Hey, I’m first!

Not getting enough stimulusKink.com, a San Francisco porn studio has laid off (no pun intended) 10% of its work force.

Re: “Goldman Sachs got about $25 of ” and “he $162 bailout of AIG”Wish that weren’t a typo – if only it was only about $187, then we’d be in fine shape .

The NYT editors didn’t get their stingy hands on it this time !

You think that you have troubles now…..wait until the Chinese start their demands for us to pay back what we borrowed. Like night follows day, its coming folks.Feb. 11 (Bloomberg) — China should seek guarantees that its $682 billion holdings of U.S. government debt won’t be eroded by “reckless policies,” said Yu Yongding, a former adviser to the central bank.The U.S. “should make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way,” Yu, who now heads the World Economics and Politics Institute at the Chinese Academy of Social Sciences, said in response to e-mailed questions yesterday from Beijing. He declined to elaborate on the assurances needed by China, the biggest foreign holder of U.S. government debt.

talking about typos…..when GM lost 239 Million 2-3 years ago, we were mortifiednOw everyone is loosing 1-10 billionsand AIG…..ah well, it only lost close to one tenth 1/10 of a trillion.that can’t be as much as 239 million.get my drift?239 is more than 1-10 which is more than 1/10th.the Gov’t is playing with us

Small businesses that America may not see the likes of again for many years are being brought to their knees. A unique one-store retailer that has preceded and complemented the likes of Home Depot and Orchard these many years in my metropolitan area, has just let go 30 members of its small workforce — professions all in doors, windows, hardwood flooring, trim, woodworking, cabinets and cabinet doors, handles, exotic hard to find woods — all catering with professional advice to the wood worker, the cabinet maker, the artist, the builder and the homeowner.This is America dropping through the cracks, and what will be left? One large, one-size-fits-all nationwide super mall! In the meantime, giants like Costco and Home Depot who are funded by the bankers can close stores, lay off employees until the downturn is over, keeping their executives and business plans intact. They’ll then be at an advantage if a “recovery” should come, because more small business competitors than ever will be gone.

There you have it, the good professor will eventually declare that we’ll have an L shaped depression instead of his 2 year recession.

MCD is trying to go green… if you want to see where it will end up check PG and JNJ the other two stalwarts charts who have rolled over and are on their way to where they belong…eventually – MCD will roll over – it can’t so far today because we would be near crashing – see how it works. it is so f ing obvious. who is the invisible buyer – gee i don’t know who could it be? so the rotation of taking everything down has hit JNJ and PG it took a little while so there could be a somewhat the orderly DOW average descent.MCD will eventually be rotated down. Short any and all rallies… It will normalize and it is so completely off on its value compared to where this market has gone. good job holding it up today so far little PPT worker bees.at the 2003 lows MCD was 12 or 13 bucks. 500 or so points lower in the DOW today MCD is 300% or so higher – purely due to such great conditions for equities yah?they lose MCD and we will crash appropriately and historically in the DOWtick tock tick tock tick tock

It’s long…but Paul Craig Roberts’ latest piece dots the i’s and crosses the t’s on the death star that’s known as “The Obama Budget.” It’s a smorgasbord of punishments, irresponsibilities and land mines. Read ‘em and weep._____________a banana republic by 2012?CHANGE FOR THE WORSE by Paul Craig RobertsMarch 1, 2009 — President Obama has presented the most irresponsible budget in US history. His fiscal year 2010 budget projects federal spending of $3.5 trillion and a federal deficit of $1.75 trillion. In other words, 50 percent of the government’s budget consists of red ink.And Americans are angry that sub-prime borrowers took mortgages they couldn’t afford.The bald fact is that the US government is going to have to borrow–or print–half of the money it intends to spend in Obama’s first budget. This fact has fallen through the cracks as New York Times headlines proclaim “A Bold Plan Sweeps Away Reagan Ideas.” It certainly does sweep away Reagan ideas. No Reagan budget ever presumed that the federal government could borrow half of its annual expenditures. Indeed, Obama’s budget deficit for 2010 alone exceeds the totality of “Reagan Deficits” for Reagan’s two terms of office.As presidential budgets are marketing devices rather than financial statements, they are imbued with optimistic assumptions. Obama’s budget is based on optimistic assumptions about the extent of decline in GDP. A more realistic projection of GDP decline would reveal that Obama’s budget is the first since World War II in which more than half of the government’s expenditures must be financed by red ink. I suspect that the red ink component of the FY 2010 budget will surpass World War II budgets.To whom can the US government turn for $1.75 trillion for FY 2010, on top of $1.2 trillion for FY 2009?Not to taxpayers. Obama’s net tax increase comes to $170 billion over 10 years, or $17 billion a year, a drop in the bucket. A supply-side economist could have told him that not even these paltry revenues will be realized.Not to private savers. Americans are over their heads in debts.Not to foreigners. Thanks to Clinton/Bush financial deregulation and Wall Street and bankster greed, the rest of the world is in financial turmoil and hasn’t $1.75 trillion in savings to lend. Possibly, the stock market will collapse further, and whatever remaining wealth Americans have will flow into “safe” US Treasuries.The only other alternative is the printing press. Printing press finance would destroy the dollar as reserve currency and ignite high inflation. The US would be unable to pay for its imports, and Americans whose incomes do not rise with the rate of inflation would be plowed under.This prospect is not a “war on terror” scare tactic like “anthrax,” “weapons of mass destruction,” “al Qaeda connections,” and “Iranian nukes.”The economic catastrophe that the US faces is very real. But there is no awareness of this reality in Obama’s budget. The crux of Obamanomics is the assumption that the economy can run forever on consumer loans, if we can just get the banks to lend, and the federal government can run forever on loans from China, Japan,and Saudi Arabia.Obama is requesting $130 billion for wars in Iraq and Afghanistan during 2010 plus a $75 billion supplemental request for the wars during 2009. This $205 billion is on top of $534 billion for the Pentagon in 2010, for total military spending of $739 billion.The Chinese government’s budget shows China’s military spending at $59 billion in 2008. (The Pentagon claims Chinese military spending is between $97 billion and $139 billion.) Russia’s military spending in 2009 is projected to be about $50 billion.In the midst of the greatest economic crisis in US history when trillions of dollars are being added to US national debt, Obama’s budget spends more on two pointless wars than the total military spending of China and Russia combined. Obama’s wars serve only the profits of the military/security complex and the promotion rate of military officers. The longer the wars continue, the larger the number of officers who can retire at higher ranks, thus further swelling future annual deficits and the national debt.Moreover, as is becoming apparent, the Bush/Obama war in Afghanistan cannot be fought without fighting a war in Pakistan.As if this isn’t enough war, Obama parrots Dick Cheney’s charge, totally unsupported by any evidence, that Iran is making nuclear weapons. The chances are high that the new White House Moron will have us at war in Afghanistan, Pakistan, Iran, and Iraq. As Obama’s wars expand, the $205 billion for war in Iraq and Afghanistan will become $400 billion annually and then $600 billion annually.Obama’s “troop withdrawal” from Iraq has proved to be just another con job. Obama has announced that the withdrawal doesn’t include the 50,000 US soldiers who will remain in Iraq indefinitely–like the US troops that have been kept in Japan and Germany for 64 years and in Korea since the early 1950s.Meanwhile Medicare is on the ropes. The latest Medicare trustees report says that Medicare’s funds for hospital payments will be exhausted in 10 years. To make ends meet, Obama proposes cutting payments to Medicare providers.Obama’s plan is to make doctors and patients pay for Medicare. One way to get National Health is to make it uneconomic for private health care to service Medicare patients. Already many doctors will not accept Medicare patients because of the low payments, endless paperwork, and risk of prosecution for “over-billing.” Looking at one recent Medicare patient medical bill, Medicare and supplemental insurance paid 29 percent of the billed amount, requiring the doctor to eat 58.5 percent of his charges and the patient to pay 12.5 percent. The doctor was paid $93.16 on a $320.89 bill. And Obama wants to reduce payments to providers?What is Obama thinking? A country that can’t afford Medicare can’t afford National Health. Medicare provides only for the elderly, and it provides very little. A person pays the Medicare tax as long as he earns and on the totality of earnings. For the rich the Medicare tax can exceed the cost of a gold-plated private insurance policy.Basic Medicare leaves a person unprotected. To provide better coverage, it is necessary to enroll in Medicare Part B for which the premium is $308.30 per month or $3,699.60 per year. On top of this, a person needs a privately supplied supplemental policy to complete Medicare coverage. AARP’s policy, which, after deductibles are met, covers half of drug costs, cost the “Medicare protected” elderly $273.50 per month or $3,282 per year. The drug prescription plan passed by Congress costs the individual yet more.The two supplements to Medicare cost the Medicare patient $6,981.60 per year. In addition, if the Medicare patient has much retirement income besides Social Security, he pays income tax on 85% of the $3,699.60 Medicare Part B premium as it is part of taxable Social Security, which for someone in the 25% bracket is another $925 dollars.In the late 1970s, Democratic Senator Russell Long, Chairman of the Senate Finance Committee, told me that as Social Security was collected as a tax on wages and salaries, the US government had promised never to tax the benefits. So much for any commitment that the US government makes to the American people.A top Social Security income, net of Medicare Part B premium, is $23,220 per year. Deduct the AARP policy, and the elderly who have paid in maximum Social Security taxes, get $20,000 per year. Of course, few Social Security retirees receive the maximum payment. AARP’s Public Policy Institute reports that in 2006 the average annual Social Security benefit for a retired worker was $12,372. Such a worker would have little left after paying the Medicare Part B premium and an additional premium for a supplement.Offshoring and “free trade” have destroyed employer-provided health coverage for millions of employees. Private health care coverage can cost as much as one-third and even one-half of a person’s earned income, and some people are not insurable. National Health seems to be in the cards–only there is no money for it. All the money is being spent in pointless wars and on bailouts of financial fraud. The Obama budget puts bankster bailouts and pointless wars ahead of the health of the American people.National Health advocates emphasize that a single-payer system is less expensive because it eliminates layers of profits. It is also less expensive for a less promising reason. Unless there is a parallel private health care system, National Health systems limit health spending to what is provided in the government budget. Over time, health care has to compete with everything else in the budget. Every part of the budget has its partisans and special interests. It is fantasy to assume that National Health will always be well funded. Just look at the state of the National Health Service in the UK.Obama’s plan to tax the rich is another con job. Obama’s budget defines the rich as a person with a $250,000 before tax income. This is a rotten joke. The rich are the banksters, such as Hank Paulson with his $160 million annual bonus, and heads of hedge funds with their $1,000 million annual incomes. To confuse the struggling middle class with the real rich is criminal. A person with a $250,000 income before tax does not come close to being rich. Obama’s “tax the rich” scheme will devastate the upper middle class and leave the super rich undamaged.The only change we have from Obama and the Democrats is for the worse. Bush’s FY 2008 budget deficit was $450 billion. The FY 2009 deficit is projected at $1.2 trillion. The budget deficit in Obama’s first budget is $1.75 trillion, a fourfold increase in two years.Obama’s projected budget deficits are an understatement. For example, Obama’s budget assumes a less steep economic decline than the economy is experiencing, and it projects that war costs will drop to $50 billion annually beginning in 2011–this despite Obama sending more troops to Afghanistan and recent congressional testimony of Lt. General David Barno, former head of US forces in Afghanistan, who said the war in Afghanistan could last until 2025.The “war on terror” will never end, because the moronic US government has defined everyone who resists US hegemony as a “terrorist.” The great danger to American civil liberty is that the US government regards as terrorists American citizens who realize that the neoconservative dream of American hegemony is a fantasy. As the Obama regime has not repealed the Bush regime rule– “you are with us or against us”–Americans who oppose hegemonic war are lumped into the “against us” category.There seems little chance that civil liberties will be restored. Obama and his “liberal” Justice (sic) Department have sided with Bush/Cheney on every important civil liberties issue. Yet, the ACLU sees “hope” in Obama’s rhetoric!On February 21 Yahoo News reported: “President Barack Obama’s administration has sided with predecessor George W. Bush on the rights of detainees at Bagram air base in Afghanistan, saying they cannot challenge their detention in US courts. In a two-sentence court filing Friday, the US Justice Department said “the government adheres to its previously articulated position” of denying habeas corpus rights to Bagram detainees, backing a similar decision by the Bush administration.”"Earlier this month,” Yahoo News reports, “the Obama administration backed another Bush anti-terror policy when it urged a federal court to dismiss a lawsuit accusing Boeing Company of helping fly suspects to secret CIA detention centers overseas. The Justice Department said the case should be thrown out to protect state secrets.”Do you remember the illegal spying? The US telecom industry succumbed to Bush regime pressure and broke the law together with President Bush. The illegal act made the US telecom industry subject to lawsuits, but the Bush regime placed its co-conspirators above the law.Now Obama has sided with the Bush regime. On February 26, therawstory.com reported: “The Obama Justice Department continues to stand behind a Bush era law meant to prevent lawsuits against telecommunications companies accused of illegally sharing private customer information with intelligence agencies. In a brief filed late Wednesday obtained by Raw Story, the Department of Justice provided its views to Chief U.S. District Judge Vaughn Walker, after the San Francisco federal judge questioned the constitutionality of the wide-sweeping law and whether it gives the U.S. Attorney General too much power in deciding whether a company is immune from lawsuits after it has shared information with federal agents.”On February 26 antiwar.com reported that the “new CIA director (Leon Panetta) declares nothing has changed, nothing will change.” Panetta declared that the US policy of conducting war on Pakistan’s sovereign territory “would continue.” The attacks, Panetta claimed, “have been successful.” For the CIA, claims of success equal legality. Did the Bush regime ever express greater arrogance and hubris?With Rahm Israel Emanuel, an Israeli dual citizen, in charge of the White House and Obama’s schedule, Obama will have an even less independent foreign policy in the Middle East than Bush. Somehow someone among the Obamacons managed to put forward an appointment that could challenge the Israel Lobby’s stranglehold. Charles Freeman, former US ambassador to Saudi Arabia, former top Pentagon official, and president of the Middle East Policy Council, was chosen by Admiral Denis Blair, Director of National Intelligence, to head the National Intelligence Council.The neocons went berserk. Steve Rosen, formerly of AIPAC, currently indicted as an Israeli spy, Gabriel Schoenfeld, who wants the New York Times indicted for allegedly violating the Espionage Act for reporting the Bush regime’s illegal spying, Daniel Pipes, who sees Muslim terrorists under every bed, Michael Rubin of the warmonger American Enterprise Institute, and Frank Gaffney, possibly the goofiest person in America, damned Freeman’s appointment as “deeply troubling,” because Freeman has an open mind on the Middle East situation.In other words, if you are not on Israel’s side, you are disqualified.There is no more certain indication of continuing war in the Middle East on Israel’s behalf than for Freeman’s appointment to be blocked.Pay close attention to this one. If Obama succumbs to the Israel Lobby and nixes Blair’s appointment of Freeman, the US will have to finance interminable wars on top of trillion dollar bailouts and massive unemployment.The US might not even make it to 2012 before it is a banana republic.Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. Author and academician, he also was Associate Editor of the Wall Street Journal.http://www.vdare.com/roberts/090301_change.htm

This just came through this morning on increased FDIC premiums. From Pacific Coast Bankers Bank, and their publication Bank Investors Daily:In 1981, author Harold Kushner wrote a book called,“When Bad Things Happen to Good People.” In it, he ponders why there is so much pain and suffering in the world. Given the most recent action by the FDIC to raise insurance assessments on banks that are already struggling throughout the country (in particular community banks), we have been wondering that ourselves.While we know the FDIC needs to replenish the insurance fund, community bankers have been caught up in the pain caused by the largest national banks, investment banks, hedge funds and others. We are going on record to say it just isn’t fair (we had a few other choice comments, but we leave them to your imagination). Regardless, we believe community bankers will want to know the finer details of this most recent interim ruling in order to better prepare.Special Assessment: The FDIC is imposing a 20bp “emergency special assessment” on 6/30/09 (will be collected 9/30). The rule also gives the FDIC the ability to impose future emergency special assessments of up to 10bp if necessary.Timing Change: The FDIC extended the timeline to restore the fund to 1.15% (currently 0.40%) from 5Ys to 7Ys. This was done in recognition that the industry is under significant strain, the economy is in a deep recession. The industry can handle only so large an assessment at this time.New Assessment Rates: Assessment rates have been adjusted to differentiate for risk. Currently, most banks are in the best risk category and pay from 12 to 14 cents per $100 of deposits.Under the new rule, banks in this top tier will pay a base rate of 12 to 16 cents per $100(annualized, beginning 4/1/09).TLGP: The FDIC also modified the Temporary Liquidity Guarantee Program to allow participating institutions to issue convertible debt (with FDIC permission). The change is designed to help banks raise capital and reduce the large amount of TLGP debt maturing in mid-2012.Fee Grid: Here is the assessment grid (fees indicated are the maximum possible by category in basis points):Fee Risk #1 Risk #2 Risk #3 Risk #4Base 16 22 32 45Unsecured Debt (5) (5) (5) (5)Secured Liabils 8 11 16 22.5Brokered CDs 0 10 10 10Total Fees 24 43 58 77.5Fine Print: Banks may also want to hear about some of the changes that were included in the so-called “fine print” and may not have made the major news stories. Banks that rely significantly on secured liabilities (FHLB) and/or brokered deposits will be assessed more. Even well-managed and wellcapitalized banks (if they have had rapid asset growth and rely significantly on brokered deposits) will be assessed more.Community Banks: This pain could not come at a worse time, as many banks are already struggling to remain profitable. It is estimated these changes could eat up an amount equal to 20% to 50% of 2008 earnings for the average community bank.While projected fund losses for the industry now appear to be $80B over the next few years (and the FDIC had little choice but to replenish the fund), this assessment is not welcome. Increased fees of any sort, on an industry that is already greatly strained will only serve to decrease lending, increase layoffs and produce even further contraction. We just wish Treasury had thrown the FDIC a line (like they did with FNMA and FHLMC) and boosted the $30B line of credit that exists today to something more in the $200B range. Bankers don’t mind paying their fair share, but this time around bad things have certainly happened to good people.

Quoting the Quotable Justin Raimondo:Obama’s war is going to be taking place on a much larger, more difficult canvas than that of his predecessor’s, which was confined in large part to Iraq. All of Afghanistan will soon be teeming with newly-arrived US soldiers, sent there – direct from Iraq – to fulfill the President’s pledge to start fighting the “right war” in the right way, a “smart” way. Oh, these guys (and gals) are the Best and the Brightest, aren’t they?The smarty-pants tone and style of this administration is already beginning to grate on my nerves, as they pander to their base on the symbolic issues – like the coffin question – in hopes no one will notice as they backtrack on more important matters. So far, it doesn’t seem to be working out all that well…Yes, but myths die hard. It will take a couple of shiploads of flag-draped coffins – and perhaps a couple of alarming incidents in Afghanistan and environs – to wake up Obama’s liberal supporters to what they’re presently enabling with their silent complicity. In the meantime, the creaking wheels of empire are turning as we gather our forces for another even more perilous mission that will take us straight into the fabled graveyard of would-be world-conquerors otherwise known as Afghanistan. Why? How? To what purpose? A thousand questions raise themselves up, like the first crocuses of spring – but the Obama administration isn’t answering, because no one of any importance is asking. Just little old me – and, maybe you. And maybe Rachel Maddow, now and then: and that’s pretty much it. Surely the alleged “antiwar movement” isn’t interested – they’re too busy hailing Obama’s election…http://antiwar.com/justin/?articleid=14319

here , here !http://www.veteransforpeace.org/.FEBRUARY 27, 2009VETERANS’ GROUP SAYS LEAVING 50,000 TROOPS TO CONTROL IRAQ IS NO “WITHDRAWAL”Veterans For Peace objects to calling President Obama’s announcement on Iraq a “withdrawal,” adding that keeping troops there and Afghanistan will “put the nail in the coffin of America’s economy.”.”I really believe President Obama wants to do good things for the country,” said VFP president, Mike Ferner, “but if he continues on this course he’s charted, his hopes are guaranteed to founder on the shoals of war. This way lies disaster. For all our sakes, I hope he reconsiders.”The 58 year-old former Navy Hospital Corpsman added, “Besides the suffering and death caused by prolonging these wars, America simply can no longer afford the cost of empire. Unfortunately, that’s exactly what these policies do. Their purpose is to control an entire region of the world and its resources. If you look at history, it’s clear the longterm outlook for empires is not very pleasant.”Ferner concluded that “Barack Obama became president in part because millions of voters were sick of these wars and wanted them stopped, period. Saying that only ‘non-combat’ troops will be left after 19 months is just sleight of hand so we can keep tens of thousands of soldiers in Iraq and send thousands more to Afghanistan.”

By the way … you bring up a good point. During recessions one of the tough things is that a lot of great specialty businesses go bankrupt. Suppliers, restaurants, shops. All kinds of unique one-of-a-kind services and products just get eliminated. It’s frustrating to see that kind of talent get lost. This time though … we’re looking at the looming possibility of a new Great Depression. So it’s unlikely that those specialty services and stores will bounce back any time soon. It really does destroy the talent and productivity of a lot of Americans.PeteCA

Why on earth would China demand that? And how, what could they do? The only way their huge holdings of US gov’t debt can retain SOME of their value is if they don’t try to sell them off in significant amounts, thus triggering a freefall in prices. Are they gonna literally come to the US, buy San Francisco or LA and ship them to China?I mean, maybe I’m missing something. I’d be curious to see what other options, beyond angry words, China has. It is in a symbiotic relationship with the US, which means the demise of one automatically triggers the demise of the other…

Obama and his minions are planning something drastic to deal with current economic conditions… he said today he will not a let a catastrophe happen… They are realizing thier game plan is not working… no wonder Giethenr has kept his mouth shut for 19 days… He’s not saying squat until they have a new plan.Bank Holiday coming? as one of the things? Stock market closing as another? What does everyone else think?

The Sunday Times (UK)“Pay freeze looms for millions”March 1, 2009 — MILLIONS of private-sector workers face a pay freeze or cuts because of the economic crisis, while employees in the public sector are enjoying pay rises.With the economy plunging deeper into recession, and inflation likely to drop below 0% into deflation, the CBI has warned that the “overwhelming majority” of its members will freeze wages this year.Tens of thousands of other private-sector workers are also likely to see their earnings slashed. Several professional firms have reduced salaries by 20% by putting employees on a four-day week.A snapshot survey by the British Chambers of Commerce shows that 30% of businesses are planning to cut working hours. David Frost, its director-general, said: “Across the country I am hearing more and more businesses left with no choice but to freeze and cut pay.“It is unacceptable that the public sector should not share any of this pain. There is already an apartheid between the public and private sectors on pensions. We cannot have apartheid on pay too.”Under three-year public-sector pay deals agreed last year, NHS workers will enjoy pay rises of 2%-3% this year and next. Similar deals were awarded to teachers and the police, while local government workers are seeking a 6% pay rise.A spokesman for the Treasury said he was “unaware” of any plans to renegotiate the deals approved for teachers, policemen and NHS staff.The Sunday Times has found that pay freezes are being implemented across industry, hitting professionals and lower-skilled workers, senior executives and junior staff.Falling inflation and rising unemployment have made it easier for firms to impose pay freezes and cuts. Inflation measured by the retail prices index dropped to just 0.1% in January and is set to fall into negative territory when the February figures are released this month.Economists believe that by September Britain will be in the grip of deflation, with overall prices down by between 3% and 4% on a year earlier.Unemployment rose to 1.97m last month, the highest in 12 years. It is expected to reach 3m over the next year.British Airways met unions last week to begin negotiating a freeze for all its 42,000 workers. This week Jaguar Land Rover will vote on whether to accept a year-long freeze and a four-day week.National Express, the transport company, has told its 16,850 staff that their pay will be frozen. Similar measures have been introduced at Tate & Lyle, the sugar company, F&C Asset Management, the fund manager, and for 2,000 head office staff at the Home Retail Group, owner of the Argos chain.Punch Taverns, one of the largest pub groups, has put wages on hold for all workers except pub service staff. Cookson, the ceramics maker, has frozen the wages of about half its 1,300 staff.Top executives at National Grid have agreed to take a pay freeze this year, as have senior executives at the insurer Aviva. It has warned that “overall pay rises across the company will be the lowest in many years”.Mark Wallace, campaign director of the TaxPayers’ Alliance, said: “The government has locked taxpayers into three years of pay rises for millions of public-sector workers while millions of workers in the private sector are facing a pay freeze, cut or even redundancy.“This is not only unfair; it is irresponsible and economically unsustainable.”http://www.timesonline.co.uk/tol/news/uk/article5822223.ece

I for one hated being called a “Consumer” or “Customer” do you think Mr. Peter in the new world chapters that people will be called by their real names rather than a number?

We should stop saying Great Depression… and just say Modern Depression. In essence that is what we are entering. A prolonged recession…which is the definition of depression. So I am advocating the Modern Depression terminology, it won’t be like the Great Depression, it will be much different in modern society than it was then, but it is much worse than a recession.

Prof Roubini, your proposals miss the most important issue – trust:

Massive and more unorthodox monetary policy easing to defrost credit markets even if this may imply central banks widening collateral and taking greater credit risk;Massive and front-loaded fiscal stimulus more on the spending than tax side and with income relief to agents with high marginal propensity to spend (poor, unemployed, state/local governments);

Aren’t we already at the Central Bank’s and Treasury’s breaking point already? Look at the landscape today, with the deficits and the proposed expenditures and bailouts. You want to take even more risk? Wouldn’t we just be guaranteeing a dislocation? Bottom line, who trusts the US or any central bank anymore to do this?

Rapid takeover of insolvent banks – full nationalization – and their quick clean-up and re-privatization;

Close the ones with no hope? Bankruptcy for some? Or is the vision limited to just restoring the status quo? What about the bondholders? You left behind your calls for triage and closing zombie banks months ago – its time to take them up again. Please?

Aggressive credit growth incentive for banks and financial institutions to stop the collective action coordination problem leading them to contract credit to even creditworthy households and firms;Use of proper and constructive credit forbearance (on capital adequacy ratios, on mark-to-market marks, on rating agencies destructive lagged downgrades);Across the board reduction of the face/principal value of mortgage debt and other consumer debt for insolvent households as a case-by-case debt re-stretching of debt will not work;

So you want to tell the banks to lend, while at the same time tell them you are restructuring their past loans, offering forbearance and restructuring, allowing judges to cram down, etc. Changing all the rules. Isn’t this a mixed message – you must lend but we retain the right to change the rules at any time? Do we just tell the banks to start making more and more risky loans, and ask them to trust us?May I offer the following revisions:Immediately set up a national network of community and state banks – the ones with good loans on their books, the ones who know their neighborhoods. The ones who many largely agree we can trust. Link these together using today’s wonderful technology to form a networked ‘bank of last resort’. Send ‘creditworthy’ households and firms to this network. Use proper lending standards.Nationalize the rest. Start closing them and breaking up those too big to fail. Find those who are culpable. Ensure they never have the opportunity to ruin the economy again.Allow a systematic insolvency event to take place after this. Let the existing systems, such as bankruptcy and creditor/bank negotiations, be used to unwind and write off the debt. Unwind CDS and CDOs. As this occurs, funnel stimulus and aid through the ‘good’ banking system to the economy, while the insolvent and the hopeless zombies are euthanized.Begin to educate people about use of credit, living within their means, common sense for the new reality.I don’t see these steps you propose working while the current environment of mistrust continues. Trying to save the system by giving these existing actors endless money to try again will not work. The U.S. taxpayer will revolt, the overseas creditors will revolt. We will be left with dislocation and economic destruction beyond imagination. We need shock therapy, and is starts with going around the ones who no longer engender trust. You cannot have a banking system exist without trust.ex VRWC

Yada yada yada!!!! As usual the thread goes from economic debate to political lambasting. Yeah, yeah, we all know this is all because of Carter, Clinton, and Barack “OMG his middle name really is Hussein (I don’t know what that means but isn’t he an evil dictator)” Obama and those evil Jews. If only we remained intelligent enough to let GDub stay in office indefinitely or somehow pull a lazarus on Reagan all this country’s woes would wane immediately. Whatever! Regardless of political affiliation the ships sinking. While the passengers are busy working to plug the holes like ubiquitous dutch boy images, the captain and crew are busy gathering the passengers possessions and loading them onto the dingies of the ships major investors. All your Dem and Jew bashing isn’t offering solutions. It’s proving you’re completely deplete of ideas.

“A lie can travel half way around the world while the truth is putting on its shoes.” twain…if the the world has more shoeless what does this say about the lie?

Can we put a FREEZE on the decline in the purchasing power of the dollar while we are at it?

we will not see auto sales of 7 million this year…. Wahta re these people drinking? Who in their right mind would believe any anyalyst these days on any data they put out. i understand “it” is to stop panic and serve their own agendas, but i grew up where telling the truth was the right way…GM, Chrysler Sales Drop May Make Recovery ‘Difficult’ (Update2)Email | Print | A A ABy Alex OrtolaniMarch 2 (Bloomberg) — General Motors Corp. and Chrysler LLC, weathering the worst U.S. auto-sales market since the early 1980s’ recession, may find it hard to close enough plants to repay federal loans until demand rebounds.“Absent volume recovery, it is difficult to see how GM –or any U.S. automaker — could cut enough cost in the next year or two to truly be seen as viable,” Christopher Ceraso, a Credit Suisse analyst, wrote in a Feb. 27 report.February sales plunged 50 percent at Chrysler in January from a year earlier, 45 percent at GM, and 42 percent at Ford Motor Co., based on the average estimates of seven analysts surveyed by Bloomberg. Toyota Motor Corp. may report a 37 percent drop, Honda Motor Co. could slip 32 percent, and Nissan Motor Co. may fall 34 percent, according to three analysts.Sales at levels not seen in almost 27 years make it more challenging for GM and Auburn Hills, Michigan-based Chrysler to become profitable and pay back $17.4 billion in U.S. loans. President Barack Obama’s auto task force may approve as much as $21.6 billion more aid for the two automakers and support for the thousands of companies that make auto parts.Automakers may report tomorrow new vehicles sold at a seasonally adjusted annualized rate of 9.5 million units, according to the average estimate of 27 analysts and economists surveyed by Bloomberg. That rate would be the lowest since June 1982, when the U.S. had less than three-fourths as many licensed drivers.Analyst GM Ford Chrysler SAARPatrick Archambault -42% -37% -45% 9.3(Goldman Sachs)Christopher Hopson -43% -42% -49% 9.4(IHS Global Insight)Brian Johnson -44% -48% -55% 8.9(Barclays Capital)Richard Kwas -38% -41% -46% 9.5(Wachovia)Rod Lache N/A N/A N/A 9.3(Deutsche Bank AG)Erich Merkle -50% -41% -51% 9.2(Independent auto analyst)Itay Michaeli N/A N/A N/A 9.6(Citigroup)John Sousanis -49% -42% -54% 9.1(Ward’s Automotive)Jesse Toprak -46% -48% -53% 9.3(Edmunds.com)Jeff Schuster N/A N/A N/A 9.1(J.D. Power)AVERAGE: -45% -43% -50% 9.3

Investment isn’t in our future, sad to say…The Investment DelusionMark

You have a good term for what is going on now. The landscape in which we live just does not match the imagery from the Great Depression.

I’d like to know this as well.

and guns – I have been selling some of mine off and the avg sales time online is about 20 minutes (yes it is legal here in UT). A helluva time to be overstocked on guns and even better, ammo. That is no joke post either.

pjb,i suggest for the sake of “stability”, read resonance, this opinion piece be consideredas the time has come..Letter: U.S. must end its aid for Israeli occupationby Arnold E. Stieber | Grass LakeMonday January 19, 2009, 3:16 PMWe find the action of our government, supporting Israel’s right to defend itself, both ignorant and myopic. All people have the right to defend themselves. By focusing only on Israel, our government is implying that the people of Palestine have no right to defend themselves from the 60 years of occupation and massive violence by the world’s sixth most destructive military – Israel.Veterans For Peace is a national organization founded in 1985. One of our tenets is to restrain our government from intervening, overtly and covertly, in the internal affairs of other nations.Since the United States is the largest single source of governmental and non-governmental financial assistance to Israel, Veterans For Peace has taken a stand against the actions of the government of Israel.At our national conventions since 2002, we have called for ending all economic and military aid to the state of Israel and for boycotts, divestment and other actions against economic activities that support Israel’s continued occupation and colonization of Palestinian lands and the denial of fundamental human rights to Palestinians. We have called for these actions to continue until the following conditions are met: 1. The withdrawal of all Israeli presence to the 1967 boundaries defined by U.N. Resolution 242. 2. Full U.N. statehood for the nation of Palestine 3. Aid and assistance for the state of Palestine to survive and prosper 4. Israel complies with international law and the universal principles of human rights. For more information see http://VeteransForPeace.org.

Dr. Roubini writes:So without a recovery in the US and global economy there cannot be a sustainable recovery of Chinese growth.Again, for the umpteenth time, how the heck can we achieve sustained growth on a finite planet? This, my friends, is the end game for which all of this is predicated, and it’s why ALL “solutions” WILL fail!Mark

I don’t take anyone for fool under normal circumstances. However, your reply seems to be quite abnormal.

Great quote.

m,hold on with the tribulation. what happened tothe Trials?as for the “economy” failing. the first implicationis millions of people will have much more timeon their hands and less money to do it with.this is a great opportunity for the intellectual inclined to grow. learn.i would think that many of the newly unemployednaturally, the unemployed, will organize.?becoming politically significant perhaps for thefirst time in the life of the “global” economy.global finance sees this as tribulation. not me.labor being the natural punching bag of finance.so it is all about water, food, energy. as has beenmentioned before by others.direction. redirection. first. thinking.then we can go to tribulation if we become/remainignorant.??ps. someone said to me “this is a great time tobe poor.” as, they-we?, haven’t lost a thing?really. and neither have all those of the6 trillion off shore accounts, stashed.i refuse to suffer tribulation, or war, forbillionaire hand out queens..water, food, energy.

Even Amid Gloom, Stocks May End Year With Gains ( CNBC )key quote from Mario Gabelli”Stocks Are Cheap and Worth Buying”Here is a CNN article from 2006 about Gabelli.

nice.

Nothing is “safe.” The only argument at this point for holding your liquid worth as anything other than your own national currency (which is itself subject to the dangers of future devaluation and/or inflation), is that most people are so completely inducted into the financialization of modern civilization that they require a financial intermediary in order to manage their own wealth. In other words, your savings need to be in a bank account, brokerage account, IRA, or whatever only because you a) believe you will be provided some gain – interest or capital appreciation – or b) you trust financial institutions more than yourself (or perhaps, your neighbors, if you’re afraid of being burgularized). Are future Social Security payments “safe”? Are re-payment to purchasers of Treauries “safe”? Are funds in FDIC-insured accounts “safe”? If, by “safe” you mean politicians make speeches claiming that “the money will be there when we need it, so consider it guaranteed”, then you may consider it safe. Realistically speaking, in the absence of an atomic world war, global pandemic catastrophic plague, etc, FDIC-insured accounts are as “safe” as any other “government-guaranteed” investment vehicle simply because the Fed can (and has started to) print money from thin air as needed to bail out the various government guarantees. You’ll get your principle back, but it may only buy 10 cents on the dollar worth of goods if money-printing was the only way they could give it to you.

I finally read ‘atlas shrugged’ last fall, and that was one of the last laws passed prior to the end of the book. Had no idea this law, which I had taken to be pure hypothetical fiction, had some basis in history–seriously?

See my comment above regarding the safety of FDC-insured accounts, Treasuries, etc.

c,great question! i can’t help you with the answer part, though, i think the answer will become evident soon.?

Well the “BOTTOM LINE”is that the Federal Reserve purchases the Fed Govt Bonds ,if no one else will.Certainly the Fed/Govt will continue to bail out the FDIC to ensure that the first $100,000 or so in each persons account is fully protected.Without this there really would be a lot of artificial hysteria and unrest.The economy truly would not function.All control would be lost.The bottom line for the Public is that the $20.00 Bills keep coming out of the ATM,s no matter what and that cheque,s keep being honored.Anything less is chaos and totally unnecessary.Its true ,in tough times CASH really is “KING”

Or economic collapse Mark

This is ridiculous. The whole system is bankrupt. How did the asses in charge so poorly regulate the system that this could occur? I always heard another Great Depression could not occur because of the institutions and programs put in place since then.

grow something to sell, like oranges or veggies. People will need to eat and as this gets worse, the transport from Chile will be disrupted and local food will be in demand.During the last depression, my grandfather was a blacksmith, metal worker and he prospered as everything needed to be made to last and be repaired.Garden and small farm products will do well I think as people will want to have their own chickens again and gardens.Possibably you might want to learn gun smithing or how to sew clothing or something useful that can be traded or sold.

not cool ….. give credit where it is due. All the shouting heads on TV were going on and on about how things were fine and if you took their advice instead of listening to the Prof, u have to blame yourself. Expecting Prof to come up with a solutions is an unrealistic expectation.

We’re staring into a free-fall recession, and Obama proposes a massive red-ink budget.Suppose the country was in Boom Times. What kind of budget would he be giving us then – a $35 trillion budget?There’s no stimulus in his budget. It’s just government jobs and pork and war and has nothing to do with rebuilding anything but Big Government and Empire. How can Americans afford a bigger government? This is the most irresponsible budget ever devised by politicians – even if they are Clinton and Bush retreads.The point is, one-half of the budget has to be paid for by more red ink and borrowing or by Bernanke’s printing presses – the very things that helped push us into this dilemma. The people are frightened, as they should be. We’re out to sea, in a rudderless boat.And the banking system is sitting in quick sand and it’s sinking. And, just as in those old movies, if you reach out and try to save it, you’ll go under with it.It’s now a standing joke on financial talk radio that every time Obama speaks, the market falls. The man and his advisors are clueless. America remains leaderless.

There are reasons in Physics which explain the (mis) behaviour of men, however, we, indeed, that is, most men – prefer to deny that we are anything but Godlike and innocent of all acts of malfeasance, genocide and frenzied self-adoration: au contraire.”By far the most numerous and most flagrant violations of personal liberty and individual rights are performed by governments. The major crimes throughout history, the ones executed on the largest scale, have been committed not by individuals or bands of individuals but by governments, as a deliberate policy of those governments, that is, by the official representatives of governments, acting in their official capacity.” — John Hospers Professor Emeritus of PhilosophyUntil we can reject our denial and accept our nature, we will continue to feed upon each other.However, “leadership” will ride this, their horse, to hell rather than to admit to incompetence and stupidity; such is their nature.Ho hum

c,terrifying, yes. i have the same reactionwhen my mind wanders there, either that orgut wrenching horror. ( this is no improvement ).total opacity and darkness mixed with uncertainthreats of terror and destruction tend to have thateffect on the human mind. i tell myself to shakeit off. repeatedly.

I suggest that you study fish stocks in the wild – plenty of studies available – where it appears that it is the level of predators that contain and unleash growth;-)Ho hum

From John Maudlin – for a laugh as it is a mite out of character:”European Commission officials have estimated that “impaired assets” may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.In addition, so-called ‘available for sale instruments’ worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.”Do yourself a favour – read those two paragraphs again. Newspaper editors do not change content light-heartedly. Did the Telegraph editor receive a call from Downing Street? Or Brussels? Did he have second thoughts about the avalanche that he could possibly instigate? I don’t know and I probably never will. But one thing is certain. If the EU Commission’s estimate of £16.3 trillion of impaired assets is correct, then the crisis is far worse than any of us could ever imagine. Not only would we have to get used to the prospects of a systemic meltdown of our banking system, but entire nations may go down as well.”Ho hum

It is possible that the government neither has the man power nor the expertise to take on this problem even if they wanted to, which it appears they don’t.Can you imagine the size and scope of shutting down the big four for a week and discovering all or even most of what is making them insolvent while keeping alive the existing credit system so that mothers can purchase milk and eggs for their families and buy gas to get to work. Not to mention all the deals at the ports and terminals all over…I think this mess is to big to solve as much as the banks are to big to fail.What is imagined here, that the crooks suddenly turn righteous and jump in and help the government find where all the bodies are buried?

Pensions and 401(k) deposits are insured to $100,000 per person if their individual ownership is identified by the plan and the institution where you have your deposits offers insurance. They are not insured to $250,000, as are IRAs.Here are some Vanguard ‘notes’ regarding its 401k investments, dated February 6, 2009, in “Saving for retirement: What’s your strategy?” from its web site. I would not think you are insured unless Vanguard offers an insured CD in which you are invested.. All investing involves risk. Investments in bond funds are subject to interest rate, credit, and inflation risk.· Diversification does not ensure a profit or protect against a loss in a declining market.· An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporationhttps://personal.vanguard.com/us/VanguardViewsArticle?ArticleJSP=/freshness/News_and_Views/news_ALL_retirement_strategy_01302009_ALL.jsp

Ya know, I thought I read somewhere last week that McD had borrowed $400 billion from Japan. Did I misread that?

Some lucky person got your gold. You will have a devil of a time getting it back. All you are seeing is variations in the gold price – within a trading channel.PeteCA

OMG. Only $100k? I will be moving my money out of Vanguard. If an IRA is in a brokerage account, doesn’t the SIPC insurance cover it to $6 million, not that I have that much?

Your Commie group is so stupid it still calls for the impeachment of Bush:http://www.veteransforpeace.org/Impeachment_campaign.vp.html

I misunderstood: I thought Worried Investor was asking if his principal was insured in the stock market if its value dropped or was wiped out. I see he was asking if Vanguard was insured. Sorry.What Happens If Your Broker Fails? SIPC Brokerage Insurance Info (November 2007)In case you haven’t heard, E-Trade got punked by Citi yesterday and its market value dropped by more than half in one day, ending at $3.59 per share. As recently as June, it was trading at $25. Shareholders are screaming class-action, but what if you’re just a regular brokerage account holder worried about bankruptcy? What happens when a broker-dealer fails?First of all, your money at E-Trade Bank is covered by the FDIC. See here for a discussion of what happens if your bank fails. Your holdings at E*Trade Brokarege are covered by the Securities Investor Protection Corporation (SIPC). I have a feeling a lot of visited the SIPC website today… I did, and here’s what I found:What’s Covered By SIPC, And What’s NotThe cash and securities ? such as stocks and bonds ? held by a customer at a financially troubled brokerage firm are protected by SIPC. Among the investments that are NOT protected by SIPC are commodity futures contracts and currency, as well investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.Basically, if you had 5 shares of IBM, you’ll still end up with 5 shares of IBM regardless of its actual value.How Much Coverage Do We Get?Customers of a failed brokerage firm get back all securities (such as stocks and bonds) that already are registered in their name or are in the process of being registered. After this first step, the firm?s remaining customer assets are then divided on a pro rata basis with funds shared in proportion to the size of claims. If sufficient funds are not available in the firm?s customer accounts to satisfy claims within these limits, the reserve funds of SIPC are used to supplement the distribution, up to a ceiling of $500,000 per customer, including a maximum of $100,000 for cash claims. Additional funds may be available to satisfy the remainder of customer claims after the cost of liquidating the brokerage firm is taken into account.What Happens After A Failure· Best case scenario: Your shares are quickly transferred to another broker-dealer, and you can resume selling or buying as needed.· Worst case scenario: Your brokerage firm has poor records, is put into liquidation, and the court-appointed trustee will notify you and send a claim form and instructions. You send it in, and you could wait months to receive your stock certificates back.How quickly will I get my investments back?Most customers can expect to receive their property in one to three months. When the records of the brokerage firm are accurate, deliveries of some securities and cash to customers may begin shortly after the trustee receives the completed claim forms from customers, or even earlier if the trustee can transfer customer accounts to another broker-dealer. Delays of several months usually arise when the failed brokerage firm?s records are not accurate. It also is not uncommon for delays to take place when the troubled brokerage firm or its principals were involved in fraud.Good Precautions To TakeGiven that you probably have no idea whether accurate records would exist or not, we should be prepared and keep good records of all your transactions and keep statements. If you have them online, I’d run backups or print them out regularly. Here is an example of a claim form from a smaller failed broker-dealer from 2001. It really does ask you to confirm all your holdings and even trade dates. More info:Do I have to prove what the broker owes me? How does that work?Yes, usually that is done by describing in your claim form the cash and securities that are owed to you. The court-appointed trustee will compare what you claim against the books and records of the brokerage firm. Frequently, your entire account can be transferred to another brokerage firm for your benefit before you have even filed a claim. However, there are sometimes instances of mistakes in brokerage firm records. In rare cases, these mistakes show transactions made without your authority. You should keep copies of trade confirmations. You should keep copies of your latest monthly or quarterly statement of account from your brokerage firm. A trustee may ask you to supply copies of these documents.SummarySIPC coverage definitely isn’t as nice as FDIC insurance. Not only do I have to prove what the broker owes me and submit claim form, but it may take 1 to 3 months to get my stock certificates back. In the meantime, I won’t be able to sell them (bad if you’re not a buy-and-hold’er). While it’s nice to know that I am covered, reading all this doesn’t make me want to stick with a brokerage company that is still entangled with unknown liabilities from subprime debt.Many brokerages also offer additional coverage above SIPC levels…http://www.mymoneyblog.com/archives/2007/11/e-trade-go-splat-basics-of-sipc-brokerage-insurance.html

Today I thought of a good name for a Bad Bank:Securities Holding and Investment Trust Corporation.or SHIT Corp.

The comment reported by a former adviser to the Chinese central bank might not be construed as official, but on the surface the threat or demand by China is for the US to sustain policies that retain the value of the dollar and therefore their US treasury holdings. In other words the Chinese obvioualy don’t want US policies that cause substantial inflation and devaluation of their US treasuries.But does China have other assets at risk?While RGE has exemplary research on sovereign wealth funds such as the Chinese, it is unclear if they (RGE) know or are willing to reveal what other instruments the Chinese or other SWFs may be holding (directly or indirectly) that are threatened by the US bank crisis and in consequence what political pressure the Obama administration is feeling behind the scenes to prop up the situation without conceding the necessity of Prof Roubini’s remedies. That the remedies may be blocked by international political pressure should be frankly investigated and discussed by RGE. Certainly it seems the debate about nationalization within the US is otherwise exhausted based upon Prof Roubini’s comments above. So are international political pressures blocking Obama adminstration progress/resolution?In particular as perhaps the most obvious and egregious hypothetical, are the SWFs pressuring the Obama administration directly or indirectly to honor the AIG counter party claims? If so, can Prof Roubini please explain how AIG can gracefully fail under those circumstances?

g,what is your group calling for? if i may ask,have you made any attempt to reach out toour former president, george w. bush, to have himspeak at one of your gatherings? actually, i am curious what his fee might be. if you know?ps.i am not associate, nor have i ever been, withany group or organization, or had any affiliationwith any person or group of persons that wereidentified as “communist”, unlike richard nixon, bill clinton, the state of israel, ford motor company , mao tse tung and the u.s. treasury and ferel reserve bunk. not to mention all thoseduped olympic athletes like your michael phelps, the unfortunate pot smoking gold medal champion..what is it about veterans who see peace as the answer to our problems that scares you? population?.ps. peace is more affordable and more economicallyrewarding as compared to the other, non peace – conflict. war, occupation or intimidation. and, there are the quality of life questions. morality, conscience etc.. and of course the big one … self preservation. ! not just “commie” questions.

via DrudgeRussia: Obama ‘ready to drop shield plans for Russian help on Iran’

Ah, you seek wisdom. “The beginning of wisdom is the definition of terms,” said Socrates. But, alas, as Samuel Johnson said, “The mental disease of the present generation is impatience of study, contempt of the great masters of wisdom, and a disposition to rely wholly upon assisted genius and natural sagacity.”Many of the answers to your wise questions, which would put us on the road to recovery, can be found in the writings of Ludwig von Mises, Henry Hazlitt and Murray Rothbard.

Toyota May Get Aid From Japan as Credit TightensMarch 3 (Bloomberg) — Toyota Motor Corp., forecasting the first loss in 59 years, may get aid from the Japanese government, as the global financial crisis makes it difficult to raise money.The company’s financial unit may ask for 200 billion yen ($2 billion) in loans, broadcaster NHK reported today, without saying where it got the information. Toyota Financial Services Corp. is in talks with state-owned Japan Bank for International Cooperation, said spokesman Toshiaki Kawai without confirming the timing or amount.The carmaker expects a net loss of 350 billion yen after vehicle sales in the U.S., traditionally Toyota’s most profitable market, plunged 31 percent last quarter. The global recession has also forced General Motors Corp. and Chrysler LLC to get bailouts from the U.S. government…http://www.bloomberg.com/apps/news?pid=20601087&sid=aBA0r9UqrGVo&refer=home

Tom O’Brien thinks gold will retrace back to 830 or so. He says that would be a normal retracement before it goes forward again. I sold my gld at 98 but bought back a partial and then sold that at a little loss. I am going to wait to see if it does what Tom says and hope it does. He is also looking for a rally in the S&P by week end. The markets keep closing on lower on low volume and that isn’t very definitive. Not enough sellers to make the lows real. Even on all this negative news the markets just go lower on low volume. No capitulation yet. Besides markets seldom just go up or down without a break. A retracement.

Hats off to Professor Roubini for this powerfully written description of the capitalist Armageddon! Some passages remind Marx’s dialectic style. Take this, for example.” With massive excess capacity in the industrial/manufacturing sector and thousands of firms shutting down why would private and state owned firms invest more even if interest rates are lower and credit is cheaper: given the glut of capacity monetary and credit easing is like pushing on a string. Forcing state owned banks and firm to lend more and to spend/invest more will only increase – after a short term boost spending and economic activity – the size of non-performing loans and the amount of excess capacity. And with most economic activity and fiscal stimulus being capital-intensive rather than labor intensive the drag on job creation will continue.So without a recovery in the US and global economy there cannot be a sustainable recovery of Chinese growth. And with the US recovery requiring lower consumption, higher private savings and lower trade deficits a US recovery requires China’s and other surplus countries (Japan, Germany, etc.) growth to depend more on domestic demand and less on net exports. But with domestic demand growth being anemic in surplus countries (China, Japan, Germany, and emerging economies relying on export led growth) for cyclical and structural (demography, weak household income growth as massive and excessive corporate profits/savings that are hoarded rather than transferred back to households in the form of dividends). So recovery of the global economy cannot occur without a rapid and orderly adjustment of global current account imbalances.”But, of course, “a rapid and orderly adjustment” of capitalist anarchy requires a gigantic dose of socialist medicine to save capitalism from itself. The far-seeing servants of capital understand this necessity. Yet the real power is in the hands of Blankfeins and their political puppets who identify their own survival with the survival of capitalism while the opposite is true: to save the capitalist system, it is necessary to wipe out in “temporary nationalization” Blahkfeins and other bankrupts. Oh, those contradictions! Keep digging the old mole!

I opt for borrow from abroad and print. Where else? We no longer produce as the major economy we were. I’m serious. The US, IMO, is ultimately headed for hyperinflation, a devalued currency, and joblessness. I foresee unemployment growing much worse by summer as trip wires trigger loss of more jobs and stall production, i.e., a contractor who stops buying trips the lumber yard, the lumber yard trips the restaurant and local bank, the restaurant and local bank trip the restaurant suppliers…et cetera.On top of this, credit is frozen because of corruption, bankruptcy and a lack of trust that is crippling the banking system and we have a Congress incapable of addressing the problem.

or do you mean ‘too accurate’? ..lol

“Across the board reduction of the face/principal value of mortgage debt and other consumer debt for insolvent households as a case-by-case debt re-stretching of debt will not work”- NRNO. No way, no how. There are laws in place to handle debt workout. Irresponsible borrowers and lenders should face the music.Bankrupsy laws work just fine.Why should greed and speculation be rewarded with forgiveness??This flys in the face of hundreds of years of common and contract law. This will sow the seeds for the next debt bubble which is exactly what TPTB want.Utter madness!!

I would really, really, really like to know why we are throwing more (admittedly devalued) billions of dollars at AIG to keep it propped up. My gawd. It’s like a vampire. You can’t kill it. It just keeps coming back for more green blood.I’m spitting nails.

Tailoring or shoe repair…Dallas Morning News says local cobblers have all the work they can handle.

If it weren’t real, it would be one of the greatest comedies of all time. I still can’t believe Americans are letting themselves be looted and haven’t gone out of the streets yet.

Nikkei tried to Rallyit was/is fun to watchWolf are you watching it??

p,”bull market”?

Too many grammatical errors… I hate typing over lunch… yes. Absolutely love short covering. Once you take out the shorts, guess what? There will be no buyers left. Expecting Asia to melt further in the next 2 weeks. Economic numbers out of Asia are beyond horrendous.I suspect the drop in economic activity is so sharp that no one actually KNOWS how to react. Analysis of Asian economies point to extensive operational leverage to demand in the West. Unfortunately for Asia, that demand is not coming back for a long time. What this spells for Asia is probably a very sharp decline in GDP (probably in double digits, which is depression levels) in 09 with little recovery. Fiscal expenditure can slow that decline but there are limits to fiscal expenditure. Government spending cannot replace private investment and the excess capacity (probably 20-30%) will imply almost no private investment in the next few years, barring technological improvement and obsoletion of current plants. Even then, it will be limited. The speed of the decline implies no one was prepared for it. Asia is going to be in a far greater crisis than 1997. There will be massive social and political implications for the next 5 years. Asia maybe somewhat immune to the financial crisis but it is now caught in the worst economic crisis in the last 60 years. It is exciting, and depressing times.

bull market in gold & silver.PeteCA

Wolf … everyone is in trouble. The western banking system is headed for collapse. Obama is now talking about “preventing a catastrophe”. Asia will get a rise in unemployment – but maybe they will cope with it. I am surprised (beyond belief) that they have not quit buying US debt and ploughed the money into their own stimulus programs. They have got nothing to lose at this stage.PeteCA

Well Tom k ,well said.Unfortunatly when everyone was warned of the Industrial /Military complex by the President at the time,another leg to that table was left out.It should have read “Military/Industrial/Banking Complex.We are surly suffering now by the power brokers being able to manipulate the elected officials at will ,to change any technical finance controls ,to permit the world’s largest scam of tax payer money in the history of the world.It is really something to sit back and watch the machinations to transfer taxpayers money in a variety of forms to the “Bankers”for their precious bailouts,where they created the need in the first place.I dont see anywhere where individual citizens designed any of the “Special Mortgages or Special Derivatives,including Credit Default Swaps”,currently in use.In fact I have not seen any attmpt to actually change the rules.Who’s Kidding who here????

India fastest growing economy Pete, Wolfie,How do you react to Indias number. Will it slip into recession too

But this is a byproduct of the fact the top 20% take 80% of the “WEALTH” to start with because of the laws on the books, leaving the rest of us to argue over the last 20%.It is true,hard working people get ticked off when Govt intervenes with “Negative Assistance”,instead of Govt incentive to take job training and get active in the economy.The same applies when we see a union job scale that,s more than ours when we know we work just as hard or more.One of the real “TRUTH’S”is when you divide the national income by population the factor indicates an “AVERAGE’of $40 per hour per person in all of American Society .We somehow just dont get it.A degree of partial income parity is necessary for any country to survive .Without a financially solid middleclass ,no one benefits in the long run.Taxes to some extent have to vary the take home pay for the purposes of social equity.This also brings up the question “Where did all those good paying jobs disappear to ?” The people all of a sudden didn’t lose their personal talents….

Pete,With the greatest respect, this bailouts of AIG is pure looting. The money goes to pay to AIG, then to hedge funds and investment bankers to pay off their CDS and other derivative positions.AIG should be put into bankruptcy, and the investment bankers should be forced to take their medicine. Pure and simple.There is NO WAY taxpayers should be bailing out hedge funds who took bad bets on the marketIts insane

Yes, and when the major players are property positioned, they will deliberately set the markets into panic mode in order to find buyers for Treasuries. They must create the belief that there are NO ALTERNATIVES when it comes to safety.

cramer is an ass.

he gives himself too much credit he actually believes in his nonsense theories of saving the market by shuffling the chairs on the titanic.

stick and savestick and savestick and saveLOLthey are out of ammo’s, this is the best they can think of??http://www.reuters.com/article/newsOne/idUSTRE5220E420090303Obama considers funds to buy bad assets: reportNEW YORK (Reuters) – The Obama administration is considering a plan to purchase bad loans and other distressed assets by creating multiple investments funds, according to The Wall Street Journal, quoting people familiar with the matter.The funds would be part of what the administration is calling a private-public financing partnership that would take distressed assets off banks’ books. No decision has been made on the partnership’s final structure, but a set of separate funds run by private investment managers is one leading idea, according to the Journal.

The huge gap in income and wealth between the middle class and the very rich, coupled with the way the tax laws favour investment income over earned income is a recipe for disaster. CEO’s who believe they are entitled to earn more in 1 day than the average worker in their company makes in a year while at the same time running their companies into bankruptcy – give me a break. When times are good it’s because they are brilliant; when times are bad it’s because of ‘market conditions’. The proportion of the rich that are parasites is probably about the same as the poor – the rich can afford better Public Relations consultants though.

Good question from macro man:11) When did Bill Gross sell his intellectual soul to the devil and focus his investment model on media manipulation and inside information from the government?Answer: He already does.

pjb,Does anybody know if that was the notional value of the criminal derivatives that was being indicated or the current payout requirements if those derivative contracts were to be paid today?

More destruction for Americans. So if you are like me, and paid everyhting for your entire life and maintened excellent credit like I do/did… you can expect your credit scores to go lower for paying on time. I have 4 AMEX cards and the 2 that have interest rates hav gone up, even though i carry no balance on them. they also lowered the limits on them by 15k each. These credit rating agenecies need to be shut down. we do not need that system anymore, especially scores. they did nothing to keep us out of this mess where people got mortgages despite bad credit.Where is obabma and congress on these easy to fix issues… oh right they passed credit card portection laws that are effective in july 2010… There will be nothing left by then…. They are idiots…take, take, take equals tick tock, tick tock, tick tock whcih equals BOOM!American Express, Chase Cut Card Limits, Lowering Credit Scoreshttp://www.bloomberg.com/apps/news?pid=20601213&sid=adCwmmkzFI3U&refer=home

Mmmmmmmmmmmm,Somebody recently suggested getting rid of all credit card use – helps the merchants. Do as much as possible in cash. These scum sweeping credit cards hurt the user, hurt the merchant and reward the shark “loan” rate banksters. Go figure why anyone would want to continue to enable that kind of process. NOT ME! Let them rebuild their bank sheets on somebody else’s back.

via NCThe Limits of a “3 Minute Rahm” in Obama’s Kitchen Cabinet

I can’t get into names, but if a crafty business journalist got on the phone to the biggest billionaires and financial wizards who support the Democratic Party and Barack Obama, he or she would find a large passel of very frustrated economic elites who think that Obama’s stimulus package and spending priorities are not going to either restore confidence and economic growth or reinvest in the backbone of the US economy in a way that can help generate recurring returns for future generations of citizens.The folks I am talking to are definitely not part of the market fundamentalist Robert Rubin fan club. They see the world differently, but I’m beginning to wonder if we really all should be very worried that some in Obama’s economic kitchen cabinet (or who we think is in it) are so dissatisfied with the substance of the policy outcomes we are seeing thus far.I asked one of them who I assume can get through to the President or at least to Rahm Emanuel any time he wants why he doesn’t make his case more clearly to the occupants of the White House. The response was, “Yes, I can get through to Rahm Emanuel any time, but I get three minutes with him, and then someone else gets their three minutes, and so on. Rahm is the three minute guy — and he’s great during those three minutes.”Wealthy donors on the outside of the political process probably should not be able to just call up the President and get their way — but the frustration I’m hearing from a great number of these types of donors — types who are not only wealthy and helped finance much of the Democratic Party’s victory in November but who are also smart and connected — is that they are not getting through where it counts. The policy options they are proposing aren’t getting into the basket of proposals that Obama is considering.In other words, some feel that Obama is not getting a full range of choices on the economy and is being provided a narrow band of views that fit the preconceived biases of Larry Summers and Tim Geithner.One of the fatal mistakes of the Bush administration in the build up to the Iraq War was the tight constriction of choices and views that Bush’s advisors allowed him to see.Let’s hope that the Obama team isn’t making the same mistake on the economy.

http://www.thewashingtonnote.com/archives/2009/03/the_limits_of_a/

Screw the tax payer pillage the U.S. but wait that’s not flying politically so let’s keep biding time and repackaging it with a different name eventually a name will be appealing to the public.

Pardon my interference with the whacko political commentary you seem to inspire, but shouldn’t you be saying that the second derivative has not yet turned negative but is still positive to make your point? The second derivative being positive means that the rate of change is increasing, no matter which direction it is headed. I believe this is what you intend to say.

What else would you do if unknown parties and their associates plotted and flew two jetliners into skyscrapers?

Unless you live in a very secure place with few desperate people, carrying lots of cash is like having a sign around your neck asking to get mugged. Many gas stops don’t even take cash anymore. There is great safety in credit and ATM cards.If you carry lots of cash, have it separated into different areas so that when you take it out, it is a small amount. Carry a throw away wallet so if mugged you can give it up. When I travel with cash, I carry one with old expired credit cards and some money.Money belts are good.Just be careful and be aware of your surroundings. A wad of cash can be a magnet for the wrong kind of people.

Pension bombs going offhttp://www.chicagobusiness.com/cgi-bin/article.pl?articleId=31402

with Obama’s Lincoln-worshipping complex, maybe somebody ought to send this on to his Blackberry.

positive second derivative -> first derivative is increasingnegative second derivative -> first derivative is decreasingIf first derivative positive (i.e. the function F is increasing)positive second derivative -> higher increase of Fnegative second derivative -> slower increase of Fif first derivative is negative (i.e. the function is decreasing)positive second derivative -> slower decrease of Fnegative second derivative -> higher decrease of F

we need to organize a taxpayer revolt where everyone stops using their debit and credit cards and goes to cash. We also significantly reduce spending and pull all deposits out of the major banks like JPM, BAC, Citi, Mer, etc.

This BS MUST stop!TPTB continue to sell us down the river and we just watch it happen!How to we get a revolt started?

OK, let’s take brief interlude financial charts. I mean, heck, this is an economics blog – right ???Go to http://www.stockcharts.com and type in $RUTWhat you’re looking at is the Russell Index for small businesses. Notice a key fact – this chart just started moving to new lows. And if you expand the time scale by going to 3 years, you might even say to yourself “Oh my gosh!”. Or something with more expletives. Because it sure looks like this chart is about to undergo another sudden big drop, similar to what happened in early October of 2008. Hold that thought. We’ll come back to it.Now we venture over to look at $SPF and $BKX, also on stockcharts. Yep, sure looks like the financials and the banks are continuing that serious downward plunge. Not a surprise. But remember that interesting piece that was posted here yesterday. Community banks are now having to plough quite a bit of money in to support FDIC funding. Ouch! It all hurts, and it all sucks away the bank profits. And this comes at a bad time as commercial real estate is plunging. Lots of bad commercial RE loans hitting these banks right now.So the point is this …* Looks like we’re headed for a period with more small and mid-sized banks in the USA going bust* It also looks like we’re headed directly into a period of serious business bankruptcies. This coincides with major tightening of business credit by the banks.* This would certainly point to a further spike in unemployment in the USANow finally we move over to our old friend … the infamous Four Bears Chart at this link:http://dshort.com/charts/bears/four-bears-large.gifNotice that the blue line marking the current market is falling right on the gray line that coincides with the 1929-1933 depression. Looks pretty ominous, doesn’t it? Sure does. But not surprising. The US economy built up an enormous overload of credit, which cannot be justified by the real productivity of the country these days. Something has to give, and it sure looks like the blue line knows this.Point being? I wouldn’t be surprised if we hit a really turbulent stretch in the US economy in the next 2-3 months. We may even see that blue line dive UNDER the gray line, making the current economic descent the most rapid on record.No wonder the White House is murmuring comments about staving off an “economic catastrophe”. For the rest of us on Main Street, it means some even more serious tightening of belts. Maybe even the expectation of a bank holiday sooner or later, while the Gov’t tries to sort out the banking system.PeteCA

Pete, on the 4BadBears chart, they compare the ’29 DOW with the S&P 500 for the rest of the downturns. Why is this? Is it a fair comparison?

MCD is borrowing $40 billion yen, about $400 million USD. Which further leverages its balance sheet, and exposes it to currency risk. It didn’t say what it needed the money for.

Pete…Your points are well taken. Here’s a different point of view, just for discussions sake. It comes from this article:http://online.wsj.com/article/SB123604419092515347.html“The price of oil and other commodities have fallen by two-thirds since their 2008 summer peak, which has the effect of a major tax cut. The world is awash in liquidity, thanks to monetary ease by the Federal Reserve and other central banks. Monetary policy operates with a lag, but last year’s easing will eventually stir economic activity.Housing prices have fallen 27% from their Case-Shiller peak, or some two-thirds of the way back to their historical trend. While still high, credit spreads are far from their peaks during the panic, and corporate borrowers are again able to tap the credit markets. As equities were signaling with their late 2008 rally and January top, growth should under normal circumstances begin to appear in the second half of this year.”The journal seems to think that the picture is rather rosy, save the fact that Obama is in power (that’s the premise of the article, for those who didn’t get over to read it).What say you?

I wonder what the structure will be: guarantees by the government, profits for the investing banks probably. Getting used to that sort of “solutions” to rescue and feed the Ponzi’s of this world.

Hat tip to Dr. Jim de Costa on http://www.deepcapture.comTHE NSCC-THE “FORGIVING FRATERNITY”Our DTCC administered clearance and settlement system utilizes a system involving the legal concept of “novation”. “Novation” means “to create anew”. When a trade is executed the selling party owes the buying party the delivery of the securities it sold. During “novation” the delivery obligation of the selling party is “discharged” and the NSCC as the “central counterparty” (CCP) to the trade “assumes” this delivery obligation and promises to “execute” on it EVENTUALLY. The original selling party now owes the NSCC (and no longer the party it sold the securities to) the delivery of that which it sold and the NSCC then promises as the CCP to forward those securities on to the buyer.For 29 years I’ve been writing on how tricky “novation” can be especially if the selling party is a card carrying member of the party that “assumed” the delivery obligation it recently “discharged” and promised to “execute” on. If the CCP, the NSCC in this case, refuses to act in good faith in executing the delivery obligation it just “assumed” then the financial system supported by that clearance and settlement system is in deep trouble. Why?In slow motion what happens in “novation” is that an NSCC “fraternity brother” sells securities to somebody half way around the world. Two seconds later it now owes the CCP (the NSCC) the delivery of those shares. The NSCC also just happens to act as the “fraternity headquarters”. The seller of securities all of a sudden now owes itself as a fraternity member and its fellow fraternity brothers the delivery of that which it just sold.The NSCC just so happens to qualify as an extremely “forgiving fraternity”. A “forgiving fraternity” says to its fraternity brother debtors now that your debt is owed to yourself and your fraternity brothers you don’t have to deliver that which you sold previously as long as you at least collateralize the monetary amount of your failed delivery obligation. The clever part is that as all of these failures to deliver (FTDs) that give rise to readily sellable “securities entitlements” invisibly pile up in the share structure of the corporations targeted by fraternity brothers for destruction then the share price of the corporation predictably plummets. As the share price plummets so too do the collateralization requirements. Why? Because they are “marked to market” on a daily basis based upon the share price.As the collateralization requirements plummet the money of the unknowing investor on the buy side of that trade involving a failure to deliver flows to the selling fraternity brother despite the fact that he still hasn’t delivered that which it sold. In fact in a system with a “forgiving fraternity” that which was sold never needed to exist in the first place.Now how clever is that? You sell something that doesn’t exist and two seconds later you owe the debt to yourself and your extremely forgiving fraternity brothers. As if by magic this then automatically results in the investment proceeds of the investor getting duped to flow into the wallet of the fraternity brother that just has to merely refuse to deliver that which he sold. But don’t you have to worry about the fraternity headquarters forcing the fraternity brothers to deliver that which they sold so that they can “execute” on the delivery obligations it “assumed”? No, that’s part of the deal with a “forgiving fraternity”.The fraternity headquarters (the NSCC management) will with 100% certainty pretend to be “powerless” to buy-in that debt even though it has all of the power in the world to do so. That’s all part of the “package”. In fact what’s really exciting is that when a fraternity brother absolutely refuses to deliver that which it sold the ONLY “cure” available is a “buy-in” and the fraternity headquarters thus bypasses the only solution available. That’s one of the services of a “forgiving fraternity”.Does the “forgiving fraternity” charge interest on the monetary amount of the failed delivery obligation while it is owing like in the real business world? No, it’s just the opposite. As the share price predictably tanks the money flows the other way i.e. back to the fraternity brother refusing to deliver.Another thing that is really helpful is that the “fraternity headquarters” is actually an SRO or “Self-Regulatory Organization” that is mandated to act as “the first line of defense against abusive naked short selling frauds” LIKE THE ONE THAT IT SPONSORS! Now how cool is that?Why does anyone continue to play this game?

‘Bernanke Says Insurer AIG Operated Like a Hedge FundBy Craig TorresMarch 3 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke said American International Group Inc. operated like a hedge fund and having to rescue the company made him “more angry” than any other episode during the financial crisis.Bernanke made the comments in response to a question from Senator Ron Wyden, an Oregon Democrat, at the Senate Budget Committee hearing today in Washington.“If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG,” Bernanke said. “AIG exploited a huge gap in the regulatory system, there was no oversight of the financial-products division, this was a hedge fund basically that was attached to a large and stable insurance company.”The insurer will get as much as $30 billion in new government capital and relaxed terms on its bailout after posting the worst loss by any U.S. corporation yesterday. Bernanke’s comments foreshadow more regulation of systemically important financial companies even if they aren’t banks.AIG “made huge numbers of irresponsible bets, took huge losses, there was no regulatory oversight because there was a gap in the system,” Bernanke said. At the same time, officials “had no choice but to try and stabilize the system” by aiding the firm.The insurer’s fourth-quarter loss widened to $61.7 billion, or $22.95 per share, from $5.29 billion or $2.08 in the year- earlier period, the New York-based insurer said. The results brought AIG’s annual loss to almost $100 billion, prompting the U.S. to offer a package of equity, new credit and lower interest rates on existing loans designed to keep it in business and prevent a new shock to the world’s financial system.’And a shock to my belief in American institutions.

It seems the financiers at the helm and their political puppets are so over the top with their suggestions that we may be headed for some sort of resolution. The secret to saving America is for the people to take over their government. It was supposed to be self-government. We have drifted into rough waters and the people are awakening to the need to get back on course.The Ship of State is in deep trouble, we elected a “savior” to get the economy going again, and he and his crew came up with a stimulus package. The people responded against it and within two weeks prior to the vote, the web site “NoStimulus.com” garnered 465,000 signatures against the stimulus. People are savvy to the fact it’s not a stimulus — it is pork, it is gravy, it is government waste, it’s bigger government, it’s more tax money for the plutocrats.For consecutive days, NoStimulus.com and Americans for Prosperity, with the slogan “Fight the Special Interests That Want to Take Your Money,” were the leading search terms on Google and Yahoo.http://nostimulus.com/

Just wondering, those people who are still solvent, reasonable/sensible borrowers, savers and the like, are the ones least likely to borrow money, even with low interest rates. They are more likely to pay down debt.If I were one of those who was essentially bankrupt,upside down on their house, unemployed and could get a loan, I sure would take it, with no intention of ever paying it back. I would be screwed anyway. It appears that Obama, Turbo et al are determined to find a channel from which they can pump more money (debt)into the system. Problem is, it will just re-energize the very problem we are trying to overcome.

What good is liquidity when the majority of consumers are up to their eyeballs in existing debts. This happened even before the big gas price increases in 2006-8. And they have extremely high interest on all their credit card debts. A little tax break or a little break in fuel prices is not going to fix their balance sheets in any short order or we wouldn’t be seeing the huge down turns in consumer spending and rapidly rising defaults, foreclosures and bankruptcies.TPTB keep preaching this liquidity thing to no avail. Even the CPI hasn’t cracked appreciably. Meaning there is no appreciable benefits to the consumer from lower oil and commodities prices. Maybe there will be but what shape will the consumer be in then?There certainly is NO sign that the banks are in any position to lead us out and with out the banks, can there be a recovery? Not the way credit is behind almost ALL transactions these days. So until after the administration closes down and sells off the big five and does the same with all the medium sized banks that are insolvent across the country, DOWN is the only way we can go. We can not recover until the majority of the debts are written off or down and the insolvent banks are done away with.Does anyone think otherwise. Like we can save the banks and then do what? Lend to insolvent consumers with bad recent experiences with debt?

NYTimes Op-Ed:If you have to ask “Recovery?” By JAMES GRANTPublished: February 28, 2009“WHEN you stop asking,” was the exasperated reply of the broker to the pestering client who asked the same question over and over during the 1974 stock-market crash: When will it end?Nobody knew, or could know. The broker, wiser than he realized, chose not to serve up the windy non-answer that fills so much cable TV time today: “Well,” he didn’t speculate, “the bear market will end when the Watergate crisis is resolved and the Federal Reserve gets its arms around the inflation problem and business activity shows convincing signs of a pickup.” Instead, he blurted the truth that bear markets end when investors give up hope.Hope sustains life, but misplaced hope prolongs recessions. At the root of this paradox is the notion that booms don’t just precede booms, they cause them. Modern-day booms are the products of low interest rates and easy credit. People overborrow, overpay and overindulge. They love the things that borrowed money buys, but the debts become insupportable. Then the assets, or some of them, must go. A little selling — of houses, cars, companies, stocks — becomes a lot, and the next thing you know we’re talking about nationalizing Citigroup.Wishing that this weren’t happening to them, hopeful business people and homeowners resist making necessary adjustments. Some refuse to sell the house they can’t afford Others won’t think of selling the stocks for which they paid what seemed a reasonable price only last year but which are one-half of that reasonable price today.Today’s low prices, painful though they may be, are the market’s own shovel-ready stimulus. Before you know it, the stock market, and the residential real-estate market, too, will be on their way back up again — just don’t ask when.James Grant is the editor of Grant’s Interest Rate Observer and the author, most recently, of “Mr. Market Miscalculates.”http://www.nytimes.com/2009/03/01/opinion/01grant.html?_r=1

@ plongka10Agree … use DRS(Direct Registration System) for everything you can! At least the issuer of the security also knows your participation amount.

New Thread

Prof. Roubini states that GDP in Germany had contracted 8% in Q4/2008. The official numbers don’t show this large drop, but only a modest decline.http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Content/Statistics/TimeSeries/EconomicIndicators/NationalAccounts/Content75/vgr111ga.psml

Roubini is quoting annualised numbers – so a 2.1% quarterly drop in Germany annualises to around 8% over a full year.

I agree. The people seem to get it but our goverment does not. Stimulation is good but just throwing money around doesn’t seem too frugal to me.-Fredhttp://www.acclaiminvesting.com

No way mister….GM is about to roar back its way to the top of the Industry. I mean come on GM always seems to save our tails, I say, Detroit 3 ALL THE WAY!

GM is insolvent. the best remedy is to allow it to enter bankruptcy and remove all power from the UAW. this will not happen under the current administration

I don’t read this article as calling for throwing more money into the fire. In fact it seems clear that the good Doctor is decrying this as a waste of money. He wants the money to go to people, and not the banks.

.BORROW MONEY … WHO FROM ????.Follow the thread :1) – Considering that China surpluses are sharply tumbling, who on Earth is going to keep on buying US-TBonds to finance the current existing debt? ( and so are Japan, Russia, Brazil, India – the ones who used to have surpluses …).2) – When deficit was 400 bi in Sept ’08, it was already difficult… and since then, Fed had to quietly step in and buy it, through “dealears” …3) – Now that deficit baloons to trillions, I ask again … WHO DA HELL is gonna buy this junk????4) – Therefore, da Fed is gonna be the ONLY buyer !!! ( by da way, thus owning da US …)5) – In order to do so, da Fed’s raising “quantitative easing” will have go ballistic !!! Printing bills at overdrive warp speed, and diluting USD even more !!!6) – Thus said … Why won’t US-Tbonds investors dump a falling asset, then ?????????? Huh ???Why not ??? For da good of da country ????7) – In 48 hours, a cataclismic collapse of entire USTbonds System !!!8) – To catch a falling knife, desperate Obama orders a “bank holiday”, and defaults the USTbonds !!!9) – And then refuses to accept worthless dollars dumped back into da US from foreigners, in a desperate attempt 2 buy properties here !!!10) – He then replaces dead dollar by a new currency ( … guess which? from Denver Mint, huh? … ), at 10 to 1 !!!11) – And that is the real B.O.D.U. – Bottom Of Da Universe !!!12) – Next day, business as usual, but … in order 2 buy goods abroad – oil & food – da US will have to pay in a currency other than useless dollars !!! e.g. gold, companies, carriers, jet fighters, etc. A GENERAL SELL OFF OF DA US !!!13) – Then – and only then – fat cats US Sheeple will jump off the couch in fury, and … hang ‘em !!!*****Can anybody here answer this :Why is “Denial” the only answer to “Truth”?Why is “Hope” so powerfull that people choose to remain an ostrich?Who is calling me a “conspiracy theorist” now? Anybody?Francisco Almeidacomexfrancisco@yahoo.com.br..

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