumstances. I told my story in hopes to illustrate that families in debt and struggling really can get where they are without having been stupid or lazy or irresponsible or mindless spendthrifts, etc. It really can happen to anybody – unless you left the starting gate with big riches on your silver spoon. I mean, I’ve worked hard all my life, I served my country (like generations on both sides of this family have), I’m not a gambler, I rarely drink alcohol, I’m helpful to neighbors and parents – and Paris Hilton gets to be fabulously rich and famous just for: being Paris Hilton. Is she contributing more to the country than I am? My daughter is so much prettier and smarter and nicer and more responsible than PH – and what’s her future gonna be? She’s done volunteer work with severely challenged kids in a convalescent home since she was a pup herself, and she’s worked for pay since she was 14, she’s a highschool State Scholar, getting her degree with almost completely straight A’s in college, and working almost fulltime hours a week, too – taking thoughtful care of babies at a daycare. I don’t know how she does it all. And my son’s the same. He volunteered at that same convalescent home, and was a swimmer in highschool. Up before dawn, in the school pool and weight room for hours before breakfast and after classes. He’s the kind of kid… if you don’t tell him “hey, you don’t know HOW to do (something)” – he’ll just go on and do the thing. And make a success of it. He hadn’t had a single swim lesson beyond the wife showing him how to swim as a kid, yet he dove in and won the very first race he entered. And he got himself up a rock and roll band for awhile, after, no kidding, teaching himself how to play bass guitar and write music and lyrics. He made a couple recordings, got played on the local radio stations, they toured the country on a shoestring budget playing with friend-bands like Fall Out Boy (before they were famous), and his band came in second place in a contest to be opening act for the kickoff of a Bon Jovi tour. Got beat out barely, by an experienced and long-popular band. Those kids practiced their all-original songs for uncountable hours in our unheated basement – and we loved how this house rocked when they were at it. But they never got the breakthrough and he knew he had to get back in school so he could “get a real job”. So now he’s majoring in journalism, and working while at college at the school’s quarterly magazine and at the city newspaper. But what’s his future gonna be?Of course it’s going to be: working lifelong (if he’s lucky?) his high IQ brains out and strong back off, to pay for this unconscionable heist by the bankster fraudsters. Him, and his sister, too. And their kids, too – and damn if I don’t figure THEIR kids, too. It isn’t fair. There isn’t one goddam fair thing about this deal. It’s always been millions of people like us who built this country – and people like these few rich gamblers who tear it all apart. I don’t know if I could actually rip these perps limb from limb with my own two hands – but I’ll tell ya my wife could, and would. Put her Irish temper in a locked room with Dick Cheney or Henry Kissinger – or half of congress or a sneaky snake like Geithner, and I’m afraid those boys would be bloody goners. Part of that credit debt we carry was from –get this – having to write one of those credit card checks to pay our taxes a few years ago! And what was that Geithner doing while I was paying MY taxes? What was Madoff doing while I was sending out hundreds of resumes, seeking work as its own fulltime job?My wife posts on this board, you see. I’m typing from her sign-in. I’m married to that woman you all know as “Mother of God”. (That moniker, btw, came from my own Catholic Mother, who is always exclaiming “Mother of God! What are people thinking?” when she watches or reads the news.) You guys here have “Mom’s” true affection, really you do, the whole lot of you, but you get “Mom” pretty riled up sometimes, always about laying the blame on human nature or the general public, and about the insistent support for competition. Maybe now you see better where she gets her indefatigable egalitarianism and her relentless, fierce, unflagging support for working people.And I agree with her 100% on the matter of us needing (as the mother of all needs) justice in our economics…about us being so far from being rational about how money works. I think she and her teacher have got it nailed, that the work is spread so the wealth has to be spread, too, and not spreading it is exactly how we get into these booms and busts. It makes perfect sense to me what she says about the pool of wealth being finite and only work creating the wealth in the first place, so only work deserves to get paid. I think her teacher really ought to be awarded a PHD in economics, and he oughta get a Peace Prize, too. (And wifey ought to get credit for carrying such a heavy load trying to educate those around her. She works so hard to pass the baton of knowing.) I never heard anybody else identify the drop of theft that happens in every transaction when two things get exchanged, and I don’t hear anybody else identifying all those legal thefts for what they are. I want you folks to know that she sits at this computer every day looking at two photos she has taped up: one’s a little bloody dead boy in Iraq with his haircut lying on the other side of the street in the gutter, and one’s a recent addition – a really little girl in Gaza, buried up to her dead chin in concrete rubble. My wife says they’re her angels – she fights for them – for the descendents they’ll never have – and she’s never giving up the fight. She loves the Jewish people like she loves all of humanity, but is stricken to her bones watching the State of Israel go right down the path that led to people in ovens. Mother of God, humanity IS walking around unconscious, it seems to me. These horrid photos are stark proof! Some groups of people are deprived of everything, and in this world we’re suffering from too much production? How can that be?I’m no economist, but it sure looks from these haggard eyes like a distribution problem – just like my lovely, determined, cantankerous wife says it is – so I’m all for this fairpay justice system she’s trying to get everyone on board with. I’ve put all my own ‘hope for change’ behind her succeeding eventually. Got to get the potatoes out of everybody’s ears, first, I guess. I figure this meltdown is helping with that part. There has to be a silver lining to this very dark cloud, right? (Don’t answer that.)Anyways, I’m on call this weekend and have to quit now and go sign into work on my own computer – we’re doing disaster recovery “drills” before Monday. If they let me post all this personal drivel, then I guess this place of Dr. Roubini’s gets highest marks in the free speech department. ( Wife’s been telling me she can’t understand why somebody complained about censorship here. She thinks that’s inaccurate and unfair to the long-suffering moderators – I wouldn’t know.) But thanks for hearing me out, y’all. Pretty good of the Doc to let everybody in for free when they need information the most.By the way, the Aldi’s ketchup tastes just like the Heinz we used to buy, and it’s much cheaper. There’s my money-saving tip for you – to earn my keep! Take care, everybody, and thanks again for your kind responses to the story of our lives. I hope it won’t become everybody’s story…but I guess that’s up to us, because waiting for help from those wealth- power giants who engineered the robbery just isn’t an option.

easy…..get rid of the federal reserve.

Thank you for the post Octavio!1)secutization was the true lending source and the banks were intermediaries that can’t bring lending to the levels securitization allowed. A replacement to securitization is needed.2)FDIC is at risk from banks being forced to lendwhen conditions are risky.3)debt restructuring is indispensable to bring the debt values in line with the diminished asset values and the intermediators and investors must take losses.Mauldin lays out the problems that are not really being dealt with sufficient speed. I can see why Octavio calls this pessimistic. The policy makers are not discussing these points and we are in somekind of banker’s denial that they screwed things up so bad that the whole system has to be rebuilt from scratch.

The situation is so desperate that the powers that be have manufactured a deliverer figure for the masses to toil with faith devoid of violence. We are now part of the anthropological Cargo Cult that waits for irrational money to drop from the sky to resolve long term internal contradictions and limits of unfettered unregulated capital. Can somebody explain to me who in their right mind did not understand the pathological acquisitor mentality that empowered by software and computer would take acquisition for the sake of acquisitionto its apocalyptic chaos state? Think of it as a mass hallucination of pathological economic glutonny by narcissistic acquisitors that are convinced that if they crash the whole system, they can pick it up for nothing. This is acquisitor nirvana and also the end of capital as we know it. The elite of the elite have accomplished their mission, and all they now need is security and gated compounds while the chaos brings prices down. We are all collateral damage.These guys act as if humanity is a video game.

Oh, wow do I wish I’d said that. wow.Can I use your wisdom-condenser?wow.

From the NY Times article featured at Calculated Risk and and posted above Obama Plans Fast Action to Tighten Financial Rules , the following excerpt:

The new trading procedures for derivatives could also enable regulators to impose capital and collateral requirements on companies that issue credit default swaps that would make them safer investments. American International Group, one of the largest issuer of such swaps, never had to post collateral and nearly collapsed as a result of issuing a huge volume of such instruments that it was unable to support.Officials said the plan may include a broader role for the Federal Reserve in protecting the economy from companies whose troubles pose system wide risks, as the report issued under the leadership of Mr. Volcker, a former Fed chairman, has proposed. The report was issued this month by a subcommittee of The Group of Thrity, a not-for-profit body of senior representatives from various governments and the private sector. The group’s members include Mr. Geithner and Lawrence H. Summers, the director of the White House National Economic Council.

Many of the same group (legislative and executive branch) who are currently in power were in power when the regulations were removed and in power as the credit bubble expanded. Their actions facilitated its expansion and did nothing to prevent it. The Group of Thrity referenced in the Times article includes a distinguished membership including Volker, Krugman, Geithner, Trichet and Summers. Other members include a cross section of Central bankers, politicians and Goldman, JP Morgan types.The Chairman of The Group of Thirty is a name not likely familiar to most, Dr. Jacob A. Frenkel. His resume is quite interesting. On May 3, 2004 he was appointed Vice Chairman of American International Group (a position he still holds) and Chairman of AIG’s Global Economic Strategies Group. Prior to AIG Dr. Frenkel served as Chairman of Merrill Lynch International Inc. and as Chairman of Merrill Lynch’s Global Financial institutions and Sovereign Advisory Groups.I don’t know about you all but I feel good knowing that this Group of Thirty is helping to map our way out of this economic mess.

The stimulus package and the “aggregator bank” are being discussed simultaneously. If we don’t keep our eyes open, we will see the Taxpayer buy the worst of the Troubled Assets at above market price. Paulson recapitalized his fraternity and Geithner will dump the most toxic assets on the Taxpayer. The reason Paulson didn’t do it earlier is that the citizenry would be looking intently at the details. The new Administration has so much to propose simultaneously that people will not be able to discern the details. Magicians know that slight of hand requires diverting the attention of the subject. Our political process is based on deception and slight of hand. Keep your eyes on the ball!

Somebody tell Ali Baba and the Group of 30, that according to Satyajit Das’ January postings in the RGE monitor, Lehman’s CDS auction losses of 6 billion were supplemented by 300 to 400 billion in losses that were covered for the Banks by government intervention because they took deliveryof reference bonds. THE HORSE IS OUT OF THE BARN!The Credit Default Swap Disaster is already here and the government will have to print money till kingdom come unless they run some kind of debt restructuring on CDS, because it seems American Banks sold CDS protection to many foreign banks who reside in countries that finance our sovereign debt. They should fess up and tell usthat they have to restructure the whole globalarchitecture and everybody has to take a haircutto bring debt down to the value of assets that were hyperinflated in value.

Yves has also weighed in on the Times articleObama’s Financial Reform Proposals: Less Than Meets the Eye

excellent summary! + U R rite. If you combine the capabilities of a broken financial system with a sliding economy and a cornered US consumer, I just don’t see a way out. I guess Kasriel & Co. know/see something I don’t. I am a bit depressed too.Let’s see how the last week of January goes. The potential for a further slide into the November lows is quite likely. Unlike BG I have no need to talk my book:-)

And those 2 things Pete will go a long ways to helping us…. lol… I agree Obama and his team are nothing more than the same old stuff, all with ties to Wall Street and specifically Goldman or Citi… You and probably 10 others on this Blog would be much more effective in addressing all the issues then these folks… it just the same old politics and protection of thier “system” which 99.9% of us can never become part of….Obama’s plan is a total joke in terms of job creation…. We will lose 6 million more jobs this year, there will be 22-28 million unemployed and he thniks 3-4 million job creation program is the answer….

Or in this case, trips of the moon around the earth as it makes a trip around the sun.

Guest, this is very interesting.Perhaps you can explain something else to me.In the past 3-1/2 years since I’ve been looking to purchase a townhome, I’ve noticed something. In the online MLS listing, there’s a question at the bottom: “Owner is an agent?” One out of three homes I’ve looked at has had a “yes” answer to that question.One-third of the homes owned by an agent?Smells of speculation to me.A realtor with whom I worked for a while told me his boss was “moving money around in the retirement account” in order to purchase townhomes at lower prices, then would maybe spend a few dollars painting, and turn around and sell at a huge profit a couple of months later.No one seems to be talking about this little ponzi scheme. How many instances of this were out there? The number of realtors in the past five years or so went through the roof. Everybody wanted to be one. And why not? Huuuge commissions on inflated home prices.So don’t you think this may have contributed at least somewhat to the housing bubble? Maybe more than we think?

He lost my respect with Geitner. Terrible Treasury Sec. Either he made an honest mistake and doesnt know how to do his taxes and isn’t bright enough to get an accountant, or he cheated. He is either incompetent or a cheat. This is the new culture of responsibility?

Gehusenteit

They’re expanding Bagram prison while closing Gitmo, Pete, and Bagram is an even blacker hole of hell. And it isn’t from salaries they in white house make most of their money. That’s just where they build influence they wield in the private sector after leaving the WH.

The NY Times article is based on this Group of Thrity report, Financial ReformA Framework for Financial Stability

Did my ‘wow’ sound sarcastic, Morbid? I assure you it wasn’t! That is about the most profound and condensed bit of wise summary I can imagine I’m ever going to hear. I, too, wish that guest would “vent” on!

Hi Mark:Experience at Microsoft and Boeing is most of the impact. I agree with you the costs of spreading things all over the world is daunting too; and I too would put more emphasis on that cost/schedule impact, except for one key point.During globalization’s relentless destruction of America’s industrial base our companies and government agencies got real cheap the last couple decades. They’ve shrank in size and the employee average age has sky-rocketed….meaning, they’ve abandoned R&D with experienced and youth combined together to develop a future. Hades, even the PhDs aren’t publishing hardly anything anymore, everyone’s been working too hard to pay for a home to care about carving a country’s future.Add mostly unnecessary unskilled overpopulation pouring into America like hot oil grease, you get the picture. The domestic tax base is broke, which further mitigates the developed countries ability to pay for the destruction of their infrastructure [i.e., schools, hospitals, roads, destroyed wetlands, destroyed fishihing zones, melting glaciers, etc, etc]from this overpopulation….we’re talking about a $1.6T bill for this in America since 1990 and these Paulson bailouts don’t fix any of this infrastructure destroyed by overpopulation added since 1990 [it wasn't added domestic by the way] from abroad.

As usual, the private-for-empire interests pretending to be government take us one more step into despotism. The Group of Thirty is nothing more than a non-governmental body that acts as the government.Long before Barack Obama wins the Democrat Primary contest, the Group of Thirty included Geithner, the future treasury secretary; Volcker, the future senior economic advisor to the White House, newly-created; Summers, the future director of the powerful White House National Economic Council; and bailout media-economist Krugman, the future Nobel prize winner and guru apologist for explosive-governmental spending for the incoming Obama Administraton. (Coincidental?)In a May 26, 2008 article entitled “Fed’s Geithner Says World Economy Is Coping With U.S. Slowdown,” Bloomberg referred to this Group of Thirty at its Jerusalem hosted event as the G-30, “a private group mainly of current and former central bankers…”Jacob Frenkel, the G-30′s chairman and vice chairman of American International Group, said at the meet, “The lesson is that we need to make economies more flexible.”In a related article on May 26, “Group of 30: the Conclave of Financial ‘Geniuses’ Meet,” Elaine Meinel Supkis, writes: “The US is leaderless right now. But the international ruling elites, the international brain pool, the international noogies who paw all over each other at Davos or Paris or New York, these guys will slog onwards without any US leadership. They are what they are: the Real Rulers…She gave this G-30 excerpt report from 1981:“70. Other proposals are directed towards upholding confidence in the international banking system in times of stress; various arrangements to provide supplementary liquidity to the system at such times might be devised. One suggestion is that a “safety net” be established among the major international banks to assure access to liquidity when the inter-bank market is under stress. We recognize the attractions of such proposals but, on balance, we do not think they are likely to be effective in practice.“Proposals to structure a safety net on the basis of swap arrangements between commercial banks (drawn along the lines of similar facilities between central banks) suffer from the critical weakness that their effectiveness depends on inter-bank confidence, which is precisely what is lacking in crisis situations. In such situations, only the central bank has the competence to act as ‘lender of last resort’ and the authority to require acceptance by all parties of its terms.”Says Supkis: “As here we can see how the baby Derivatives Beast was born. As a protector of the banks. As a safety net that would prevent failures. As a small thing, a key, a tool to be used carefully to spread risk and deal with sudden inflationary price surges caused by wars… To protect banks from the effects of the floating currencies that were bobbing and sinking… The Derivatives Beast…Concludes Supkis: The US banking system is bankrupt…who are the G 30 liars kidding? It’s “time to examine the Group of 30.”http://elainemeinelsupkis.typepad.com/ezmoneymatters/2008/05/group-of-30-the.html

m and g1 and g2 and….i too would like to add a number of wows on this one.as far as g1s taxes, i have no idea. this g1 may have no taxliability or may not be concerned whatsoever as it may just befigured in.but, the mind that synthesizes that statement is a most precious andbeautiful thing, a “song of itself” ..and.. i believe g1s “venting” has been on this blog before. i think i recognize intelligence / intellect when i see it? but then again , i am blind in some respects.

g,how is a 50 thousand dollar loss stated as “income” of 50 thousand? this sounds impossible, even today.

Will old-fashioned scrip make a comeback?IN 1933, in the depths of the Depression, Irving Fisher, America’s most prominent economist, wrote a pamphlet on “Stamp Scrip”. This was a type of alternative currency popular in America and elsewhere at the time that was periodically taxed with a stamp so that it would be spent, not hoarded.Based on the theories of Silvio Gesell, a German “quasi-economist”, one such currency, the wära, was used to revitalise Schwanenkirchen, a Bavarian coalmining village, in 1931. “No one who received wära wished to hold [them], the workers, store-keepers, wholesalers and manufacturers all strove to get rid of them as quickly as possible, for any person who held [them] was obliged to pay the tax. So wära kept on circulating, a large part of [them] returning to the coal mine, where [they] provided work, profits and better conditions for the entire community,” Fisher wrote approvingly.“The miracle of Schwanenkirchen” is a historical footnote, but as deflation fears increase, and interest rates fall close to zero, the allure of such currencies may resurface. Though there are alternative currencies everywhere, Germany is particularly fond of Gesellian depreciating varieties. Bavaria still boasts the biggest in the country, the chiemgauer.Named after the region where it originated in 2003, the chiemgauer can be used alongside the euro in more than 600 shops and firms in the area. About 300,000 of them are said to be in circulation. In the town of Traunstein, the chiemgauer can be spent on newspapers and food and some people are paid in it.Spent it must be, because it loses value every quarter. The notes have an expiry date after which they need to be renewed with a sticker costing 2% of their value. The quicker money is spent, the faster, in macroeconomic terms, its velocity. Gesell argued that a higher velocity of money helps combat deflation.Some of Gesell’s theories were rejected by Fisher. But generations later, zero interest rates in slumping Japan led to renewed debate about a temporary tax on money to encourage spending.Gerhard Rösl, professor of economics at the University of Applied Sciences in Regensburg, who wrote on alternative currencies in 2006 for the Bundesbank, says the overall stimulus from such schemes in times of deflation may be short-lived—because, though the velocity of money increases, its supply tends to shrink. For now, the amounts in circulation are minuscule. Most are a gesture of defiance against globalisation by encouraging local commerce rather than a rigorous economic experiment. But there may be more converts if monetary policy eventually runs out of roadhttp://www.economist.com/finance/PrinterFriendly.cfm?story_id=12998254

Miss Italy:Looking forward to hearing from you. I’ll check out that video, and thanks.outerbeltway at yahoo dot com.Rest of the gang: Next conf call Feb 4 8PM EST. Send in e-mail to get the coordinates.There’s been lots of progress since our last conf call in Dec.Next train: Feb 4 8PM EST.OB

PeterJB:The address is outerbeltway at yahoo dot com. I saw your post about money – thanks. I invite you to contact me. We need some more strong backs, big hearts and expansive intellects.Each of you heavy hitters: you’re invited to help convert talk to action. If I don’t call your name specifically, just chalk it up to my ignorance and take this opportunity to set me straight.Feb 4, 8PM EST next conf call. Send in a request for an invite. We need you and you need our team. In the first 10 minutes you’ll be able to determine whether this is fluff or rock. PeterJB, if you can’t make the call because of time-zone deltas, let me know, and we’ll do a one-on-one.OB

Get the hook!

g,thank you for the service you gave and continue to give to your country.and thank you for telling your story and the ketchup tip.if your son would make an autobiographic documentary featuring you and your wife speaking the truth to power that would be an amazing thing.hell, you two should start a university.ps. is mog’s book completed?

came across this interesting site that’s an interactive chart exploring relationships – this one is for Timmy G. NY Fed’s Timothy Geithner has high-powered mentoring group

The Group of Thirty was founded in 1978 by Geoffrey Bell at the initiative of the Rockefeller Foundation, which also provided initial funding for the body. Its first chairman was Johannes Witteveen, the former managing director of the International Monetary Fund. Its current chairman of trustees is Paul Volcker.Membership ~The current members of the Group of Thirty are:· Paul Volcker – Chairman of the Board of Trustees; former Chairman of the Federal Reserve· Jacob A. Frenkel – Chairman; Vice Chairman, American International Group· Geoffrey L. Bell – Executive Secretary; President Geoffrey Bell and Company· Leszek Balcerowicz – Former President, National Bank of Poland· Jaime Caruana – Counselor and Director, MCM Department, International Monetary Fund· Roger W. Ferguson, Jr. – Chief Executive, TIAA-CREF· Stanley Fischer – Governor, Bank of Israel· Mervyn Allister King – Governor of the Bank of England· Guillermo Ortiz Martinez – Governor, Banco de México· Jean-Claude Trichet – President, European Central Bank· Tommaso Padoa-Schioppa – Minister of Economy and Finance, Italy· Zhou Xiaochuan – Governor, People’s Bank of China· Yutaka Yamaguchi – Former Deputy Governor, Bank of Japan· E. Gerald Corrigan – Managing Director, Goldman Sachs, former President of the Federal Reserve Bank of New York· Andrew Crockett – President, JP Morgan Chase· David Walker – Senior Advisor Morgan Stanley· Guillermo de la Dehesa – Director and Member of the Executive Committee, Grupo Santander· Arminio Fraga Neto – Partner, Gávea Investimentos· Domingo Cavallo – Chairman and CEO, DFC Associates, LLC· Martin Feldstein – President, National Bureau of Economic Research· Paul Krugman – Professor of Economics, Woodrow Wilson School, Princeton University· Lawrence Summers – Charles W. Eliot University Professor, Harvard University· Ernesto Zedillo, Director, Yale Center for the Study of Globalization, Yale University, and former President of Mexico· Gerd Häusler – Vice-Chairman Lazard International· Abdulatif Al-Hamad – Chairman, Arab Fund for Economic and Social Development· Montek Singh Ahluwalia – Deputy Chairman, Planning Commission, India· Mario Draghi – Governor, Bank of Italy· Timothy F. Geithner – President, Federal Reserve Bank of New York· Philipp Hildebrand, Vice-Chairman, Swiss National BankSenior Members· William McDonough – Chairman, Public Company Accounting Oversight Board· William R. Rhodes – Senior Vice Chairman, Citigroup· Ernest Stern – Partner and Senior Advisor, The Rohatyn Group· Marina v N. Whitman – Professor of Business Administration & Public Policy, Ford School of Public Policy, University of MichiganEmeritus members· Rt. Hon. Lord Richardson of Duntisbourne – Honorary Chairman· Erik Hoffmeyer – Former Chairman, Danmarks Nationalbank· Shijuro Ogata – Former Deputy Governor, Bank of Japan· Richard A. Debs – Advisory Director, Morgan Stanley· Wilfried Guth – Former Spokesmen of the Board of Managing Directors, Deutsche Bank· Sylvia Ostry – Distinguished Research Fellow, Munk Centre for International Studies, Toronto· Gerhard Fels – Former Director, Institut der deutschen Wirtschaft· John G. Heimann – Senior Advisor, Financial Stability Institute· Toyoo Gyohten – President, Institute for International Monetary Affairs· Peter Kenen – Senior Fellow in International Economics, Council on Foreign Relations· Jacques de Larosière – Conseiller, BNP ParibasOther former members:· Austrian-American economist, Fritz Machlup· former Kennedy-era treasury official, Robert Roosa· former deputy Bank of England governor, Rupert Pennant-Rea· former Bundesbank President, Karl Otto Pöhl, and· the former Federal Reserve chairman, Alan Greenspanhttp://en.wikipedia.org/wiki/Group_of_Thirty

So investors get to hold tax payers hostage? Ha call their b.s. bluff is what I say to do because there’s no equity left in the banks anyway, their threats are hollow and desperate. Nationalize the banks protect savers and account holders of course but screw the investors they deserve the nothing their holding on!!!

Byuing the 20 Bonds.The reasoning behind this move is that most mortgages are amortized over a 25 year Period. In real world and in Practice most mortgages are paid off in 20-22 year time frame, that is when times are good and housing market is stable and is witnessing a sustainable growth rate. Hence even though buying the 30 year bond will push the long term rates down buying the 20 year bond will be of greater help and multiply Feds efforts to ease credit in the markets.If the program is successful and the 20 year rate goes down then the home owners with only 15-20 years of amortization left will benefit. Also most business will benefit as well. even the longest of the business debt is paid out within 20-25 year period.

saw him too; the man cannot answer a question and is a bumbling BS artist.

Well said, guest, and I thank you for the clarification. A tragedy, indeed.My concern lies more in the fact that the realtor was not using his own 401(k) funds but that of his employees. It’s one thing to risk your own money; quite another to risk someone else’s.And therein, of course, lies the truth of why 99% of the wage earners in this country today are floundering. We never learned how to game the system, you see? And now we pay the price for not doing so.

The latest from Pettis on what appears to be a developing Trade War Perhaps canceling purchases of the Financial Times won’t be enough

…Until Chinese officials recognize some of the problems that they themselves have created I think it is nearly impossible that this will come to a good end, and I think those last three paragraphs should worry us all. It may very well be true that China’s “price advantages are the result of the low cost of labor, land and other resources,” but if the level of the currency doesn’t matter to China’s trade competitiveness than why not simply appreciate and make everyone happy? Since a price advantage is by definition only relevant in comparative terms, and if the level of the currency affects comparative prices, then the claim that China’s trade surplus is based on a price advantage and not on a low currency is not terrible meaningful.What worries me more is the last paragraph. Vietnam, South Korea and a number of countries have seen their exports fall far more than have China’s, and in many of not most cases they are depreciating precisely in an attempt to regain their competitive levels against China. If China sees their depreciation as a justification for their continued currency policy, I am afraid that there is no way for this process to end. It will descend in trade war. China, like the US in the 1920s is unable to understand that as a major power it does not have the luxury of acting like just any other small country. It must take the lead in the adjustment among Asian exporters, and that almost certainly means that its exports and trade surpluses should fall faster that that of the other countries.

It’s only a regressive tax if you are associated with the oil companies.

I agree. We’ve been suckered. We’re being held hostage by hollow bluffs. They’re holding onto nothing.

http://www.ft.com/cms/s/0/ce5e1eb6-eb1a-11dd-bb6e-0000779fd2ac.html?nclick_check=1Super Tarp is coming! We still remember that FASB recommendations on off balance sheet asset being brought back on the balance sheet and the level 3 assets who price is “not easily discernable” must be eventually priced. Even though I think that the overpayment by Treasury for the worst of the Troubled Assets will be used to bootstrap the price of the Level 3 assets higher. Quit lying to the American people. Nationalize the banks!

Apparently Obama’s affinity for high tech gadgets goes way beyond his Blackberry.”Less than 72 hours after Obama’s halting, stumbling public recital of the presidential oath (I suspect the words “preserve, protect, and defend the Constitution of the united States” burned on his tongue), he underwent the now-familiar presidential rite of passage by becoming a war criminal. Specifically, Obama ordered a lethal airstrike using a Predator drone against a target in Pakistan, a country with whom we are not at war, but toward which Obama has expressed aggressive intentions.”http://www.freedominourtime.blogspot.com/Link to the story:http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5575883.ece

From Times Online link above:President Obama ‘orders Pakistan drone attacks’Tim Reid in WashingtonJanuary 23, 2009 — Missiles fired from suspected US drones killed at least 15 people inside Pakistan today, the first such strikes since Barack Obama became president and a clear sign that the controversial military policy begun by George W Bush has not changed.Security officials said the strikes, which saw up to five missiles slam into houses in separate villages, killed seven “foreigners” – a term that usually means al-Qaeda – but locals also said that three children lost their lives.Dozens of similar strikes…Richard Holbrooke, 67, a veteran diplomat known as “the bulldozer”, was appointed as a special envoy to Afghanistan and Pakistan last week.Related Story: Obama airstrikes kill 22 in Pakistan

Obama’s NeoconThe Curious Case of Richard Holbrooke by Joshua Frank (excerpt)January 24, 2009 — In wee morning hours on Friday, January 23, a U.S. spy plane killed at least 15 in Pakistan near the Afghanistan border. It was Barack Obama’s first blood and the U.S.’s first violation of Pakistan’s sovereignty under the new administration. The attack was an early sign that the newly minted president may not be overhauling the War on Terror this week, or even next.As the U.S. government fired upon alleged terrorists in the rugged outback of Pakistan, Obama was back in Washington appointing Richard Holbrooke as a special U.S. representative to Pakistan and Afghanistan. Unfortunately, like the remote control bombing that claimed human life, Obama’s vision for the region, in the embodiment of Holbrooke, may not be a drastic departure from the failed Bush doctrine. Or a departure at all.”[Holbrooke] is one of the most talented diplomats of his generation,” Obama said during a January 22 press conference at the State Department. In his speech Obama declared that both Afghanistan and Pakistan will be the “central front” in the War on Terror. “There, as in the Middle East, we must understand that we cannot deal with our problems in isolation,” he said…If we track Holbrooke’s recent statements, the disturbing symbiosis between him and figures like überhawk Paul Wolfowitz is startling.”In an unguarded moment just before the 2000 election, Richard Holbrooke opened a foreign policy speech with a fawning tribute to his host, Paul Wolfowitz, who was then the dean of the Johns Hopkins School of Advanced International Studies in Washington,” reported First of the Month following the terrorist attacks in 2001.The article continued: “Holbrooke, a senior adviser to Al Gore, was acutely aware that either he or Wolfowitz would be playing important roles in the next administration. Looking perhaps to assure the world of the continuity of US foreign policy, he told his audience that Wolfowitz’s ‘recent activities illustrate something that’s very important about American foreign policy in an election year, and that is the degree to which there are still common themes between the parties.’ The example he chose to illustrate his point was East Timor, which was invaded and occupied in 1975 by Indonesia with US weapons – a security policy backed and partly shaped by Holbrooke and Wolfowitz. ‘Paul and I,’ he said, ‘have been in frequent touch to make sure that we keep [East Timor] out of the presidential campaign, where it would do no good to American or Indonesian interests.”In sum, Holbrooke has worked vigorously to keep his bloody campaign silent. The results of which appear to have paid off. In chilling words, Holbrooke describes the motivations behind support of Indonesia’s genocidal actions:”The situation in East Timor is one of the number of very important concerns of the United States in Indonesia. Indonesia, with a population of 150 million people, is the fifth largest nation in the world, is a moderate member of the Non-Aligned Movement, is an important oil producer – which plays a moderate role within OPEC – and occupies a strategic position astride the sea lanes between the Pacific and Indian Oceans … We highly value our cooperative relationship with Indonesia.”Joshua Frank is co-editor of Dissident Voice and author of Left Out! How Liberals Helped Reelect George W. Bush (Common Courage Press, 2005), and along with Jeffrey St. Clair, the editor of the new book Red State Rebels: Tales of Grassroots Resistance in the Heartland, published by AK Press in July 2008.

Richard HolbrookeFrom Wikipedia, the free encyclopedia (excerpt)Richard Charles Albert Holbrooke (born April 24, 1941 in New York City of Jewish parents emigrated to America and Princeton graduate), Special Representative for Afghanistan and Pakistan under the Obama administration, is a top-ranking American diplomat, magazine editor, author, professor, Peace Corps official, and investment banker. He is also the only person to have held the Assistant Secretary of State position for two different regions of the world (Asia from 1977–1981, and Europe from 1994–1996).From 1993–1994, he was U.S. Ambassador to Germany. Although long well-known in diplomatic and journalistic circles, Holbrooke achieved great public prominence only when he brokered a peace agreement among the warring factions in Bosnia that led to the signing of the Dayton Peace Accords, in 1995. Holbrooke was a contender in the replacement of Warren Christopher but ultimately lost to Madeleine Albright in 1997 when Bill Clinton chose a replacement for the Secretary of State. From 1999–2001, Holbrooke served as U.S. Ambassador to the United Nations.He was an advisor to the Presidential campaign of Senator John Kerry in 2004. Holbrooke then joined the Presidential campaign of Senator Hillary Rodham Clinton and became a top foreign policy adviser; Holbrooke was considered a candidate for Secretary of State in a Clinton or Obama administration.On January 22, 2009, Holbrooke was appointed as a special adviser on Pakistan and Afghanistan, working under President Barack Obama and Secretary of State Hillary Clinton…Wall Street years (1981–1993)In January 1981, Holbrooke left government and became both senior advisor to Lehman Brothers and vice president of Public Strategies, a Washington, D.C.-based consulting firm, which he formed with a former top aide to Walter Mondale, James A. Johnson. From 1985 until 1993, he served as managing director of Lehman Brothers… In 1988 he served as a top policy adviser to then-Senator Al Gore (D-TN) during his campaign for the Democratic presidential nomination. And four years later he advised another southern governor, Bill Clinton, in his quest for the White House.Holbrooke also remained deeply engaged in prominent foreign policy issues.He visited Bosnia twice in 1992 as a private citizen and a member of the board of Refugees International, witnessing firsthand the damage and devastating human costs of the conflict. This experience committed Holbrooke to pursuing a more aggressive policy in Balkans…http://en.wikipedia.org/wiki/Richard_Holbrooke

FOREIGN POLICY EXPERTS-WHAT’S GOING ON HERE?So this is how Obama intends to conduct foreign policy?; when did we go to war with Pakistan; why isn’t this being explained to the American people? Is Obama making these decisions or is someone else?

pjb,.and happy old year 2. or unhappy old year collides with happy new year.which indicates we have past present and future issues to sort out withregard to our inclinations to apply sentimental adjectives.as the future hinges on the present which we define in relation to amysterious and murky story of the past.like in standard medicine when you have a symptom and go to the dr., or not,but if you do they try to diagnose to fashion a remedy. some guess work in a white coat going on and time passes and then say, the symptoms disappear.then…. then .. even if no rational relationship exists to explain the events,the mystery is moot and the world moves on. that would be a good result with a healthy system. so..anyway..happy new year to you too.

g,programed by the fed. bosses. when you have one skill left you mustuse that to survive. so the us has military capacity and debt. problem.it is those unspoken, dormant capacities that need be employed.

But what would regaining industrial capacity really mean? I’m not meaning to be flip here, I believe it’s a very significant question.Suppose that the US made ALL (for the entire world) airplanes in the US. Look around at the decline in fossil fuels (as well as the collapsing world economy) and ask what kind of continued demand there could possibly be. Was it Mulally or McNerney who not too long ago (last year? year before?) said that 2008 or 2009 would be the peak in airplane production.We’re trying to hang on to old sentiments here. I’d offer that perhaps it’s better that the US isn’t the world’s leader in a lot of production. Being stuck on a particular market is a sure dead end… and especially one that’s horribly unsustainable!Mark

Like what, a bunch of Hummers?We’re transitioning to a new world. No, not a One World Government, but one in where the importance is one of more fundamental cultural meaning.Perhaps the rich elite think that they can swoop in and buy stuff up, but this does no good if no one can then in turn buy it from them! If that’s what they think then perhaps there’s hope for the future after all: it’ll mean that their screwed up genes will die out due to utterly missing the boat.Mark

I wonder a lot when the equity markets will quit their “Obama Honeymoon” as I call it. Basically, I think the markets are completely over valued, and have been staying relatively elevated as of late, due to the new presidency. This will be, and is coming to a quick end soon. Fundamentally, if we’re going into what I describe as “The Greater Depression,” then the average PE in the USA should not be anywhere near the historic PE ratio of 11 to 14, nope, it should be in-line with historic lows, a PE ratio of approximately 5 to 7. If PEs reached historic lows (before we factor in some more EPS deterioration) then the the US equities markets will have to depreciate another 50%, that’s right, another 50% from their current levels. If EPS decline some more, and they will I believe, then the markets will have to drop further.Andrew G. Bernhardt, St. Louis, MO.http://www.google.com/search?hl=&q=+site:www.rgemonitor.com+Bernhardt,+RGE

Well, I think BoA knowing that they’d never actually have to come up with the money themselves (rather that it would be stuck to the taxpayers) was an even shrewder move.

U.N. crime chief says drug money flowed into bankshttp://www.iht.com/bin/printfriendly.php?id=19658417ReutersSunday, January 25, 2009VIENNA: The United Nations’ crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.”In many instances, drug money is currently the only liquid investment capital,” Costa was quoted as saying by Profil.”In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.”The United Nations Office on Drugs and Crime had found evidence that “interbank loans were funded by money that originated from drug trade and other illegal activities,” Costa was quoted as saying. There were “signs that some banks were rescued in that way.”Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved. He only said Austria was not on top of his list, Profil said.(Reporting by Boris Groendahl; Editing by Charles Dick)

It is not on autopilot at all. The frontier territories of Pakistan is where al Qaeda is. It is where the people destabilizing Afghanistan are. It is where Bush should have been focusing since 9/11, not Iraq, which was contained and not a threat to us or even its neighbors. Bush made a Hail Mary attempt to kill Osama Bin Laden by UAVs in the last few months in office but he failed. This is the correct policy.Also, Bush has been giving gobs of money to Pakistan’s military unconditionally. Obama is making the money conditional on Pakistan going after their extremists and redirecting the money to more civilian uses.

j,but the money has to get in the hands of the spender for inflation to takehold and that is not likely to happen too soon. for all the reasons out there.

Jason,Can the banks create more money? Remember that they do this through the creation of debt instruments.Under the new reality, unless they can get the government to actually take their new toxic loans at face value plus a service fee so they can make a profit making bad loans, they have to actually qualify new borrowers. As far as I can tell, they are doing this. I don’t actually hear or see any stats that suggest that a person or a business that has a good balance sheet is getting turned away. Only people and businesses that have little hope of making their payments.This more than suggests that at this point in time, there aren’t enough qualified borrowers out there to expand lending and fix the banks profit structure.I see a lot of rhetoric that loans aren’t available but in the real estate business, people are still getting loans and many of them are pretty much 100%. Interest rates are historically low still.Pfizer is obviously able to raise capital to purchase Wyeth. So there is credit available for those who have good balance sheets and good businesses.But foreclosures and defaults are still rising and this has now moved into the CRE area. The government IS issuing a large amount of paper. Money supply appears to be growing but is it? If all that money isn’t going into new lending then it is going to support the income lost from defaults which isn’t enough as bank balance sheets keep getting worse.On top of this, the government isn’t just granting this capital, on paper it is lending it to the banks. At some point, the banks have to pay it back or go into default. Which is what happens when they have to go back to the FED/Treasury for more and more capital.So in effect, so far, most of the money injected into the banking system is not going into expanding lending but just to prop up losses. Maybe some actually goes to new deals but the new deals are much fewer than the collapsing debt. Losses are when someone buys something for $100 and finds out it is only worth $50. You have lost $50. So if you need operating capital, you use that $50 asset to back a new loan and you send that to your creditors so you are not forced into bankruptcy court. Worst that this in real time because the banks used leverage. They need that asset to be worth $98 as they have payments on that $98 because they borrowed it in the first place.All this is in the hope that some time in the future, your income increases, you can pay off the loan on the $50 you borrowed and that asset will be worth its original $100 plus the interest on it and the interest on the $50 you borrowed against its supposed income.All the while, other assets you hold are defaulting and the entire portfolio of assets is becoming less and less valuable. So you take some more and hock them for enough income to pay your own bills…The government is supplying all this capital by borrowing from our future. This is all done in the hope that someday all these assets will be going back up in value…. YET the income of the host is declining and has been for years…Your assumption is that we can borrow our way to prosperity. Which is possible, IF that borrowing was done ONLY for productive outcomes. Inflation is not a productive outcome as far as I know. School me.I really think this is waaaaay beyond refinance and consolidate. It looks to me that we have entered into a deflationary environment. When you are in a hole, the first rule is stop digging! That means, stop adding debt to an overly indebted system.

Read yesterday’s piece in the New York Times on the vicious reign of terror undertaken by the Taliban in the Swat Valley of Pakistan, about 100 miles from the capital of Islamabad. They are using vicious tactics including numerous beheadings to take control of the Valley and terroize its residents, often broadcasting in advance over the radio whose body will next be dumped in one of the Valley’s commercial squares. The Swat Valley is not your typical lawless frontier. It is very much different from the rugged and lawless Northwest provinces and the Taliban have a stranglehold on the Valley within an hour and a half drive of the capital.

And the hole gets deeper and deeper. They already had to bring in lights because the visibility (transparency) is so poor.I guess they have decided that they are just mining. Problem is that there are no economically valuable resources where they are digging…When the hole gets to deep to effectively get in air & equipment or they have a cave in, they will stop. Maybe this is really the journey to the center of the earth or its the new freeway to China, through the center?It is just to bad they have the ability to force us into laboring to pay for their stupid waste of resources, digging the hole deeper.

china should join nato.

You mean I should believe the New York Times, the way I should believe the NYTimes’ accounts regarding the Palestinians, the Iraqis, the Iranians, the Syrians, the Lebanese, the Afghans, the Russians, Georgians, Bosnia – or for that matter, the Holodomor (death by starvation) when millions (some say 10 million) died as the part of the Soviet famine of 1932-1933 that took place in Ukraine, deliberately starved to death by the food requisition actions carried out by Soviet authorities? The NY Times supported that, too. And its 1930s New York Times reporter Walter Duranty won a Pulitzer Prize for whitewashing Stalin’s reign of terror in Russia — for his hundreds of articles drawing a picture of the Soviet Union as paradise on earth under Stalinist terror, including life under the Holodomor.You believe the NYTimes: I’ve other things to do, and so do any other Americans who don’t want to go up in one huge conflagation.As Alexander Cockburn had to say over the weekend on Counterpunch:Responsibility begins at home, right there in the White House. So let’s hope Obama launches the new era by accepting a fair measure of responsibility on America’s part for the slaughter of some 1,300 Palestinians in Gaza, a large number of them women and children, killed by U.S. weaponry furnished to Israel along with moral and political support for its criminal actions. It’s true that in his first days he called for Israel to let supplies into Gaza. True also that he said he regretted the lost of Palestinian and Israeli lives. But at the same time he called for the disarming and neutralization of the Palestinians’ democratically elected government, Hamas. How would he like it if other governments in the world insisted on continuing to deal with Bush and Cheney? He invoked the utterly discredited Palestinian Authority as the appropriate negotiating partner. George Mitchell, his designated problem-solver in this region, will have to do a lot better. Which means Secretary of State Clinton and President Obama will have to allow him to do a lot better.Obama offered a mild version of blood-sweat-and-tears. “We understand that greatness is never a given,” he said. “It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted – for those who prefer leisure over work, or seek only the pleasures of riches and fame.” I hope we don’t get too much sermonizing about seeking the pleasures of riches. The word “responsibility” from those set in authority over us usually means compulsory belt tightening and onslaughts on Social Security and Medicare, which Obama more or less promised the Washington Post five days before the Inauguration that he is eager to undertake.http://www.counterpunch.org/

They need to blow up more things in the middle east so they can rebuild them: I know that’s sick, but just wait and see!

You should see the photo-radar explosion down here in Phoenix. Another desperation play for more revenue.

奧巴馬經濟團隊成員私下倡議將美國金融體系國有化【00:16】2009年01月27日【on.cc專訊】 華府早前多次救巿失靈，反映金融業危機儼如無底深潭，《紐約時報》報道，奧巴馬的經濟團隊有成員私下倡議，將美國金融體系國有化，藉此結束是次金融危機。報道指，儘管奧巴馬的幕僚對「國有化」兩字絕口不提，但現時華府已為兩大銀行美銀及花旗的最大股東，並且為大筆不良資產潛在虧損「包底」，已是有實無名的國有化。有分析員指，兩行被全面國有化的可能性，較數月前大大增加。若果消息證實 恐怕金融股又再恐慌拋售

e, you wrote

Under the new reality, unless they can get the government to actually take their new toxic loans at face value plus a service fee so they can make a profit making bad loans, they have to actually qualify new borrowers. As far as I can tell, they are doing this. I don’t actually hear or see any stats that suggest that a person or a business that has a good balance sheet is getting turned away. Only people and businesses that have little hope of making their payments.

I am assuming you mean the new reality created because of the almost-overnight disappearance of the shadow banking system entities who backstopped the bad loans. But the Fed of course is now trying to step in with some of its new alphabet soup program to purchase securities for mortgages, unsecured loans, credit cards, etc. You say the government will not take toxic loans. Won’t they face pressure to do so? After, we are all just victims of this credit crisis caused by the greedy bankers and their shady loan practices, right? Its not inconceivable that our government, in order to keep their Great Credit Shaft going, will resort to relaxing their standards, thereby encouraging the very same loan practices that they are blaming for victimizing the populace as the way ‘out’ of the crisis. But of course it will be cached in terms of ‘compassion’ and ‘understandable’ in the current ‘emergency’.

The inflection point for the Banks has come. The Obama Administration and the public is busy analyzing the Stimulus Package and rightfully so. However the details on the remaining TARP 350 and the Aggregator Bank Idea are not being fleshed out. The financials flew on Pelosi’s comments that Nationalization Of Banks is not in the cards. Summers and company are all floating trial balloons on the expansion of the TARP, which I believe will eventually be a trillion dollars more. I think they are going to use the confusion on multiple issues being dealt by Congressto set up a purchase of the Troubled Assets at above market price that will allow the Banks to burden the Taxpayers with all their true toxics, and come out fresh. With a trillion dollar TARP they can use the Fed balance sheet to leverage the purchase of tons of Troubled Assets in all categories. I am not seeing any discussion of the details of the aggregator bank.I am not seeing discussion of the auction process.I am not seeing any details. I am afraid we will all be analyzing the Stimulus Package and they will sneaka MONSTER TARP by us!

http://www.fxstreet.com/fundamental/analysis-reports/daily-global-commentary/2009-01-25.htmlEscellent discussion of the Aggregator Bank issues!Northern Trust Economic Research Team!If they mark those assets to myth, it will be thegreatest heist in history! My problem is that I haveno doubt that they will be laughing at us in Davos!”How many americans does it take to screw on a light bulb?

It ends in catastrophe.

that’s not a coherent plan; it’s called “throwing spaghetti at the wall”. If he’s lucky, enough will stick that people won’t riot. If he’s not, then all’s fair in love and war.

Excerpt from Ron Jacobss: Obama’s Pentagon:Bowing to the Masters of War?As for Afghanistan, the seven years of US war and occupation of that land has done nothing but further destroy that broken nation’s infrastructure, increase support for the Taliban, enhance the production of opium, and stifle the nascent movement for better treatment of women and children. That’s just the obvious failures of this ill-informed mission. There was never a good reason to invade that country in the first place. The motivation for the original attacks was revenge, plain and simple. There was little or no connection between the thousands of Afghan civilians killed since that first attack and the forces that killed thousands in New York and Virginia, but the people in Washington wanted blood so they went after Afghanistan. There is no reason to continue the killing. It is time to stop. Washington can trade partners and install a new regime that won’t criticize US air raids, but it can not change the fact that its battle in Afghanistan will drain the swagger from the US empire just as it has done to the Soviet and the British empires before it.There are at least two antiwar protests coming up in spring 2009. If Barack Obama is not taking the path towards peace that he was elected to take by then, it is essential that those who voted for him with the understanding that US troops would be leaving Iraq (and not going to Afghanistan) attend at least one of these protests. That is what democracy really means.Ron Jacobs is author of The Way the Wind Blew: a history of the Weather Underground.http://www.counterpunch.org/jacobs01232009.html

Charley Blaine and Elizabeth Strott : Bad news for employees means good news for stocks today.Home DepotHome Depot this morning announced plans to eliminate 7,000 jobs — about 2% of the company’s overall work force — as it struggles to deal with the slumping housing market and the recession.Home Depot will record a $532 million pre-tax charge because of the job cuts; $390 million will be recorded in the fourth quarter. The company will also exit its design- and-décor-focused Expo stores.”Exiting our Expo business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers,” Chairman and Chief Executive Frank Blake said in a statement.Sprint[T]he telecommunications company said it will cut 8,000 jobs as it deals with the recession.Caterpillar”We expect 2009 will be the weakest year for economic growth in the postwar period,” the company said in a statement.The world’s largest maker of mining and construction equipment, Caterpillar had a backlog of orders going into January 2008. Many of Caterpillar’s orders were canceled, as tight credit restricted access to cash among the company’s customers.Caterpillar also announced plans to eliminate 20,000 jobs.http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-012609.aspxMy prediction: the Market will close down today.

more on Trade – courtesy NCAmerican exporters in last-ditch attempt to stop Obama raising the trade barriers

A coalition of leading American exporters, including Boeing, Caterpillar and General Electric, is trying to stop a “Buy America” clause being included in President Obama’s $825 billion stimulus package.The American Steel First Act would ensure that only US-made steel was used in $64 billion of federally funded infrastructure projects.The money, earmarked for roads, bridges and waterways, is aimed at kickstarting the economy, but the initiative by steelmakers, which secured support last week in the House of Representatives Appropriations Committee, is opposed by American exporters, who fear retaliation by foreign governments.Their concern is given credence by the European Commission and by Eurofer, the association of European steelmakers, which said that it would urge the European Union to challenge the “Buy America” clause at the World Trade Organisation.

http://business.timesonline.co.uk/tol/business/industry_sectors/industrials/article5587443.ece

Isn’t globalization wonderful! I guess when you have too many hands in your pocket, there’s never enough CHANGE (double entendre) to go around!

I think what we need is for people – who still think there is any possibility that an American President is going to do any such thing as be open and honest with us – to catch up with a million realities that say it isn’t going to happen except for maybe in your dreams.

NEW THREAD

I subscribed out of interest and find that they do not document their theses with data very well. However, I believe they are making some pretty good educated guesses and they have a refreshing(for me) European perspective. Bottom line- it is interesting food for thought and not much more.

There is a New Thread -

Guest,Thank you very much for the comment.

such beautiful writing

g,yes and no. it’s the periodic table of elements in some digitized Asiandialect. mysterious yet common. the proper word escapes me.

OK, So it is time to move into the world of post-banking … the mother of all disintermediation, where governments give and take money directly from the people (real or legal persons, that is).

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