U.S. Job Report Suggests that Green Shoots are Mostly Yellow Weeds
The June employment report suggests that the alleged ‘green shoots’ are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10 percent by later this summer, around August or September, and will be closer to 10.5 percent if not 11 percent by year-end. I expect the unemployment rate is going to peak at around 11 percent at some point in 2010, well above historical standards for even severe recessions.
It’s clear that even if the recession were to be over anytime soon – and it’s not going to be over before the end of the year – job losses are going to continue for at least another year and a half. Historically, during the last two recessions, job losses continued for at least a year and a half after the recession was over. During the 2001 recession, the recession was over in November 2001, and job losses continued through August 2003 for a cumulative loss of jobs of over 5 million; this time we are already seeing more than 6 million job losses and the recession is not over.
The details of the unemployment report are even worse than the headline. Not only are there large job losses right now, but as a way of sharing the pain, firms are inducing workers to reduce hours and hourly wages. Therefore, when we’re looking at the effect of the labor market on labor income, we should consider that the total value of labor income is the product of jobs, hours, and average hourly wages – and that all three elements are falling right now. So the effect on labor income is much more significant than job losses alone.
The details also suggest that other aspects of the labor markets are worsening. If you include discouraged workers and partially-employed workers, the unemployment rate is already above 16 percent. If you consider also that temporary jobs are falling now quite sharply, labor market conditions are becoming worse. And the average duration of unemployment now is at an all-time high. So people not only are losing jobs, but they’re finding it harder to find new jobs. So every element of the labor market is worsening.
The unemployment rate rose only marginally from 9.4 percent to 9.5 percent, but that’s because so many people are discouraged that they exited the labor force voluntarily, and therefore are not counted in the official unemployment rate.
The other element of the report that must be considered is that, for the summer, the Bureau of Labor Statistics (BLS) is still adding between 150,000 and 200,000 jobs based on the birth/death model. We know the distortions of the birth/death model – that in a recession jobs created within firms are much smaller than those created by firms that are dying. So that’s distorting downward the number of job losses. Based on the initial claims for unemployment benefits, it’s more likely that the job losses are closer to 600,000 per month rather than the figures officially reported.
These job losses are going to have a significant effect on consumer confidence and consumption in the months ahead. We’ve also seen extreme weakness in consumption. There was a boost in retail sales and real personal consumption-spending in January and February, sparked by sales following the holiday season, but the numbers from April, May, and now June are extremely weak in real terms. In April and May you saw a significant increase in real personal income only because of tax rebates and unemployment benefits. In April, there was a sharp fall in real personal spending, and in May the increase was only marginal in real terms.
This suggests that the most of the tax rebates are being saved rather than consumed. The same thing happened last year. Last year, with a $100 billion tax rebate, only thirty cents on the dollar were spent while seventy cents on the dollar were saved. Last year, people expected the tax rebate to stimulate consumption through September. Instead, there was an increase in April, May, and June, with the increase fizzling out by July.
This year it’s even worse. We have another $100 billion in tax rebates in the pipeline. But the numbers suggest that in April, real consumption fell. And in May it was practically flat. So this year households are even more worried than they were last year about jobs, income, credit cards and mortgages. Most likely only around 20 cents on the dollar – rather than 30 cents last year – of that increase of income is going to be spent. In any case, that increase in income is just temporary and is going to fizzle out by the summer. So you can expect a significant further reduction in consumption in the fall after the effects of the tax rebates fade.
The other important aspect of the labor market is that if the unemployment rate is going to peak around 11 percent next year, the expected losses for banks on their loans and securities are going to be much higher than the ones estimated in the recent stress tests. You plug an unemployment rate of 11 percent in any model of loan losses and recovery rates and you get very ugly losses for subprime, near-prime, prime, home equity loan lines, credit cards, auto loans, student loans, leverage loans, and commercial loans – much bigger numbers than what the stress tests projected.
In the stress tests, the average unemployment rate next year was assumed to be 10.3 percent in the most adverse scenario. We’ll be already at 10.3 percent by the fall or the winter of this year, and certainly well above that and close to 11% at some point next year.
So these very weak conditions in the labor market suggest problems for the U.S. consumer, but also significant increasing problems for the banking system as these sharp increases in job losses lead to further delinquencies on loans and securities and lower than expected recovery rates.
The latest figures – published this week – on mortgage delinquencies and foreclosures suggest a spike not only in subprime and near-prime delinquencies, but now also on prime mortgages. So the problems of the economy are significantly affecting the banking system. Even if for a couple of other quarters banks are going to use the new Financial Accounting Standards Board (FASB) rules and under-provisioning for loan losses to report better-than-expected results, by Q4, with unemployment rates above 10 percent, that short-term accounting fudging will have a significant impact on reported earnings. And this will show the underlying weakness in the economy. So banks may fudge it for a couple of other quarters, but eventually the effects of very sharp unemployment rates and still sharply falling home prices are going to drag down earnings and have a sharp effect on losses and capital needs of the banks and of the entire financial system.
Essentially, the results today suggested that there are not as many green shoots. These green shoots, as we’ve argued, are mostly yellow weeds that may even turn into brown manure if a double dip W-shaped recession occurs in 2010-2011. And it’s not just the employment situation. Real consumption and retail sales remain weak. Industrial production remains weak. The housing market, in terms of price adjustment, remains weak, even if the quantities – demand and supply – may be closer to bottoming out. Indeed, the inventory of unsold new homes is so large that you could stop producing new homes for almost a year to get rid of that inventory. Moreover, about 50% of existing home sales are distressed sales (short sales and foreclosed homes).
The labor market conditions may have a significant effect on how long it takes for the housing market to bottom out. It’s already estimated that by the end of this year, there will be about 8.4 million people who have a mortgage who have lost jobs, and therefore have essentially little income. Therefore, the number of people who will have difficulties servicing their mortgages is going to rise very sharply.
Home prices have already fallen from their peak by about 30 percent. Based on our analysis, they are going to fall by at least 40 percent from their peak, and more likely 45 percent, before they bottom out. They are still falling at an annualized rate of over 18 percent. That fall of at least 40-45% percent of home prices from their peak is going to imply that about half of all households that have a mortgage – about 25 million of the 51 million that have mortgages – are going to be underwater with negative equity in their homes, and therefore will have a significant incentive to just walk away from their homes.
The job market report is essentially the tip of the iceberg. It’s a significant signal of the weaknesses in the economy. It affects consumer confidence. It affects labor income. It affects consumption. It affects the willingness of firms to start increasing production. It has significant consequences of the housing market. And it has significant consequences, of course, on the banking system.
Overall, it’s an extremely weak report and suggests that weakness in the labor markets is going to continue, and that the recession is more likely to continue through the end of the year and the beginning of next year. It also suggests that recovery will be anemic, subpar, below trend. We are still estimating that U.S. growth next year is going to be 1 percent above the 2009 level, well below a potential growth rate of 3 percent. This is because there is little deleveraging of households, corporate firms and financial institutions while there is a massive re-leveraging of the public sector with sharply rising deficits and debts as many of the private losses have been socialized.
There are also signs that there may be forces leading to a double-dip recession, sometime toward the second half of next year or towards 2011. If oil prices rise too much, too fast, too soon, that’s going to have a negative effect on trade and real disposable income in oil-importing countries (US, Europe, Japan, China, etc.). Also concerns about unsustainable budget deficits are high and are going to remain high, with growth anemic and unemployment rising. These deficits are already pushing long-term interest rates higher as investors worry about medium- to long-term stability. If these budget deficits are going to continue to be monetized, eventually, toward the end of next year, you are going to have a sharp increase in expected inflation – after three years of deflationary pressures – that’s going to push interest rates even higher.
For the time being, of course, there are massive deflationary pressures in the economy: the slack in the goods markets, with demand falling relative to supply-and-excess capacity. The rising slack in labor markets, which are controlling wages and labor costs and pushing them down, implies that deflationary pressures are going to be dominant this year and next year.
But eventually, large budget deficits and their monetization are going to lead – towards the end of next year and in 2011 – to an increase in expected inflation that may lead to a further increase in ten-year treasuries and other long-term government bond yields, and thus mortgage and private-market rates. Together with higher oil prices driven up in part by this wall of liquidity rather than fundamentals alone, this could be a double whammy that could push the economy into a double-dip or W-shaped recession by late 2010 or 2011. So the outlook for the US and global economy remains extremely weak ahead. The recent rally in global equities, commodities and credit may soon fizzle out as an onslaught of worse- than-expected macro, earnings and financial news take a toll on this rally, which has gotten way ahead of improvement in actual macro data.
483 Responses to “U.S. Job Report Suggests that Green Shoots are Mostly Yellow Weeds”
Mr Roubini is the best:)
Pretty much a “just the facts ma’am” summarization. The economy is just going to whither on the vine for the next few years…decades?
I saw a bank analyst on Bloomberg the other day say that banks were projecting a large percentage of their profits from their trading activities. After all they have to lend to benefit from the spreads and their existing portfolios are being hammered by the defaults.Goldman S has certainly done well with its trading. I have to wonder, with all the ex Goldman employees in so many strategic positions in government and the fed, if a/ we will ever get real reforms and b/ if there isn’t a significant amount of insider playing.
GOOD POINT DR ROUBINIPossible inflation in debt treasuries in the next year or two equals mortgage interest rate increases.Still equates to more deflation in home prices with chronic unemployment and wage depression?
I just don’t see stabilization. This latest rally is probably no different than the rally after the 1929 crash where there was a 50% replacement rally before the next longer leg down.My real estate office is busier than I expected. Mostly foreclosures and short sales. Not a good time to be a regular seller. Hard to compete with the banks who really just want to unload. Which means they know there is much more to come or they wouldn’t be so eager to take deals that are seem sweet for the buyers. Time will tell if they were. I suspect they won’t look so great after a couple of years have gone by.The process of private debt substituted for public debt is able to fund these transactions and I am glad as if it wasn’t there, I don’t know where the sales would come from and the economy would look and be much worse. I don’t know what the long term costs of this transfer is going to be but my brain is telling me that it will not be wonderful.I have said this before but this is probably a grand K wave down as in the Kondratieff studies. Maybe Big Ben is smart and maybe his and Geithner’s plans will work but so far all that appears to have happened is for the government to have fertilized fallow fields which are growing green weeds, not real food or fiber or anything else valuable. I am still mostly in cash. I played a little of the rally with ETFs and have a little short in DUG, SDD and QID as of yesterday. I’m thinking window dressing done and earnings reports to start next week and that weeds are really not very valuable.Glad to have a new thread. Thanks Nouriel. And thank you for our access and your research and thoughts. They are very helpful and informative.
Green Shoots = Green FungusDavid Rosenberg had good interview this week in theCNBC where he said that situation will deteriorate. A lot of employers have reduced working hours and if there is improvement in the economy there would NOT be any new jobs created as the employers will just increase hours for existing workers.
So banks may fudge it for a couple of other quarters, but eventually the effects of very sharp unemployment rates and still sharply falling home prices are going to drag down earnings and have a sharp effect on losses and capital needs of the banks and of the entire financial system.
The BLACK SWAN sees a similar outcome…We Are In The Middle of A CrashHeaded for a JOB experience – that fellow in the Old Testament who lost everything and sat on a dung hill covered in sores and boils.
I officially declare you the FIRSTO! Thanks for your cooperation!But, Professor Roubini knows very well that these rallies are all pure freak. They are nourished by hedge-funds in total desesperation, pressed by their also desesperated clients – risk levels are terrible and will turn manifest soon. In my Country we said about this picture: “It’s the last dance of the Fiscal Island!”Near Colapse, very near!
So if the economy continues to contract from lower incomes of the productive class and higher interest rates plus some commodities inflation then how is this cycle going to end? Will we finally just wipe out most of the existing mortgages? Re-write them much lower. Continually until the wages and housing match? But that doesn’t work as we continue to have lower consumption spending forcing more and more out of work.Where is the bottom to all this?Seems to me that the bottom won’t come for a long time and not until a/ we’ve written down or off much of our consumer debt and b/ until the trade imbalance with China over job incomes is turned positive in our direction. This will require much higher fuel prices on the international level and what? Lowering of our environmental standards? Or our wages so cheap that we can compete with the Chinese worker?Again, what does the bottom look like?Definitely interesting times… as long as you have food, shelter and can stay warm.
The Unemployment Rate and Non Farm Payrolls are regarded as lagging indicators. However, Dr. Roubini has confirmed my view that they have become a leading indicator. What is happening currently in the labour markets is having a huge impact on the economy going forward. Without jobs, it is impossible to grow an economy that is made up mainly, about 70%, of personal consumption. It is difficult to see the housing market problems stabilise without getting employment stabilised. Job losses today mean a weaker economy and more job losses tomorrow.
JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS – FLASH UPDATE – July 2, 2009June Jobs Loss Was 513,000 Net of Concurrent Seasonal Factor BiasLikely Topped 700,000 with Birth-Death MachinationsPayroll Employment Growth Overstatement Could Top 2.5 MillionPer Year with Birth-Death ModelingAnnual Payroll Decline Deepened to 4.2%Equal to 1958 Trough and Near 1949 TroughSGS Unemployment Numbers at 20.6%
Morbid,Have you invested in puts?
No.I will never enter the giant Ponzi scheme Casino again.
Some (including Gary Schilling) have argued that the government’s largess to the banks is not really inflationary, because the banks aren’t lending and few creditworthy individuals are trying to borrow. In other words,the money is traped inside the banks and can’t get out. But this arguement ignores the fact that most large banks are now composites of traditional banking enterprises, which are struggling to avoid losses, and trading entities, which must be relied upon for profits. The trading entities speculate in commodities and other assets classes, essentially using government funds as collateral. All of this makes the fed’s actions highly inflationary.
Sorry, typo. I meant individuals AREN’T trying to borrow.
The employment ratio is still plunging. 59.5% in June. The St. Louis Fed has a great chart on this.We are in the midst of a permanent downward slid in the US standard of living.This is unprecedented.
Hi Giraf. I agree with you. The number I can’t get out of my head is the 350% Debt/GDP. I can’t imagine any improvement in the economy or job situation until it markedly improves.
Here we go folks, buckle up.if we close below 8300 today -downward spiral will be in progress to 6500 by august.Reply to this comment By Guest on 2009-07-02 14:04:20
Gloomy, I’ve been wondering a lot about that 350% number. That can’t be accurate any more. We have been quoting that number for about a year. GDP has declined since then (3% decline in GDP would already push that number up to 360%), and debt has skyrocketed.I wonder if anyone has a more current number?–Brian
NYSE GLITCH! TRADING EXTENDEDThe plunge protection needs until 4:15 to turn this market around….
This argument also ignores the fact that the money can and will get out in the future.I hate these idiots who can only see what is happening right in front of them today. What will all this cash do in 2 years? How is it removed before it hits the real economy? In time, exchanging hard assets for liquid cash will always be inflationary. All it takes are for conditions to change. And conditions always change.And then, Gary Schilling and all the other pundits will say, “How could anyone have foreseen this?” Really?–Brian
@Gloomy and Brian.When you refer to the 350% debt to GDP ratio, what debt are you looking at?
Me neither, unless I dispose of a ‘GPS’.(Goldman Positioning System)
Many have called President Obama’s stimulus plan a return to Keynesian policy. Some of us who like reading Keynes professionally or for leisure have already been scratching our heads. I have wondered in particular whether the plan isn’t set up to work in a manner completely backwards from what Keynes himself had in mind when he advocated economic stabilization by government.There are two things to remember about Keynes’s fiscal policy proposals: 1) government spending was always linked to the goal of full employment (the absence of both cyclical and structural unemployment) and 2) to achieve macro-stability and full employment, the government had to employ the unemployed directly into public works.Read more here:http://neweconomicperspectives.blogspot.com/2009/07/message-to-president-obama-stop-priming.html
Gentelmen, don’t invest in ‘time’ dependant issues like Puts or Calls … just short the market and wait!
I’ve read 375% for Q1, 09. Also average over time was around 140-160%.
Total US debt – consumer, company and government.
Or, how about this one: When GS is the ONLY player left standing how is it going to make money?Mark
Hey Econ, perhaps you know the answer to my question that I haven’t been able to get answered (for an eternity now):Are banks on the hook for property taxes on foreclosed properties?Mark
The good folks at Zero Hedge are thinking the same way as you, and the good news is they are doing something about it. See the email below from yesterday. The only way ‘we the people’ can get control of things again is to stand up and be counted. Let’s pray that enough are willing.”After observing the complete lack of enforcement activity by traditional regulators such as the SEC and FINRA, in a time when even regulatory insiders have notified us about a culture of utter and incomprehensible complacency, Zero Hedge has recently initiated a “whistleblower” program in which we appeal directly to industry insiders.http://www.zerohedge.com/node/988Having received hundreds of unsolicited emails from people embedded deep in the various layers of the capital markets and financial advisory services, we have decided to proactively appeal to the conscience of all those who see wrongdoing unfold before their eyes, yet are powerless to do anything for fear of retaliation.We will henceforth provide an anonymous venue where we will compile, filter and distribute actionable data to appropriate forums such as FBI branch offices, regional Attorney Generals, the U.S. Senate Permanent Subcommittee on Investigations, and the offices of Alan Grayson, Tom Harkin and Brad Sherman. We may also publicly disclose conclusive data via Zero Hedge and other media outlets.In an attempt to proceed with this venture unhindered, Zero Hedge has now moved both its server and ISP offshore, where the chance of malicious intervention is substantially mitigated.http://www.zerohedge.com/As this grassroots campaign can only succeed if the general population is aware of its existence, we appeal to readers everywhere to spread the word. If our appointed officials and their crony organizations will not protect the “little” investor, it is our responsibility to uncover dishonest, illicit and illegal acts (and in the process remove those whom we have voted into power, who refuse to do the right thing).Tyler DurdenZero HedgeIndependent Contractor
I’ve seen estimates around 300% currently (a 17% decrease), based upon the fact that public debt expansion has been substantialy less than private debt contraction. The role of “strange quarks” like the $850 billion the Fed created out of thin air – expanding its balance sheet – and parked in the “excess reserves” of TBTF banks (and upon which it is paying $25 billion/year in interest) for the sole purpose of making these insolvent banks officially solvent (no intended lending of that money to the world of commerce) is not clear: they have “deleveraged” those banks by giving them capital, but their stated intent is to withdraw that capital “someday.” Summary: private and public finance is intentionally opaque, so don’t try to predict general outcomes based on specific data supplied by the financial industry, the Fed, or the Treasury.
“The June employment report suggests that the alleged ‘green shoots’ are mostly yellow weeds that may eventually turn into brown manure.”This is your best line ever. lol.
Yes – food, clothing, and warm shelter, but don’t worry….you will have health care, too.Independent Contractor
depends on the local tax agency. some areas yes, some areas no and some areas the foreclosed owner still is even if they don’t live there
I still don’t see how we can have inflation when the public doesn’t have any money. Using the standard “Too many dollar chasing too few goods,” is there really a chance of this happening anytime, soon. If so, shouldn’t homeowners just hold on to their value deflated houses, as they will soon reinflate? Or do houses not count in this inflation scenario.
I am not an economist, but from what I recall of Keynes, he was a pretty decent guy and not intent on milking the sheeple of every last dime they have to bail out the most corrupt among us. This may be Goldmanism, Geithnerism, Bernakeism, or some other ism, but I would not call it Keynesian. How about lootism?Independent Contractor
From the good Doctor’s post above:”Home prices have already fallen from their peak by about 27 percent. Based on our analysis, they are going to fall by at least another 40 percent, and more likely 45 percent, before they bottom out. They are still falling at an annualized rate of over 18 percent. That fall of at least 40-45% percent of home prices from their peak is going to imply that about half of all households that have a mortgage – about 25 million of the 51 million that have mortgages – are going to be underwater with negative equity in their homes, and therefore will have a significant incentive to just walk away from their homes.”For the sake of clarity, is he saying prices have dropped 27% with another 40-45% more to fall, as implied in the first 2 sentences, or does he mean a total of 40-45% from peak to trough as implied later? I believe he means a total of 40-45%. I sure hope so! 27% + 40% = 67%, which gives that $500K McMansion a revised value of $167K. Pretty tough making payments of $3-4K/mo on a 167K property. Don’t even start to think about what all of this is going to mean to state and local tax values and collections. Can you say SHARPLY reduced services?Independent Contractor
The only insight I have seen on this is the story about people mailing the keys back and the bank refuses to foreclose on the property. Then the tax bills keep going to the “still” owner even though they have abandoned the property. The banks have done this as far as I know (which isn’t much) only if the property is so far under water that it is a complete write-off.Here is one of many sites where you can read about such a thing.Mortgage Companies Refusing Foreclosure When Borrower Stops Paying
In today’s market the mortgage company is probably going to ignore the fact that the borrower has not made the payments. The amount of time that the lender will ignore the non-payments will depend on several factors. What condition is the house in? If the property is in poor condition or has a small value then the mortgage company will be less likely to foreclose because they do not want to take care of the property. How many properties are being sold in that particular area? If the properties are not moving than the mortgage company is less likely to foreclose because this reduces their chances of selling the property to a third party. What is the amount of the taxes due and owing for the property?Keep in mind that mortgage company wants to make money on the deal, not lose even more money by paying the back property taxes. So the mortgage company will delay as long a possible to foreclose hoping that the borrower will pay the back taxes or that the taxes will be paid if the property is sold to a third party.
Great work Dr Roubini. I am hopeful that some sense will come back and allow the average Joe to get a property from good hard honest work. These bankers and financers should lose their ill gotten gains in a painful and shameful manner. Let prices crash to 70% from their peak! Also has anyone heard that OPEC plan to chase oil to $475 a barrel to cover their loses in the US?Mark RubinsteinCo-operative
What does the bottom look like? Have you ever gone camping? Like that. When will we reach the bottom? Ah, thats the question.
Look, its all over but the talking. The downslope won’t be straight down, but it will be down. We will haveto adjust to a new standard of living.
Gentlemen? I’m a she. Is it still okay for me to short the market?
And I thought they had all made a mad dash to the Hampton’s at noon to begin their holiday weekend. Maybe the big dogs did leave and left the grunts in charge to man the ship.
Brown manure is great for the tomatoes! At least some good will come from these green shoots/yellow weeds.
IMO, Rubin’s insolvent Citibank, pretending to be capitalized, is an example of where the banking system and America are today. Banking is not a harbinger of recovery; it is a harbinger of crisis, of collapse. And, typical of the mentality of this banking system, at the same time it’s getting bailouts, it’s giving itself bonuses.To think America is going to come out of this stronger is something I don’t believe. Barron’s weekly bargains have become a cruel joke. Entrepreneurs, sorting through the debris, thought the one bright light on the business horizon would be energy. But who was there when they arrived? Why, the investment bankers, and the politicians with their fake green economy.There was a time in America when a Conrad Hilton could take a look around the country, decide what was needed and found, say, a chain of Hilton hotels on the basis of insightful market supply and demand. There was a time not long ago when honest people working for a future and honest businessmen paying them for what they produced could become prosperous and grow the economy. Not now. Bernanke and the Goldmans are there with their inflated stocks and money machine and manipulated markets, with their rules and regulations altered in their favor, with their lobbyists in Congress to hammer the unwelcome with fees and twist their dreams into nightmares. Why, you ask, are there are so few start-ups these past four or five years? One reason is because of the investment bank sharks; because no one wants to face this devouring prey that swallows all competition, that in the end will destroy you or own you, if it so wishes.America, IMO, is in the last chapter of this 21st century economic nightmare. America’s unemployment is not just a recession correction. It’s the result of predatory leviathans outsourcing jobs to low-wage plantations and opening the nation’s borders to illegals to replace American workers. It’s a re-ordering of the workforce and the re-structuring of the business landscape and the interference of big government to accommodate new monolithic corporate greed.Oh, how our government and newspeak media joked and jeered—and stood “firm”– when we lost GM and Chrysler, and the median value of a home in Detroit dropped to $6,000. Oh, how cavalierly they taxed our neighbors to pay our unemployment benefits and forgot about us when our benefits ran out. Oh, how Goldman Sachs and JP Morgan and Morgan Stanley rushed back to China to work out more profitable self-serving deals with the Red Chinese, never caring or understanding the wheel, the American farmers’ stewardship of the land, the pollution in China, the dung, the undrinkable sewage, all the while winking at our diminishing freedoms and lowering standard of living.But truth will out fraud and force. And it has begun, exponentially at an increasing rate these past few week– with the Nouriel Roubinis, the Matt Taibbis, the Tyler Durdens, the Henry Lius, the Hugh Hendrys, the Marc Fabers, the Lew Rockwells, the Michael Hudsons, the Peter Schiffs, the Alexander Cockburns, the Mike Whitneys, the Alan Abelsons—just to name a few from NR’s recent posts. And last but not least, of course, the people, here, on this blog.
Actually, to be technically correct, we should both have referred to the waste as brown compost. I think manure refers to animal waste.:)
The article says he expects housing prices to fall 40-45 percent from their peak. The additional 40-45 percent further decline probably means 1.40 or 1.45 times the 27 percent decline up to now, which calculates to about a 38-39 percent total decline from the housing peak, which is probably intended to be a conservative estimate.
“. . . Even if for a couple of other quarters banks are going to use the new Financial Accounting Standards Board (FASB) rules and under-provisioning for loan losses to report better-than-expected [i.e., fudged] results, by Q4, with . . . .”It’s amazing how quickly the mark-to-market issue disappeared from the financial media right after FASB enabled the banks to avoid including the fair market value of their toxic assets on their earnings reports. Roubini’s article here is the first time I’ve noticed any mention of it since March.
MAKE BERNIE MADOFF THE NEXT FED CHAIRMANHe’d fit right in, says Bill Bonnerhttp://www.lewrockwell.com/ EXCERPTPoor Bernie. The man has been ordered to spend 150 years in the hoosegow. What for? Who did he kill? A century and a half seems a little excessive for a financial crime. You could hold up three liquor stores and rape a whole convent and still not get 150 years. With a little bit of good lawyer-ing, a history of child abuse in the family, and good behavior in the big house, you’d be back on the street in 18 months.But all the papers seem delighted. “Locked up for Life!” says one of today’s headlines. The judge “threw the book at him,” says another. His victims wanted him to get no mercy. The judge gave him none, imposing the maximum sentence. He is “extraordinarily evil,” said the man on the bench.Justice has been done. Right?Here in the building with the gold balls on the roof, we’re not so sure. We stand up for lost causes…die hards…and scalawags. Besides, we’re not convinced that Bernie is extraordinarily evil at all. He seems much more like an ordinary evil to us.They say he defrauded investors out of $65 billion. The amount is unusual, but the crime is as common as income tax evasion. Who gets 150 years for evading income taxes? Heck, in civilized countries it’s not a crime at all – but a civil misdemeanor, subject to fine and retribution, not punishment.But didn’t he lie to investors? Well, yes…he exaggerated the returns investors were likely to get from his fund. But if you put every fellow on Wall Street who does that in jail, you wouldn’t have any room for stick-up men and wife beaters.Isn’t he the biggest financial scammer of all time? Well…he’s the title-holder now. But he has a lot of competition close on his heels. Bernie’s crime was taking money from people under false pretenses…and then being unable to give it back to them. How is that different from the financing activities of the US government?This year alone, the feds will borrow 50 times as much money as Bernie managed to take in during his whole 20-year career. They can only pay it back by borrowing even more money from more lenders. This is not very different from the typical “Ponzi” scheme, except that it’s the government doing it. Eventually, the suckers are going to lose a lot of money.And when you balance Bernie’s sins against his virtues, we’re not sure the man doesn’t come out at least as well as many of his accusers. While Bernie was pretending to make his investors rich, the SEC was pretending to protect them from Bernie. In fact, neither were really doing what they claimed. Which is to say, both are guilty of ordinary evil.As we pointed out yesterday, nothing is as dangerous as good luck. Madoff was not extraordinarily evil; he was just extraordinarily lucky. He was plying his trade when the feds were pumping up the biggest financial bubble in history. No wonder so much hot gas came his way. His luck ran out when the bubble popped. And now a court has found him guilty of fraud and a judge has ordered him locked up for a period equal to roughly the time between the end of the US War Between the States and the resignation of Richard Nixon.While Bernie is behind bars, the SEC and FED officials are still at large. Both are clearly guilty of dereliction and negligence.But, what is the point of keeping Madoff in prison? He represents no threat. Rather than pay $30,000 per year to keep him locked up, we suggest that he be forced to do community service work. He should be pressed into service as the next head of the Federal Reserve after Ben Bernanke’s term expires in December. With Madoff in the big office, there would be no longer any illusions about what sort of bank the Fed is running…Well, life is not exactly under our control. We doubt that a group of Argentines ever got together and decided to become a second rate country. Things happen.
Gentlemen tend to short the markets standing up, Ladies sitting down.
Unless they’re suckers, you know, like in corn–shoots from the root, diverting nourishment from the body of the plant.
9/30/2008 Debt = $51.796 Trillion———————————————— = 359.4%9/30/2008 GDP = $14.413 Trillionhttp://pix.cs.olemiss.edu/econ/gdp2DebtRatio2009.pdf
Advanta has shut down all of it credit card accounts.https://www.advanta.com/ADVIn May 2009, the company announced it was closing all 1 million of its small business credit card accounts, and exiting the credit card business as of June 1. In early June, regulators refused to allow Advanta to improve its balance sheet by buying back $1.4 billion of its senior debt notes at a discount. Advanta had planned to pay between 65 percent and 75 percent of the face value of the notes.http://en.wikipedia.org/wiki/AdvantaThe buzz is that it only has a few months left.https://www.advanta.com/
Well, we must be generous. As Mises put it:“Lord Keynes’s doctrines did not add any new idea to the body of inflationist fallacies, a thousand times refuted by economists. His teachings were even more contradictory and inconsistent than those of his predecessors who, like Silvio Gesell, were dismissed as monetary cranks. He merely knew how to cloak the plea for inflation and credit expansion in the sophisticated terminology of mathematical economics.“The interventionist writers were at a loss to advance plausible arguments in favor of the policy of reckless spending; they simply could not find a case against the economic theorem concerning institutional unemployment. In this juncture they greeted the ‘Keynesian Revolution’ with the verses of Wordsworth: ‘Bliss was it in that dawn to be alive, but to be young was very heaven.’”Adds Mises, “It was, however, a short-run heaven only…” but this does not “excuse authors who tried to provide a would-be scientific justification for the crudest of all popular fallacies, viz., inflationism.” HUMAN ACTION: A TREATISE ON ECONOMICS, p. 793.
Seven more banks close this week and it’s not even Friday? I guess the Feds at FDIC are taking a early weekend with the 4th and all.Founders Bank Worth IL 18390 July 2, 2009 July 2, 2009Millennium State Bank of Texas Dallas TX 57667 July 2, 2009 July 2, 2009First National Bank of Danville Danville IL 3644 July 2, 2009 July 2, 2009Elizabeth State Bank Elizabeth IL 9262 July 2, 2009 July 2, 2009Rock River Bank Oregon IL 15302 July 2, 2009 July 2, 2009First State Bank of Winchester Winchester IL 11710 July 2, 2009 July 2, 2009John Warner Bank Clinton IL 12093 July 2, 2009 July 2, 2009So that is 15 bank failures in three weeks!http://www.fdic.gov/bank/individual/failed/banklist.html
6 in Illinois?
“This is because there is little deleveraging of households, corporate firms and financial institutions while there is a massive re-leveraging of the public sector…”What is the basis of the “little deleveraging” claim? From the latest Fed Flow of Funds (Z1) for Q1 2009, adding up the numbers from table “D.2 Borrowing by Sector” suggests that total borrowing contracted at an annual rate of 255 billion in Q1, even when you include expansion of government debt.“…increase in expected inflation that may lead to a further increase in ten-year treasuries and other long-term government bond yields…”Unless private sector deleveraging truly can be stopped, which seems very unlikely, this runs counter to the experience of falling yields in both post 1990 Japan (high government intervention) and the US during the Great Depression (more liquidation). So why should this experience be different with respect to the medium term direction of government bond yields?
Mine was one of those accounts. Found out about the impending closure in advance from reading the financial press. Contacted their call center, and was told something like, “Yes it’s true.” Anything else we can help you with.” Got an email before Memorial Day weekend. They supposedly shut off all credit card accounts to new lending within a week–earlier than the date reported. This company catered to small business owners. Consider the implications for this job-creating/sustaining sector. Goodbye short-term liquidity. Good-bye jobs.
I guess that the cost of most everything can go up while incomes are going down.By giving all the money to the big institutions, they will use it to run up commodities values. They already said they were going to do that because that is where they said that their income was already coming from.Is this the Bernanke/Geithner/Sommers plan? The benefits of the bail outs have serious consequences. And they don’t appear to have recovery in them, just in their language.The real plan is to make serfs out of the American middle class by transferring all the wealth and power to the few TBTF institutions. To bad Obama has no backbone or is it just a total lack of understanding?
Green shoots of weeds grow pretty well when fertilized and watered. They can go to seed and infect the surrounding fields causing the other farmers to spend significant resources trying to eradicate them.From a distance, the green weeds can even look like productive fields but they not only do not produce useful products but also act to degenerate the adjacent crops. If this continues to expand, we will have nothing but green weeds and no food or fiber (no jobs or ability to pay taxes or make payments).In other words, money borrowed and spent on consumption or speculation does not generate anything of value. It may add to the GDP but that is a misnomer. In the end this stupid practice of funding the TBTF institutions is going to destroy all the underlying supporting value added enterprise in this country. Just like water and fertilizing fields of weeds.
Nouriel Roubini gives more comprehensive overviews and more significant analyses of the American economy than all the nation’s economists combined and rattles them off like letters to home. It never ceases to amaze me that “home” includes me.It’s like having a brother who’s adviser to the king and comes home to dinner once a week and takes the family into his confidence. It was Pharoah who put Joseph in charge of the land of Egypt for prophesying seven fat years to be followed by seven lean years, enabling Pharoah to save a little bit of each year’s good harvest, to get through the bad years.That said, with this “U.S. Job Report…” Roubini has exceeded even himself. Every graf is a many-faceted diamond of flawless economic clarity. Suffice to say, I believe Dr. Roubini is going back to Dr. No, at least for the near term. The main thing he does is to point out how bad the numbers really are and their serious ramifications. Says Roubini:“The job market report is essentially the tip of the iceberg. It’s a significant signal of the weaknesses in the economy. It affects consumer confidence. It affects labor income. It affects consumption. It affects the willingness of firms to start increasing production. It has significant consequences on the housing market. And it has significant consequences, of course, on the banking system.In short, it’s a very serious jobs report, with “massive deflationary pressures in the economy…dominant this year and next year. But eventually, large budget deficits and their monetization are going to lead—toward the end of next year and in 2011—to an increase in expected inflation that may lead to further increases in…mortgage and private-market rates…[that] together with higher oil prices driven up in part by this wall of liquidity, rather than fundamentals along, could be a double whammy that could push the economy into a double-dip or W-shaped recession by late 2010 or 2011.”
It’s always enlightening to be advised of economic implications from a professor of law and director of the Business Law Center at Loyola University of Chicago School of Law—especially one such as yourself who has served as a Senior Attorney for the Resolution Trust Corporation and as an Enforcement Attorney with the Securities and Exchange Commission and who teaches a Securities Litigation Seminar, as well as other business related classes. And, one who has published extensively in the areas of corporate governance and financial regulation, including the impact off the Sarbanes-Oxley Act of 2002.I agree that America is in “unprecedented” territory and I lay the blame of the “permanent downward slide” in the standard of living of this great nation squarely at the door of the U.S. Congress. God help us.
Manhattan Apartment Prices Drop as Lehman Hits HomeJuly 2 (Bloomberg) — Manhattan apartment prices dropped for the first time since 2002 in the second quarter as the collapse of Lehman Brothers Holdings Inc. and Bear Stearns Cos. caught up to property owners in the nation’s most expensive urban market.The median price fell 18.5 percent from a year earlier to $835,700, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. The number of sales plunged by half, the most since Miller Samuel began keeping data in 1989…http://www.bloomberg.com/apps/news?pid=20601213&sid=aKJTtME9cUhY
I plead guilty as charged–including the typo on “slide.”You would probably enjoy my latest work:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1364146If nothing else it will cure your insomnia.
Gee, I wonder where-oh-where Mr Hilton borrowed his money? How did he keep his cost of capital so low? He WAS such a go-getter, wasn’t he?
Great post Giraf! When I read green shoots turning into manure, I figured Roubini must be a city kid. But then “green shoots” was BS in the first place, or perhaps the Karl Rove’s that grow on BS.
Bill Bonner is so full of himself. Anyway, there’s a theory now that Madoff was just a money-launderer that’s worth a look:http://www.financialpost.com/most-popular/story.html?id=1745220If this is so, than there was no $50 billion.
I also had the same doubt because this would be a significant deviation from his past ’40-45% from the peak’ predictions. But re-reading the section enforces that it means 40% fall from today.Just as another justification, looking at the Alt-A & option-arm reset schedules it is imaginable to believe the housing will not bottom for another 2-3 years (in real terms). using that and extending the 18% decline fetches:1-(1-0.18)^3 = 0.55 i.e.. 45% decline so kinda makes sense.
Now that is some world-class doom from the good Dr!Job destruction is accelerating because employers have no idea what to expect from the US government. Despite a clear downdraft in the economy, a raging series of social-agenda items (Healthcare ‘reform’, Cap & Trade, etc) that should have been held off for better times is instead being rushed through like we are facing the end of times.And most galling of all is how the new mantra has become, “This is a jobs bill,” or “This bill will create jobs” even though it is relatively clear that most of these bills will destroy jobs.Simple truth is, if you are an employer who is fortunate enough to be in a position to consider adding to staff, you are going to think twice when you see a number of provisions in these so-called “jobs bills” that will mandate and tie your hands in numerous ways. Why, for example, would you hire someone if you are going to be condemned to carrying them on your mandated health plan for years after you have to let them go?They normally say that unemployment is a lagging indicator, but in light of the recent dramatic move of US policy makers, it would strike me as becoming more of a sign of things to come.But hey, “no jobs, no problem.” We’re going to need more people in the country-side to help defuse the rising food crisis that is no doubt just around the corner along with a dozen or so other crises that are sure to be concocted.It’s generally unfair to continue to pin things on the previous administration this late into the current one, but given that W presided over nearly 7 years of crisis (did the threat level in the US ever drop below ‘Orange’???), are we to be surprised that people who see crisis as the opportunity to further their agenda will give us anything but 7 more years of the same? Kind of biblical, eh?The Romans elected their first emperor because he promised to deliver them from the crisis that had settled on the republic. They continued to elect him for the rest of his life because of the need to keep delivering them from crisis, and then because they liked him.Kind of hard to be staring at posterity from this side, and not wonder what people will say about the US 1000 years from now … why did a great republic, leader of the world, sink into absurdity?Honduras is just a dress rehearsal for 2016, and the economic stuff here is nothing more than a pretext for why that will need to happen.What is really going to die from all of this is the 22nd Amendment and what little was left of a once great republic.How is that for some doom?
I just saw my old flat in NYC listed for $475k.I bought it in the early ’90s for $175k and sold it at the end of the ’90s for $250k and felt like a RE king. Well, if you project inflation forward to present day, and toss in a 1% real-gain (less just say a total discount rate of 4%), it should be somewhere around $370k now, so I would say that RE in NYC still has some way to go …. Or does it?I suspect that the coming inflation will take care of that and the bigger mis-pricing problem in the entire US RE market. So I would suggest that while all the policy makers are talking down the possibility of inflation, they are actually planning for it since it is the only policy-tool they have left that will cure all their problems.
about 25 million of the 51 million that have mortgages – are going to be underwater with negative equity in their homes, and therefore will have a significant incentive to just walk away from their homes.No, the problem is they won’t walk away from the home. The losses will simply be socialised by cramming them down the throats of lenders, who will be compensated at taxpayer expense with things like TARP, TALF, PPI, MOUSE, etc.After all, do you really think the Maximum Leader is going to want to have an army of 100 million homeless people on his hands ? On second thought, maybe he will, since that will guarantee his presidency for life.
Young Chuck in Montana bought a horse from a farmer for $100. The farmer agreed to deliver the horse the next day. The next day he drove up and said, ‘Sorry son, but I have some bad news, the horse died.’Chuck replied, ‘Well, then just give me my money back.’The farmer said, ‘Can’t do that. I went and spent it already.’ Chuck said, ‘Ok, then, just bring me the dead horse.’The farmer asked, ‘What ya gonna do with him? Chuck said, ‘I’m going to raffle him off.’ The farmer said, ‘You can’t raffle off a dead horse!’ Chuck said, ‘Sure I can, Watch me. I just won’t tell any body he’s dead.’A month later, the farmer met up with Chuck and asked, ‘What happened with that dead horse?’ Chuck said, ‘I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $898.’ The farmer said, ‘Didn’t anyone complain?’ Chuck said, ‘Just the guy who won. So I gave him his two dollars back.’Chuck grew up and works now for the government. He was the one who figured out how to ‘bail us out’.
The tax lien attaches to the asset. The matter of who gets the bill, or even who pays it is is little more than a “Deckchairs on the Titanic” exercise. If the bank takes the property it as REO, they have in substance taken the obligation to pay the lien, or at least to have implicitly consented to have the amount owed to the taxing authority from the residue of proceeds they might get from a sale. But hey, something is better than nothing, no?
I would liken the situation to “Green Moss” … clinging to a rock with a little bit of hope for the future.How’s that Hopey-Changey thing working out for you?
I tell you, the policy-tool of choice is inflation … it will be the least worst way out of this.We will all be millionaires … like our friends in so much of the third world, we will spend $150 for a cup of coffee, but we won’t have taken a loss on our houses.Simply Brilliant.
If I were a believer in conspiracies, I would point out that tomatoes are red … is it a coincidence that the ultimate beneficiaries of the regime’s policies are the reds ?
Good post, Alarmist. But what does the reference to 2016 mean?
it’s also the first time Dr. Roubini discredited the unemployment figuresfrom the Govt…saying that the official number of 9.5% is really 16%…that fantasy has run out of time
China is rushing the yuan into a world trading currencyand will push for a new world currency at September’s meeting…because by then,Asia BRIC (and soon the rest of Latin America) will be trading in yuan instead of only the dollar or eurothe opposition party in Japan is leading by 10% and likely to be elected by Sept…they want US bonds to be denominated in yen (not the US dollar)the foundation for the US dollar is crumblingthe US dollar’s days are numbered
TA,It may be pre-coffee confusion on my part, but hasn’t the losses at the lending level already been “crammed” down the throats of the taxpayers? The banks have been given a free pass for their MBS toxic assets but that same free pass has not been passed along to the homeowner? It would appear that taxpayer money in abundance is available to the corporate sector but unavailable to the non-corporate taxpayer like you and me. Doesn’t seem like rational thinking to me.
It’s entirely credible that a part of Madoff’s scheme involved money laundering.
Well good, when the dollar crashes, US workers will be competitive with the rest of the world. Jobs will return to the US!
(from the band Motion City Soundtrack, album titled Commit This To Memory):”…with our hands all tiedto the blades of their designwe are armed and ready to commit this crime.”http://www.globalresearch.ca/index.php?context=va&aid=14209Banksters Love Cap-and-Trade: Economic collapse about to accelerateThe well-placed and well-connected are set to make trillions off new climate billby James CorbettThe sweeping new bill which just passed the House last Friday, the Clean Energy and Security Act of 2009, is ostensibly about climate change, but it is in fact a bill of staggering economic ramifications that is going to accelerate the takeover of the economy by the well-placed financiers who have already plundered the Treasury and the Fed of $12+ trillion and counting. It was rushed through the House in the tradition of such nightmarish legislation as the Patriot Act and the banker bailout of last October: hundreds of pages were added to it at the last minute and it was humanly impossible for anyone to have read it before they voted on it. This, of course, is exactly what Obama promised his administration would never allow to happen, and for good reason; bills passed in this manner are always the result of fear and panic and inevitably results in legislation that would never be passed upon sober second thought.In this case, the rush to pass this new bill was an attempt to stop any scrutiny of a plan that is going to utterly transform the American economy, further centralize control of citizens’ lives in the hands of unaccountable federal bureaucrats and complete the transfer of the American economy from Main Street to Wall Street. And all of this in the name of fighting a threat which itself is a demonstrable fraud. In short, the banksters and bureaucrats are sharpening their knives, preparing to butcher what’s left of the carcass of the United States, and a good portion of the public are not only willing to allow it but are actually clamoring for it.The first thing that needs to be understood about the brand new trillion dollar carbon-trading commodities market that will be brought into existence if this bill passes the Senate is that it is a ripoff designed by and for the very corporate interests the environmentalists claim to be fighting. For an historical precedent of what is being proposed under this cap-and-trade scam one can look to Enron, which immediately found ways to plunder billions of dollars from new energy market legislation passed by the Clinton Administration in 2000. They gave schemes for manipulating billions of dollars out of Californians funny little names like Death Star and even went so far as to rig up a completely fake trading floor in their offices in order to bamboozle investors who were interested in the company’s remarkable success. They got away with it because they were The Smartest Guys in the Room, much brighter than the government bureaucrats who were supposed to stop them from committing such blatant fraud (assuming the regulators weren’t simply paid to look the other way). And now supporters of this new bill are putting their blind faith in these same bureaucrats to regulate a scheme to create a vastly more complex market with hundreds of times as much money at stake. Is it any wonder Enron was a booster for cap-and-trade?That the new carbon trading market can and will be manipulated by the very same financial oligarchs and government bureaucrats who have brought the world to the brink of economic Armageddon is laid bare in a must-read article by Matt Taibi in the latest issue of Rolling Stone. In “The Great Bubble Machine” Taibi meticulously documents how the amazingly well-connected Goldman Sachs has managed to manipulate and profit from every financial bubble since the Roaring Twenties and how they’re getting set to do it all over again with the creation of a carbon trading bubble:”The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot.”In effect, this bill creates an entirely new commodity that is guaranteed to generate ever-increasing profit for those who have already spent millions preparing to get in on the ground floor. Here’s a hint: that does not include your average mom and pop investor or your dual-income family struggling to make ends meet in a crashing economy. Here’s another hint: it does include financial juggernauts like Goldman Sachs who have been investing in solar, wind, and biofuels for years and now just happen to find themselves in the perfect position to start reaping vast profits from their headstart in the new carbon credit economy (and you thought Paulson was into going green for any other reason than making green?). It also includes Obama, who was instrumental in helping set up the Chicago Climate Exchange for his political cronies like Al Gore, who already has a company which he uses to buy carbon credits from himself and who had made multi-million dollar investments in companies developing carbon tracking software that will be essential to the new carbon-swindle economy.There are still those out there, however, who believe that this time it’s going to be different. This time the government is going to set up a new trillion dollar industry overnight, make sure it is regulated by angels of unquestionable integrity and goodwill, prevent it from being manipulated by big business, and create scores of new “green” jobs in the renewable energy industry (presumably to replace the hundreds of thousands of jobs that the economy is already hemorrhaging or the hundreds of thousands more that will be shed when these carbon taxes and penalties really ratchet up in the next decade).Well, let’s assume for a moment that we have crossed into just such a fantasy world. It still does not change the fact that the bill itself only offers phony solutions to a problem that doesn’t exist.The phony solution is the “Clean Energy” part of the Clean Energy and Security Act. What feelgood platitudes about pumping billions of dollars into solar, wind and alternative energy projects obscure is that throwing money hand over fist at inherently flawed technologies will not actually make them work, nor will it make the money-hungry charlatans who promote them any more honest. Just ask Albert Lanier. He’s a freelance journalist who has been writing a series of articles about First Wind, a Massachusetts-based wind developer that is currently being investigated by the New York Attorney General’s office. In a recent interview with The Corbett Report he revealed how the Mafia has been linked to the Italian wind farm industry, which might say more about the industry than it does about the mob.Of course, the entire idea of “cleaning” the atmosphere of carbon dioxide seems a bit ridiculous when you realize that by historical levels we are living in a CO2-starved environment, that global surface temperatures are dropping, that global ocean temperatures are dropping, that key proponents of the manmade global warming theory have been caught faking data to support their arguments, that Arctic sea ice is expanding, and that sea levels are not rising. But why let actual science get in the way of a good scare story, especially when that scare story can be used to create a new trillion dollar industry for the banksters?For those who cannot be convinced to consider an issue until it affects them personally, rest assured this draconian new legislation will reach into every American citizen’s living room…literally. As Congressman Steve Scalise has already pointed out, this “climate bill” contains within it a new national building code that supersedes all existing state codes. If enacted, this legislation will create an entirely new class of federally-funded green brigades with the mandate to perform house-to-house inspections to look for violations of this new “green” building code. They would even be able to impose civil penalties for code violations (like having the wrong windows or lightbulbs). Watch Congressman Scalise’s comments in the player below:This bill is not only unnecessary, it is dangerous. It is not only economically reckless, it is economically suicidal. It’s passage will be a particularly dark day in American legislative history, something almost unthinkable given the constitution-destroying atrocities passed during the Bush years. There is only one thing left for Americans to do: call their senators and let them know that it’s time to make a decision: vote against the Clean Energy & Security Act of 2009 or join the unemployment line come next election.
Dr. Roubini…. thanks for telling the truth… bubble vision (CNBC, Bloomberg, etc.) are propaganda machines for the wall street fat cats… they hype the market to draw in the mom and pop investors for the kill… you see it every day… “all is well” “don’t miss the rally” “10 must have stocks” etc etc…. The SEC is a piece of garbage… Their own employees were engaged in insider trading on a daily basis… The FBI is silent… The FBI needs to set up a hot line where people can call in to report the crimes all of the corporations are committing and getting away with, so the corporate executive compensation rapists can rob even more money from the shareholders…. The FBI is the only government organization with any credibility left — they need to go after the bad guys with all of their assets…
found at http://www.prorev.com MADOFF MAY HAVE BEEN MOVING FUNDS TO ISRAELWayne Madsen Report – The failure of federal prosecutors to bring conspiracy charges against Bernard Madoff, the mega-billion dollar Ponzi scammer who pleaded guilty March 12 to eleven counts of fraud and other crimes in U.S. District Court in Manhattan, is providing cover to those who pulled the strings on Madoff’s illegal operation.WMR spoke to a former close aide to Madoff who related how he handled a number of transactions personally for Madoff. The source said that Madoff was running a special type of “pump and dump” scheme. The source said Madoff would “pump money out of the system and dump it out to another place.” When asked what that “other place” was, the source replied, “Israel.”The source believes that no conspiracy charges were brought by the federal government against Madoff because it is the government and not necessarily Madoff that is trying to protect his “network and superiors.”. . .WMR has learned how some of Madoff’s international operations were conducted. At 3:30 pm every day Madoff Investment Securities employees would call banks in Grand Cayman, Cayman Islands, and tell them to “roll the accounts.” That was insider language for “lend the money.”In some cases, money was moved to the Belize Bank, which was described by a Madoff insider as a “back side” for secretive banking operations in the Cayman Islands and Switzerland.Madoff would also dispatch messengers to 55 Water Street in New York’s financial district to pick up securities bearer bonds that could fit into an “Army duffle bag.”
Water, sewer, and tax liens. They never get paid. And the number of the foreclosures is so great that the services dependent on these taxes will just disappear. Roads will be infrequently repaired or plowed, and the drainage won’t be maintained. In N. Illinois there are already “ghost town” subdivisions that are having to provide their own services, and boy is it expensive!As my father said, “residential development does not pay.” As my father-in-law said, “you get paid interest, you don’t pay it.” Those guys grew up in the last depression. My wife and I are submitting to the same processes. A large garden, stay-at-home “vacations,” and we pay cash for everything. Wear it out, use it up, make it last.
before, it was shadow banking originating cheap money with cheap rate for junk rate borrower and sell toxic financial product (toxic loan) to Asia and Europe. now, it is FED and Treasury originating cheap money (treasury) or just printing cheap money for junk rate USA gov and export toxic funny paper (dollar & treasury) to Asia and Europe. Have we have enough fun? are Asia and Europe morons?
I think the talk about double dip is overly optimistic. If your scenario plays out, and I think it most likely, then we will see a lightning strike downward “Z” which will end when the leveraging has been wiped out.Funding the speculators who will run up commodity prices is insane and will have serious consequences. Those of us with capital will be forced to play along and the cost of oil and food will soar until we truly have a serious depression.First the next leg down so that the Treasury can keep borrowing costs low for a while longer. Then a new “we’ve hit bottom” media blitz and then the rush into resources as there is no where else to put money to work for a good upward trade.The big institutions have told us as much as they plan to make most of their profits with their traders.
http://globaleconomicanalysis.blogspot.com/2009/07/sweden-cuts-deposit-rate-to-negative-25.htmlyou have deposit on any sweden banks? take your deposit out before they charge you .25% interest rate.
dont trust banks. dont trust FED and Treasury. dont trust Obama and Democrats.
when will the world learn treasury originated by USA treasury factory is as toxic as toxic RMBS or CMBS?
California IOUs Will Pay 3.75%, State Panel Decideshttp://www.bloomberg.com/apps/news?pid=20601015&sid=a3RcbccPHQhUwhat is capital structure of IOUs? at mere 3.755%, do these IOUs have strong protection on those who accept them? which idiots will accept for if lack of protection?
The 2 things needed to be creditworthy- before any bank will extend you credit – are collateral and income.Without these 2 singularly important components , loans will not be extended.This is in a nutshell the deep structural dichotomy facing the US economy today. The US economy driven by consumption-70%. Most of those consumers work in the service sector.The latest jobs data shows service related sector jobs continue to vapourise at astonishing levels. This means that as these jobs, and jobs in other industries, disapper they will directly impact OTHER service related jobs (jobs piggy backing off other jobs).In this dynamic, the growth in umemployed becomes a leading indicator forcasting yet more jobs to be lost. This is now a self perpetuating downward spiral in job losses that will not stabilize until industries reach sufficient (down) size to meet the dramatically reduced demand from an economy that has suddenly discarded credit growth as it’s source of economic growth. This is a process which cannot be stopped by Govt intervention- it simply is too big to halt.But it will likely get much worse. Businesses will soon start to release those who have been kept by virtue of reduced wages, hours, temp work etc. When the expected 3 and 4 Q2009 turnaround fails to materialize business leaders will enter the hunker down for the long haul mentality which will entail massive restructuring of their companies which will look very permanent in nature. U6 unemplyment will see 20%+ in 2010, unseen since the 30′s.The “green shoots” message will be scorned on by the public in those circumstances. The US Govt will be faced with general open derision for their attempts at misleading it’s citizens when it becomes apparent they are powerless to stop the Depression rolling on.
lets not balance budget, lets originate IOUs, may be suckers will accept these IOUs like they done with RMBS, CMBS, CDO, treasury, bla toxic funny paper?
as toxic as CDO and CDS.
I think Dr Roubini and the posters GSM, MMCa, et on this thread have highlighted a critical factor on why things are not rosy: The job losses this time are harbingers of tough times ahead, not the lagging indicator of the traditional recovery just around the corner.If things just couldn’t get even more screwed up, it looks like these “Pure Politicians of Genius” are going to pass a health care bill that to me looks like it combines the WORST of both private and govt plans.The proposal looks like it has been structured soley on the need to make the plan appear to accomodate private insurers, insurees, and the indigent and yet cost less than $1T over 10 years. Practicality and actual delivery of health care have been ignored or obfuscated.So now you got a huge govt plan and the bureaucracy it adds, a crazy patchwork of private insurances which the govt gets into via more tax regulations for employers over health insurance premiums, taxes on those who have insurance, reduction in Medicare and Medicaid reimbursements. CHAOS!
EM, sweetie, the middle class already are debt slaves and have been for 30 years. We willingly put the noose ’round our own necks.
Now that’s appropriate.
Put another way:A fanatical faith healer ran into an old friend and asked how things were.“Not so good,” complained the friend. “My wife is ill.”“Your wife is not sick,” contradicted the fanatic. “She only THINKS she is sick. Have faith and remember this.”A few weeks later they met again and the faith healer asked,” How’s your wife now, my friend?”“Worse,” groaned the friend. “She thinks she’s dead.”
GM and Chrysler, and those home values, were over-inflated due to massive speculation. And it’s speculation that drives markets!To say that there’s ever anyone doing things in the marketplace out of altruism is a bit of a stretch.Mark
Same thing the US government is/has been doing: funneling billions/year to Israel for, “aid.”All that’s defective will eventually fall under the weight of the laws of the universe.Mark
I don’t believe that the money is available at all. I believe that it’s being used to backstop balance sheets, to beef up reserves (which got to the point of being nearly non-existent). It is, I believe, doing exactly what they all are stating it was to do- prop up the financial/banking sector. The thought is that it needs to be functional (ample reserves) for when things pick back up again; the only problem is that things WON’T pick back up again, and these financial entities are way over-scaled (bailout money has only kept THEM inflated).Mark
But this does nothing for the workers themselves, who are/will be massively in debt. But, as usual, it will do wonders for the corporate profiteers.As I stated in a previous thread, I don’t see how capital is going to come back to the US. Why build new plants, purchase new equipment, and deal with increasing taxes when you’ve already got plants and equipment and cheap labor in other countries (like South Korea, Singapore and China)? For what, to then export to these same (emerging) countries?No, other countries/manufacturers came to the US in order to produce and sell directly to the US market. With the US “consumer” heavily in debt this market is dead, perhaps never to return. And no, we can’t all just start working for ourselves (manufacturing and selling to ourselves) while we still owe tons to external creditors.It all sounds reasonable until you start putting it to the test.Mark
Too bad everyone who purchased a raffle ticket got their money by borrowing against a securitized pool of dead horses.
Uh Oh!July 3 (Bloomberg) — Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.“The major part of Indian reserves are in dollars — that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview today in Aix-en-Provence, France, where he was attending an economic conference
Not all of us!I took all my bonuses and windfalls and paid off ALL my debts during the last 10 years.Some of us lived below our means.Yet what should have been my golden years is now at risk. I just hope that the American public still has a back bone and enough intelligence to stand up for what is right.
There’s a lot of venture capital out there just waiting for the right opportunities. Capital will come back into the markets, it’s just a matter of time. To state that the “US “consumer” heavily in debt this market is dead, perhaps never to return”, isn’t reasonable. Things change, sometimes slowly at first, but things will and do change. I know several brilliant, hardworking, and visionary entrepreneurs that are creating opportunities and jobs RIGHT NOW in this country, and I believe that given time we will see renewed strength and growth once again.
Green shoots yellow,Weeds all a brownin’.America’s red,Her economy dyin’.
Chart of the Day make the employment trend pretty clear.Source: http://www.chartoftheday.com/20090703.htm?T
Today, the Labor Department reported that nonfarm payrolls (jobs) decreased by 467,000 in June. The stock market declined sharply on the news. Today’s chart puts that decline into perspective by comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1954-2006 (dashed blue line). As today’s chart illustrates, the current job market has suffered losses that are nearly three times as much as the average. In fact, if this were an average recession/job loss cycle, the number of jobs would have begun to increase three months ago.
The historical data shows that reversal doesn’t happen rapidly: the bottom of the “U” appears to go about 3 mos; if you note that the current trend is in full downward motion it would suggest that there’s at least another 6 months of decline yet to go, meaning that we’ve got at least 9 more months of non-job growth ahead. This of course, would be to match previous patterns, which, clearly, we seem to be outside the norms of the past.Mark
Guest posted this yesterday. Give it a reread. If you still disagree with my comments, then I conclude you enjoy poverty pollution and find Dr. Roubini’s job report extremely encouragingfrom Marketwatch comments:To All My Valued Employees,There have been some rumblings around the office about the future ofthis company and, more specifically, your job.As you know,the economy has changed for the worse and presents manychallenges. However, the good news is this: The economy doesn’t pose athreat to your job. What does threaten your job however, is the changingpolitical landscape in this country.However, let me tell you some little tidbits of fact which might helpyou decide what is in your best interest.First, while it is easy to spew rhetoric that casts employers againstemployees, you have to understand that, for every business owner, thereis a Back Story. This back story is often neglected and overshadowed bywhat you see and hear. Sure, you see me park my Mercedes outside. You’veseen my big home at last year’s Christmas party. I’m sure; all theseflashy icons of luxury conjure up some idealized thoughts about my life.However, what you don’t see is the BACK STORY:I started this company 28 years ago. At that time, I lived in a 300square foot studio apartment for 3 years. My entire living apartment wasconverted into an office so I could put forth 100% effort into buildinga company, which by the way, would eventually employ you.My diet consisted of Ramen Pride noodles because every dollar I savedwent back into this company. I drove a rusty Toyota Corolla with adefective transmission. I didn’t have time to date. Often times, Istayed home on weekends, while my friends went out drinking andpartying. In fact, I was married to my business — hard work,discipline, and sacrifice.Meanwhile, my friends got jobs. They worked 40 hours a week and made amodest $50K a year and spent every dime they earned. They drove flashycars and lived in expensive homes and wore fancy designer clothes.Instead of hitting the Nordstrom’s for the latest hotfashion item, I was trolling through the discount store extracting anyclothing item that didn’t look like it was birthed in the 70′s. Myfriends refinanced their mortgages and lived a life of luxury. I,however, did not. I put my time, my money, and my life into a businesswith avision that eventually, some day, I too, will be able to afford theseluxuries my friends supposedly had.So, while you physically arrive at the office at 9am, mentally check inat about noon, and then leave at 5pm, I don’t. There is no “off” buttonfor me. When you leave the office, you are done and you have a weekendall to yourself. I unfortunately do not have the freedom.I eat, and breathe this company every minute of the day. There is norest. There is no weekend. There is no happy hour. Every day thisbusiness is attached to my hip like a 1 year old special-needs child.You, of course, only see the fruits of that garden — the nice house,the Mercedes, the vacations… you never realize the Back Story and thesacrifices I’ve made.Now, the economy is falling apart and I, the guy that made all theright decisions and saved his money, have to bail-out all the people whodidn’t. The people who overspent their paychecks suddenly feel entitledto the same luxuries that I earned and sacrificed more than a decade ofmy life for.Yes, business ownership has is benefits but the price I’ve paid is steepand not without wounds.Unfortunately, the cost of running this business, and employing you, isstarting to eclipse the threshold of marginal benefit and let me tellyou why:I am being taxed to death and the government thinks I don’t pay enough.I have state taxes. Federal taxes. Property taxes. Sales and use taxes.Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes ontaxes. I have to hire a tax man to manage all these taxes and then guesswhat? I have to pay taxes for employing him. Government mandates andregulations and all the accounting that goes with it, now occupy most ofmy time. On Oct 15th, I wrote a check to the US Treasury for $288,000for quarterly taxes. You know what my “stimulus” check was? Zero.. Nada.Zilch.The question I have is this: Who is stimulating the economy? Me, the guywho has provided 14 people good paying jobs and serves over 2,200,000people per year with a flourishing business? Or the single mother,sitting at home pregnant with her fourth child waiting for her nextwelfare check? Obviously, government feels the latter is the realeconomic stimulus of this country.The fact is, if I deducted (Read: Stole) 50% of your paycheck you’d quitand you wouldn’t work here. I mean, why should you? That’s nuts. Whowants to get rewarded only 50% of their hard work? Well, I agree, whichis why your job is in jeopardy.Here is what many of you don’t understand … to stimulate the economyyou need to stimulate what runs the economy. Had suddenly, thegovernment mandated to me that I didn’t need to pay taxes, guess what?Instead of depositing that $288,000 into the Washington black-hole, Iwould have spent it, hired more employees, and generated substantialeconomic growth. My employees would have enjoyed the wealth of that taxcut in the form of promotions and better salaries. But – you can forgetit now.When you have a comatose man on the verge of death, you don’tdefibrillate and shock his thumb, thinking that will bring him back tolife, do you? Or, do you defibrillate his heart? Business is at theheart of America and always has been. To restart it, you must stimulateit, not kill it. Suddenly, the power brokers in Washington believe thepoor of America are the essential drivers of the American economicengine. Nothing could be further from the truth; this is the type ofchange YOU can keep.So where am I going with all this?It’s quite simple.If any new taxes are levied on me, or my company, my reaction will beswift and simple. I’ll fire you. I’ll fire your co-workers. You canthen plead with the government to pay for your mortgage, your SUV, andyour child’s future. Frankly, it isn’t my problem any more.Then, I will close this company down, move to another country, andretire. You see, I’m done. I’m done with a country that penalizes theproductive and gives to the unproductive. My motivation to work, and toprovide jobs, will be destroyed and, with it, will be my citizenship.So, if you lose your job, it won’t be at the hands of the economy; itwill be at the hands of a political hurricane that swept through thiscountry, steam-rolled the constitution, and will have changed itslandscape forever. If that happens, you can find me sitting on a beach,retired, and with no employees to worry about….Goodbye
I think that it IS entirely reasonable, given proper reasoning.That capital that you think that is out there is being swallowed by banks, not to return! It’s backstopping their reserve requirements on their balance sheets.The “consumer” is dead, D E A D! All indications point in this direction. What indications do you see that point otherwise? Keep in mind that taxes will be increasing and credit to consumers will be decreasing, both in an economy heavily based on the consumer.The gotcha is the tax load that’s piling up. This is becoming very apparent to those outside the US (see the post by Guest on 2009-07-03 13:13:52 below).TPTB are trying to shift to a “Green” economy. What this means is that we will be operating with energy that is only a fraction of what we heretofore have been operating with. With 300+ million people this will result in a massive reduction in available energy. And doing all of this will only be possible with investment from outside the US, not exactly something that I’d hold my breath waiting for: when outsiders are already owed a lot by the US, and there appears little indication that they will be repaid, why would they sign up for giving us more money?Mark
“The US Govt will be faced with general open derision”Yes, we’re going to be good and rude to them. That’ll teach ‘em to rob us blind!By the time we’re through deriding them, they’ll think twice before they do it again.
It’s not really the government that’s doing it, it’s the corporate puppet masters behind the government. And these folks will find some other carcass to leach off of if not the US government; until, that is, US corporations are no longer recognized as having equal rights with actual citizens, human beings.Mark
Wasn’t it Fred Astaire who sang…“When an irresistible force such as you… Meets an old immovable object like me… You can bet as sure as you live… Something’s gotta give…”?The old immoveable object could very well be America’s political establishment: corrupt, hooked on stealing public monies to give to private supporters and all the while building wealth and power for its leaders.The Obama Administration, in the midst of a worldwide recession, seamlessly picks up the failing banker-run government model from Bush and pushes the power politics of tax, spend and control to a level Lyndon and Franklin would have never imagined.The engine of America’s economy has been struggling to pull its load against the increasing burdens of big government and big corruption. Now come the threats of national health care, amnesty, cap and tax and all the rest. After all, say the new guys in Washington with the old ideas…”We won and now it’s our turn.”But, wait a minute! This old immovable political power is about to meet its match: the irresistible force that made America the economic powerhouse of the world. Free enterprise, property rights, contract integrity and representative government.Briefly stated: After all these turbulent years the final match approaches: Tyranny versus Freedom. Something’s gotta give.
healthcare lost. wealthcare for the wealthy has prevailed.from prorev.com undernews page:OBAMA’S HEALTH CZAR WAS DIRECTOR OF COMPANIES THAT FACED SCORES OF FEDERAL INVESTIGATIONS.Fred Schulte, Investigative Reporting Workshop – Nancy-Ann DeParle, President Barack Obama’s health policy czar, served as a director of corporations that faced scores of federal investigations, whistleblower lawsuits and other regulatory actions, according to government records.Several of the companies were investigated for alleged kickbacks or engaging in other illegal billing schemes, while others were accused of serious violations of federal quality standards, including one company that failed to warn patients of deadly problems with an implanted heart defibrillator. Several of the cases ended with substantial fines paid to the federal government, even though the companies admitted no wrongdoing.Since leaving her government job running Medicare for the Clinton administration, DeParle built a lucrative private-sector career. Records show she earned more than $6.6 million since early 2001.After leaving government, DeParle accepted director positions at half a dozen companies suspected of violating the very laws and regulations she had enforced for Medicare. Those companies got into further trouble on her watch as a director.Now she’s back in government as a leading voice in deciding the shape of health care reform. Named by Obama in March as director of the White House Office of Health Reform, making $158,000 a year, DeParle is the point person in pushing for the administration’s plans for changing health care and the ways Americans pay for it – changes in which her former companies have a great deal at stake.Among DeParle’s corporate connections:- DaVita Inc., which owns and operates kidney dialysis centers, has been the subject of several government probes into its billing and drug-prescribing practices, most recently in December by Justice Department investigators in Georgia.- Boston Scientific Corp. reported to the SEC that it received five state or federal subpoenas during 2008, including ones from the Justice Department and Health and Human Services, which oversees the Medicare agency. In addition, Defense Department criminal investigators are looking into the company’s “marketing interactions” with doctors at a U.S. Army hospital in Tacoma, Wash.- Guidant, which already was in legal trouble for failing to disclose 12 patient deaths when DeParle joined the board in 2001, has since then faced new problems. After a college student died in 2005 when his implanted defibrillator failed on a biking trip, his doctor told Congress that Guidant officials had known of similar problems for three years, but failed to tell the public.
“If society fits you comfortably enough, you call it freedom.” – Robert FrostTHE reality is that a decline in resources means that the extra cushion is being lost. Now that the people have become accustomed to that cushion they will demand that it continue, whether there are resources or not. The barrier class (middle class), the class that protects the wealthy class from the lower/poor class, is eroding.Thinking that we’ll “take back America” is pure folly, as there won’t be anything to take back.Mark
You seem to be saying that the government is a puppet and the president is a puppet. That it’s not the government’s fault or the president’s fault if they are puppets of corporate puppet masters and dance to the tunes of those who pull their strings and mouth their words for them.You’re saying we should embrace the ideas of the puppets and do what the puppets say, because the fact that they are puppets makes it okay for us to obey.Well, I’ll say one thing. You’re right about the puppets.
Boy, Doctor Franklin really blew it when asked by a lady what kind of government had been established, a Republic or a Monarchy, at the close of the Constitutional Convention. Instead of saying, Republic, he should have said, “A Cushion, if you can keep it.”
I’M AN OLD FASHION DEMOCRAT FOR REAL DOMESTIC ENVIRONMENTAL GROWTH PROTECTIONSAnd your story touched my heart too.But some of today’s globalist-bent liberals call me NEOCON in error now…especially my scientific demographic growth warnings.Politics is upside down [and brainless too] now today IMO.I just stumbled on to a great non-profit environmental website that sums it up. America’s per capita energy use in 2007 was only 6% more than 1973 [you know, when we drove monster 10 mpg gas guzzlers and we totally wasted transportation energy, but our population was like 200 million]. Its clear, automotive use does NOT drive alleged global warming in America. Population growth and the energy to feed and heat/cool, etc. us does. Take that to the bank:http://www.fairus.org/site/News2?page=NewsArticle&id=20877&security=1601&news_iv_ctrl=1902Hybrids and smart cars with recycling more are all moot/useless points fighting America’s share of global warming, without depopulation [or a chronic continued economic mess reducing oil consumption].The good news: the current economic downturn has decreased world oil demand by 42% for 2009 estimates since 2006. Our economic mess is the equivalent of world depopulation in an environmental sense. When will our two party system stop using Orwellian newspeak “growthfriend” to overpopulate America worse and start being environmental and scientific again, like us old fashion liberals still are?Gaining more Democrat voters or Republican slave labor overpopulation is clearly not the environmental answer to global warming; its the root cause.
UPDATE TO BLOG ABOVE”…2007 was only 6% less than 1973…”
Mark, here is a tip for you from today’s Click&Clack: Talk Cars:Dear Tom and Ray:When my husband and I first got married 18 years ago, I noticed that when his car was low on gas, he would remove the gas cap, saying it would make the gas last longer until he could get to a station. I am a college-educated woman, and this seemed preposterous to me…but then I noticed other people doing it. My husband has since stopped doing this, due to my nagging. But is there any truth to this, or is it an urban legend?—TinaRAY: When the power goes out at your house, does your husband run outside and disconnect the electric line from the pole, so he can suck more electricity through the house’s wires and catch the end of the ballgame?
IF WE DON’T SEE THE ORWELLIAN NEWSPEAK “GROWTHFRIEND” ELIMINATEDI see an endless “L”; until Mother Earth eliminates “Growthfriend” through hunger, disease, war, etc….Let’s hope we can do it the worldwide planned parenthhod method, less shocking. We need to get our world’s governments and its churches too agreeing on the demise of TOTALLY environmentally unfriendly “growthfriend”.
WITHOUT DEPOPULATION IN AMERICA AND THE WORLDCap and Trade is a total environmental joke. Many real environmental groups TOTALLY agree with me.
I agree with your characterization of N.R.
can USA stop promoting democracy (in reality is nothing more than USA exploitation, civil war, and unnecessary killing) around the world?
“Guest,” apparently you’re a newcomer (or just haven’t gotten it yet). My commenting doesn’t mean that it’s what I WANT, just what I see WILL be happening! The outcome that I speak about will be of no benefit to myself.The problem has been that we’ve all been in denial. When 2/3 of the world’s population lives on $3/day or less do you really think that YOUR standard of living will remain above the others? especially as resources dwindle? Don’t kid yourself.Mark
“It’s not really the government that’s doing it”??? are you trying to make an excuse for the government for all policy failures? make no delusional mistake about it, government owns all policy failures and all blame should be placed on government.
What I was implying is that the government has become a tool of corporations.Never would I say to do as anyone else says.Mark
Somalia would be a good choice for a country where the government doesn’t bother with tax collection.
terrific summing up
Creating what jobs making what things that consumers would buy?
looks like is 50% of U, bottom is near, sweet,
Perhaps one can attribute the March-May rally, to short covering, eager media hacks seeking green shoots under every weed and again, a slew of phony new “estimates” by the same crowd that missed the meltdown, trying to vindicate themselves with hope and change-the discredited Obama spin team. Many like Doug Kass, Jim Cramer, Larry Kudlow and others, got the timing right for the March bottom, but it is clear, that it could also be revisited, and for this one should thank Mr. Roubini who has not wavered during this 30% up move. Bravo!
Obama the jive artist can blame Bush & Co. all he can, he and his two bit amateur wrecking crew can remind the country of what they inherited, the outrageous spending on idiotic pork and mindless project on top of choking the energy industry, and their unaffordable medical and immigration plans, will put this country in a worse depression than we can even begin to imagine. It will impact the entire world economy and turn the U.S into a real Bananera. Communist wannabes never ran a successful economy, with a Chicago Radical, an avid practitioner of Saul Alinsky and the ethics of the Daley Clan, every sharp move up in the market is an opportunity to dump.
Doug Kass, an astute hedger, who avoided the Madoff plague, called in early March 09, on CNBC when the S+P was 660, for a generational bottom. In his latest comments he precluded a revisit. Most chartists know that a W is more convincing than a V. Some argue a triple bottom is better than a W. We had a W- between October and March. The signs are that another bottom is in the making.
can Asia and Europe lend unlimited cheap money to USA to promote destruction of peaceful lives around the world?
Looking to buy your first home?Then better notice that bull’s eye painted on your back. You’re about to become the target—of government and government cronyism.You’ve heard of “follow the money”? Well, they’ve found you. Who do you think is going to pay the bills for the welfare society? Who do you think can be trapped into working for the government elitists and the lobbyists for the rest of his productive life?It’s you, my friend–the middleclass “homeowner.”So run, don’t walk, from the government’s seductive first-time-buyer $8000 home credit “incentive.” It’s a trap. When you’re initialing the bottoms of all those pages in that stack of realty forms for your lovely new home, be advised that you are initialing your financial life away. Every one of those initials is going to cost you money, lots of money. Sucker money, for the rest of your productive life.Dr. Roubini’s deflation and inflation predictions won’t apply to you. Why not? Because you’re a “homeowner,” a government captive subject to official fleecing–from the building and insurance industries, the real estate and banking industries, the mortgage and title company industries, the home repair and pest control industries, the utility and property tax entities, the voter and government employee interests…and any other lobbyist group linked with 21st century government.It’s a simple protection racket. Pay their inflated costs, deflation or no, or they’ll take your “home” and all your life savings that’s in it.So, in these days, while deflation eats at your principal and equity, and your bank mortgage gnaws at your paycheck, and inflation erodes your salary, be aware that every congressional-connected lobbyist will be inflating your homeowner fees big time, even in a deflationary cycle. You see how it works, don’t you? You can’t afford to be without them. Get sick, and can’t pay your bill? They’ll take your property. Get sued and no insurance? They’ll take your property. Lose your job and can’t pay your property taxes? They’ll take your property. Have a major car accident and no insurance? They’ll take your property… Just plain ol’ extortion, really.You name it–house insurance…liability insurance…car insurance…health insurance…property taxes…bond issue fees for welfare and government employee raises, for “better” libraries, schools and junior colleges, utilities, fire and police protection, ambulance service, water facilities/sewer lines/and street repairs, health facilities—they’re all your responsibility now. You see, you’re a “homeowner.”And just to get you acclimated to the feel of fleecing, your government and its lobbyists will get you started by extracting a few thousand dollars up front for buying costs (and later a few thousand in seller’s costs and possibly a few thousand in capital gains tax for your friendly government) and likely a few thousand dollars’ worth of “points” (give or take a few) for your friendly JP Morgan Chase banker. The shock wears off, with time.Home ownership. The American Trap!
In that democracy is “the political orientation of those who favor government by the people or by their elected representatives,” it’s apparent that the first thing these D.C. invader-occupiers corrupted was the word “democracy.” What the USA is promoting and forcing upon the innocent peoples around the world is raw central bank power wielded by a shadowy international banking cartel.
The reason that they’re entrepreneurs is because they have positive attitudes and a can-do attitude. Do you honestly believe that local and state agencies wouldn’t just love to have business relocations into their areas creating jobs and would offer tax incentives in order to get them? What about offering tax incentives to keep them? Do you think that maybe lower corporate tax rates would make our goods more competitive on a global scale? Sure, we have higher labor costs, but the rest of the world is catching up.The entrepreneurs that I know (and am related to one)have an immense amount of capital ready and willing to employ, buying distressed and poorly managed American businesses, using their expertise and sharp business acumen to rebuild our once great nation. Cash is king, and they’ve got the cash. Not everyone operates on credit.
yes, property tax and capital gain tax will only go up. income tax and sale tax will only go up. all tax will go up while democrats refuse to cut spending. consequence of democrats’ foolish spending will mean States originating IOUs and Federal government originating Treasury or just dollar like toxic funny paper.
how many innocent people die in iraq for USA’s democracy promotion (which is nothing but exploitation of iraq oil fields) funded by holders of USA’s toxic funny money.
there is instance that if you fail to pay property tax or state tax or some tax, state or local gov can foreclose your home. yes, those liberal democrats will foreclose your home. democrats are creating american nightmare for hard-working middle-class.
Time to replace those flags on yur pickup that you’ve been toting since nineeleven–they must be pretty worn from flapping in the wind so long.
http://www.governmentauctionsitereviews.com/Tax_Lien_Article.htmli bet if you owe city, state, or federal any kind of tax, they can foreclose your home. yes, democrats tax-thirst will foreclose your home.
Ron Paul said back in 2003 that “Roosevelt and his statist friends confiscated gold and radically debased the currency, ushering in the age of worldwide fiat currencies with which the international economy struggles today.”That struggle has since worsened. Therefore, I don’t think that all the evils of paper money are in. Dishonest weights and measures, debased silver, and debased paper currency as a deliberate policy are all economically destructive. Which means that the end of this American chapter hasn’t been written–and it looks to me as if it’s going to be a lot more dire than the last pages of the Great Depression.This time around, IMHO, all bets are off. America, once the greatest producer in the world, has been stripped of her manufacturing base, engineering jobs, and good name of world brotherhood. Two-thirds of US Treasuries are now held by non-residents.Already permanently crippled by Clinton and Bush, she can in no way afford Obama’s relentless attacks on her economic liberty. She is at the brink of collapse.All this to say, if the price of your former flat in New York falls a great deal more in price, I would not be surprised. Americans must prepare themselves for the aftermath of a failed dollar system, which will not be limited to the United States.
Here’s a solution to the consumer debt problem: Just disallow any usury–no interest rates above 10% made retroactive to, say, 1980. Those who in the past charged more than 10% will have to pay back the difference. Then everyone can pay back their debts and be happy. Obama can come on TV and announce this to everyone’s surprise: “My fellow Americans, you asked for real change. Well, here you go. I have reinstated the usury laws and made them retroactive to 1980. Any one who paid over 10% interest since 1980 will be reimbursed by the usurers themselves, and their children and grandchildren if necessary. No more usury in the US!”
Anyone know why Pete CA has not been posting? He was supposed to fill out a weekend card before being absent from this blog. Also, OR has stopped posting–he used to post all day long. People losing faith in Roubini, perhaps? Time for a little Kremlinology.
It’s officially July 4, 2009 — Happy Dependence Day,as Rush Limbaugh, I understand, called it,asking all those not driving to stand…for America’s national anthem, sung by Harry Belafonte—Banana Boat SongDay-o, day-ay-ay-oDaylight come and me wan’ go homeDay-o, day-ay-ay-oDaylight come and me wan’ go homeWork all night on a drink of rumDaylight come and me wan’ go homeStack banana till de morning comeDaylight come and me wan’ go homeCome, Mister tally man, tally me bananaDaylight come and me wan’ go homeCome, Mister tally man, tally me bananaDaylight come and me wan’ go homeLift six foot, seven foot, eight foot bunchDaylight come and me wan’ go homeSix foot, seven foot, eight foot bunchDaylight come and me wan’ go home…Beautiful bunch of ripe bananaDaylight come and me wan’ go homeHide the deadly black tarantulaDaylight come and me wan’ go homeLift six foot, seven foot, eight foot bunchDaylight come and me wan’ go homeSix foot, seven foot, eight foot bunchDaylight come…
Pete is probably on an outing with his family. OR and his wife landed two weeks or so ago in America and OR doesn’t usually post during his extended excursions. And, of course, his wife NEVER posts. My question, where is PeterJB, other than somewhere in Australia?Funny, how you miss everybody, isn’t it? And especially Dr. R., when he fails to check-in home–even if he is in Outer Mongolia or Coos Bay, Oregon–where they don’t have phones.
It was funnier when it was a donkey the first time I came across it.
Better libraries, schools, utilities, fire and police protection, etc. all make for a nice community living experience. If you prefer to avoid those cost, you can go live on an undeveloped lot with a shack and an outhouse. As for the idea of renting to avoid those costs, doesn’t work. The landlord will pass the costs on the the tenant in the form of rent.
you are completely right. i have no idea why people get property after getting primary residency. blabla tax/expense on second/third/or more home as investment or rent out will kill ya. not mentioning single investment risk (means you tie up all your capital in single place). what if your home is destroyed, then you are doomed. your home secured by insurance? in this environment? what if insurance co go BK or run on its obligation? you are doomed.
liberal democrats scum is robbing from middle-class and give to peter who doesnt work and just live off government subsidy.
NO JOBS! Very nice post Dr Roubini, glad to see you are back… You described the JOBS problem in a concise, clear write-up. It seems though just like myself and others you have no solution/s either. Usually you recommend a couple of courses of action, like with the Banks. I suspect that you to see the math, the numbers, and They just don’t add up to a solution that will put almost 15 MILLION currently unemployed and another 15 MILLION underemployed back into jobs where they can make a decent living, pay a mortgage and living expenses, start buying goods again, other than the bare necessities. Where can 30 million go to work producing and manufacturing things that people need and or desire? Our leaders at all levels have destroyed our ability to make anything. The auto industry is hanging by a thread. Big oil is stopping Green related technologies and jobs from being formed. Health care the one are where jobs are being formed, albeit slightly, is looking towards solutions that will in effect cause more job loss to maximize the profits in the future of those providing the services.so while NO JOBS are being created and no one at any level of Gov’t or the private sector seems to have any idea on how or what to do in respect to job creation, the numbers will only continue to climb. At the current run monthly run rates (450k monthly loss over past 18 months) over the past year we will hit approx 23 MILLION totally unemployed by the end of 2010. The unemployed/underemployed number will grow to approx 38 MILLION. The pct doesn’t really matter anymore. Folks should be concentrated and reporting on how many there are. Headlines should not read Unemployment reaches 9.5% it should read 15 Million are now unemployed.I myself and my fortune 60 company are now doing our fair share of not helping. I now hire contractors for as little as 2-5 days of work and then they are done. I have taken a few employees just in the past month that have more than a year with us, have been working 40 hour weeks and now told them their hours will fluctuate anywhere form 20-40 depending on work load.Small and medium size business’s make up almost 70% of the jobs in this country. they are going away at an alarming rate and there is little or no new ones starting up. No one will lend to anyone who wants to.I hope a future post by the good Doctor can come up with some ideas for job creation. I have stated for a while, i believe it could be Green related technologies and jobs that help lead us out of this NO JOBS environment.I will continue to beat the NO JOBS theme, post the data, the opinions, and the solutuions when i see them.
Correction to the wording:At the current monthly run rates (450k avg monthly job loss over past 18 months) over the next 18 months we will hit approx 23 MILLION totally unemployed by the end of 2010. The unemployed/underemployed number will grow to approx 38 MILLION. The pct doesn’t really matter anymore. Folks should be concentrated and reporting on how many there are. Headlines should not read Unemployment reaches 9.5% it should read 15 Million are now unemployed.
Interesting ideas on how the PTB and banksters operate…How White Collar Crime Workshttp://money.howstuffworks.com/white-collar-crime.htmMost of us would like to think of ourselves as upstanding, moral citizens — we probably trust ourselves to never hold up a bank or murder someone in cold blood. Not only are these blatant violations of common ethics — any 5-year-old will tell you they’re bad — but they’re hard to get away with and generally distasteful to carry out.On the other hand, another kind of crime is much easier to rationalize to ourselves. Committing it doesn’t require a gun or a knife. You may not see an apparent victim. It’s easily covered up. It can secure your financial future for life and you may have plenty of opportunity. This is the case for white-collar crime — a class of crimes associated with various types of sophisticated fraud.
if you read one article today read this one at: it shows what will happen as mroe and more NO JOBS happen and the impact on housing.http://www.oftwominds.com/blogjune09/squattertownUSA06-09.htmlDe Facto Socialism, 20 Million Vacant Houses and Squattertown, USA (June 30, 2009)Combine rising foreclosures and unemployment with de facto Federal ownership of millions of homes and you eventually get de facto socialized housing.Correspondent Richard Metzger and I have been discussing the consequences of rising foreclosures/unemployment and the de facto government ownership of millions of U.S. houses via Fannie Mae/Freddie Mac and direct ownership/control of banks.There are a lot of threads to pull together on this topic, so please bear with me as we set up the contexts.
TAKE THE RICH OFF WELFARE!
SATURDAY, JULY 04, 2009LA Times: ‘Another wave of foreclosures’by CalculatedRiskFrom Don Lee at the LA Times: Another wave of foreclosures is poised to strike:Just as the nation’s housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy….Just how big the foreclosure wave will be is unclear. But loan defaults are up sharply. … rising foreclosures will depress home values, pushing more homeowners underwater. Mark Zandi of Moody’s Economy.com estimates that 15.4 million homeowners — or about 1 in 5 of those with first mortgages — owe more on their homes than they are worth….”Absolutely,” Chase Bank spokesman Tom Kelly said when asked about an impending surge in foreclosures. … Bank of America spokesman Dan Frahm said the company was projecting a “slow increase” in the number of monthly foreclosures, potentially reaching 30% above previous normal levels….But anecdotal reports indicate that foreclosure sales have started to climb again in the second quarter. And the pipeline is clearly getting fuller…. just recently, said [Jerry Abbott, a broker and co-owner of Grupe Real Estate in Stockton], there’s been a surge of requests for so-called broker price opinions, or appraisals that lenders often ask brokers to provide just before they put a foreclosed property on the market.”I think it’s going to be a very big wave,” he said. “Just like what we saw through 2008.” (END)Hoocoodanode? And just wait for the Option ARM recast wave …http://www.calculatedriskblog
What If The (Debt-Based) Economy Never Comes Back? (July 2, 2009)Fulla rtice:http://www.oftwominds.com/blogjuly09/what-if07-09.htmlThe U.S. economy currently has no Plan B in the event the credit/consumer economy never comes back–a scenario which appears not just likely but inevitable.Yes, The Web Will Bankrupt The Government:Long-argument-short: The explosion of the web created so many new non-financial transactions, non-financial markets, and opportunities to create and enjoy oneself that don’t cost a penny, that ultimately we’d move decisively to a more dynamic economy, but one with less actual money. And since we can’t pay taxes in “attention”, this would cause the government to run short of funds.Clearly, there is no Plan B for the U.S. economy. If tens of millions have no income, and are bartering and drawing welfare to survive, then the question arises: are the remaining employed productive enough to support the tens of millions already drawing Social Security, Medicare, SSI, disability, VA pensions, etc., and all the other “pay as you go” programs?
NO MORE PENSIONS- Talk about Corprate america sticking it and the burden to the Gov’t.Traditional company pensions are going away fastThe number of companies offering traditional defined benefit pension plans was shrinking even before the recession, but the downturn has accelerated the decline. Since the beginning of the year, at least 20 companies have frozen their defined pension plans, exceeding the number of plan freezes for all of 2008. A recent survey by Watson Wyatt found that, for the offering new salaried employees only one type of retirement plan: a 401(k) or similar “defined contribution” plan.rest of article: http://www.usatoday.com/money/perfi/retirement/2009-05-first time, the majority of Fortune 100 companies are 21-traditional-pensions-dying_N.htm?loc=interstitialskip
http://sendables.jibjab.com/originals/hes_barack_obamaObama will cut unemployment by half, by taxing on middle-class and expanding federal gov employment, hehe haha.:)
my bad, is cut the deficit, hehe haha.
NO JOBS probably worse than what we are being toldSo over the past 10 years we had a Housing bubble, Stock bubble, Bank Bubble, Debt Bubble and now obvioulsy JOBS BUBBLE.In the past ten years, the following has occurred (from data in table above):The civilian population over 16 has grown by 28 millionThe labor force has grown by 16 millionThe number of those not in the labor force has grown by 12 millionThe number of jobs has grown by 7.3 millionAlthough the number of employed has increased over the 10 years by 7,259, the number of unemployed has increased by 8,715. This constitutes a relative job shrinkage of 1.5 million by subtracting the increase in the number unemployed from the increase in the number employed (7,259 – 8,715 = -1,456). If you add these two numbers together (instead of subtracting), the total is 15,794, the exact increase in the labor force reported by the DOL, so the data is internally self-consistent.Unemployment of 5% is generally considered to be the equilibrium point which is considered virtually full employment. If we were at that point today, the 7.3 million jobs gained during the past ten years would be increased by 6.8 million to 14.1 million jobs gained. That number should be compared to the increase in the labor force since 1999 of 15.5 million. This (14.1 million jobs gained) is close to the expected number 15.2 million (95% of 15.974), but is still 1.1 million short. This close to the 1.5 million found earlier for the difference between the increase in the number unemployed and the increase in the number employed over the past 10 years. It seems to me that these two numbers should be the same and I have not rationalized why they are different.rest of article at: http://seekingalpha.com/article/146565-official-unemployment-numbers-understate-the-problem#comment-571291
so how could there have been construction job growth in June when this happened? And Mr. Presidnet where are the Stimulus jobs said form contruction and shovel ready jobs?Construction spending falls more than expectedhttp://www.freep.com/article/20090701/BUSINESS07/90701031/1020/BUSINESS/Construction+spending+falls+more+than+expectedTotal public construction dropped 0.6%, the biggest decline since a 1.7% fall in January. Spending on federal projects fell 0.3%, while spending on state and local projects dropped 0.7%.
g,a cardinal bird.
How to Steal Billions in Plain View: Bernanke’s Robber Banks… As I have been saying for some time Oabma may be a nice person and i think he is, but he is inexperianced and at times I believe stupid. You are only as good as those you surround yourself with and he is surrounded by IDIOTS! Obama poll numbers will rival gearge bush numbers by dec 2009.I wish the whole dreary episode were over, but instead each day I am punished by more dreadful trial balloons and suggestions such as the latest emanating from Bernanke. There seems no end to the extent of it. Obama, the candidate of hope, comes across to me as a clueless patsy in this affair. If he understands any economics at all, he surely does not show it, not yet. According to the Wall Street Journal, he wants the second half of the $700 billion so that he won’t be caught without emergency funds if financial markets weaken further.The decisions as to what is productive or not cannot be lodged in the hands of marshals in Washington loaded with six-guns ready to shoot billion dollar bullets every which way. They have no idea what the capital pricing should be or where capital should be shifted or what enterprises should receive new capital. They are politicians, economists, lobbyists, and lawyers. And, by the way, the title of economist does not by any means suggest that a person knows anything about the ins and outs of business or what businesses should receive capital or not. Academic economists often talk and act as if they know it all, but there is no evidence that they do. There is no evidence that any person or even group of persons is able to understand and direct an entire economy. Even in individual markets, the entrepreneurs closest to the action make frequent mistakes. Directing a “financial system” to a condition of stability and progress with $350 billion is a task beyond the scope of Mr. Obama and Mr. Summers or all the king’s horses and men. They can only throw sand into the gears. They need only look at the actions of their predecessors and the directives of past administrations who brought Fannie Mae and Freddie Mac into being, who encouraged subprime lending, who allowed insurance companies to endanger policyholders by writing credit insurance, and who recently have fallen into a $150 billion black hole with AIG. Closer to home, they might look at the long list of government actions in the past 15 months that have, more often than not, ultimately been associated with lower prices of stocks and corporate bonds.Full article below:http://www.lewrockwell.com/rozeff/rozeff257.html
amazing this came from CNBC Talking clowns:”This market continues to be propped up by government intervention and manipulation.”No, really?!By the way, market manipulation is illegal.watch the video:http://www.sott.net/articles/show/188025-And-Here-It-Is-On-CNBC-ManipulationOf course when you own the police force you can do whatever you damn well please, right?
Some things never change: the BIG BANKS will screw us all until there is nothing left, No Retirements, No Savings, and of course NO JOBS. 60% of the California WARN job layoff notices through the end of 2009 (yes they project layoffs) are from the Big banks and financial firms. They obviously feel they are not going to need many employees going forward to serivce the american consumer. I wonder why?Another Citigroup Scandal: Business as Usual for Wall StreetYet another scandal was announced Monday regarding Citigroup (C). Last week, Citi announced it was temporarily suspending its mortgage securitization unit – after management “discovered” that it had never stopped buying and packaging fraudulent mortgages (i.e. mortgages lacking appraisal and/or income documentation). I suppose we should applaud management for its ‘vigilance’ – after all, it’s only been two years since the U.S. mortgage Ponzi-scheme was revealed to the world.This week, the Japanese government ordered Citigroup to cease “marketing of banking services to individuals for a month”, after the Japanese government discovered there were “inadequate internal controls” in place to prevent money-laundering.With Citigroup having been effectively “nationalized”, one would hope that the Obama regime would ensure this was the one Wall Street bank which would have cleaned up its fraudulent operations. Apparently, these career-criminals are so conditioned to ignore the legality of their actions that there is no way to stop them from immediately lapsing into their fraudulent “business model” the moment that no one is watching.It highlights the fact that nothing has been done to eliminate the “culture of crime” which saturates Wall Street – and Washington (see “U.S. bank-fraud SYSTEMIC and INTENTIONAL – William Black”). The U.S. is now a country where a former, senior banking regulator (a true “expert”) openly accuses his entire government and the entire banking sector of conspiring to perpetrate a multi-trillion dollar fraud – and it draws nothing more than a yawn from Americans.Thus, there are two problems here. The first problem is that U.S. banking oligarchs (and their political servants) see laws as nothing more than inconvenient rules, to be avoided whenever possible – just like paying taxes.The second problem is an American public which isn’t simply apathetic, but is apparently completely indifferent to its government and its financial sector. Decades of saturation-level corruption have totally numbed Americans to the fact they have the most corrupt system of any industrialized economy in the world.What is important to note here is that when Citi management discovered its mortgage securitization unit was still engaging in openly fraudulent behavior, it did not disband the unit, and there are no reports of anyone even being fired. All the company did was suspend the unit for two weeks – just long enough to apply a coat of whitewash.With this fraud-division responsible for half of Citi’s mortgage business, the only consideration was to fumigate the stench – and then put them back to work. These criminals represent the “talent” which Citi claims is so indispensable to its operations that they should be paid huge bonuses, for breaking laws and generating countless billions in losses.The other point to note here is the deafening silence of the U.S. government. Two new scandals erupt in Citigroup only a week apart, and no one in the U.S. government even has a comment to make about this.This should have been the proverbial “straw that broke the camel’s back”, and resulted in the U.S. government immediately “taking out the trash” (i.e. firing the entire management group at Citi). Where is the leadership? Where is the integrity? Where is the competence?The third missing ingredient here is media criticism. Surely after the largest mass-fraud in history was exposed (i.e. the U.S. housing bubble and corresponding mortgage Ponzi-scheme), the media would be jumping all over such scandals – just like they do when a celebrity stumbles. This is guaranteed ratings (and advertising dollars) in the U.S. market.However, U.S. “media” outlets are too busy spreading propaganda to report news. Today, Wall Street mouthpieces like Bloomberg were once again pointing toward a “bottom” in the U.S. housing market (see “Home price declines in 20 U.S. cities eased in April”). The ‘reason’ for today’s optimism? U.S. housing prices are only falling three times as fast as during the worst year of the Great Depression. Bloomberg calls this “moderation”.These weekly calls of a “bottom” in the U.S. housing market continue to occur despite the fact it is 100% certain that the U.S. housing market will continue plummeting downward for many years to come (see “The Distressing news about Distressed U.S. properties”).Once again, the overall message here is clear: it’s “business as usual” for Wall Street.http://seekingalpha.com/article/146422-another-citigroup-scandal-business-as-usual-for-wall-street?source=from_friend
These are the only type of solutions they can come up? Has anyone learned anything? add this to the no money down, cash for clunkers, zero interest auto programs- lolMortgage Refinance Program ExpandsThe Obama administration announced yesterday that it would loosen the eligibility requirements for a program aimed at helping borrowers with no equity in their homes to refinance into cheaper mortgages.Acknowledging that falling housing prices have made it increasingly difficult for borrowers to qualify, officials said the program would now be open to those whose mortgage debt is up to 125 percent of their home value. The program, launched in February, was initially open only to those borrowers who owed no more than 105 percent of their home value.The program targets the growing number of borrowers — one in five according to recent research — who owe more than their home is worth, a situation known as “being underwater.” These homeowners are considered at a higher risk of foreclosure and have been targeted by the Obama administration under its Making Home Affordable program.Borrowers have traditionally been prevented from refinancing if they had less than 20 percent equity in their home. Under the initial program, that requirement was significantly modified so that for a home worth $200,000, for example, the borrower’s mortgage could not exceed $210,000. Now, the mortgage on that house could be as much as $250,000 and still qualify for refinancing.http://www.washingtonpost.com/wp-dyn/content/article/2009/07/01/AR2009070102063.html?referrer=emailarticle
U.S. Mortgage Applications Fall 19%, Defying Obama (Update1)BloombergBy Sharon L. Lynch and Kathleen M. HowleyJuly 1 (Bloomberg) — U.S. mortgage applications fell last week by the most since February, defying efforts by President Barack Obama’s administration to revive the housing market.The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan dropped 19 percent to 444.8 in the week ended June 26 from 548.2 the prior week. The group’s refinancing gauge declined 30 percent to the lowest in seven months, while the index of purchases fell 4.5 percent.
You have to see this chart as to where we are headed with housing. Scary trend if true..Yesterday, we discussed why the Case Shiller Index, which fell 18%, was not yet cause for celebration.http://www.ritholtz.com/blog/2009/07/update-case-shiller-100-year-chart/Regular TBP reader Steve Barry created this chart last year which projected forward the ongoing losses for Case Shiller; We first ran this back in December, and it ran all over the internet (mostly without attribution).
My characterization of Obi is that he is Naïve.
Memo to Mohamed and Obama: Better stop using stress test level unemployment worst case projections. how about using 12% to 15% numbers… We are already approaching these numbers.American jobs data are worse than we thinkhttp://www.ft.com/cms/s/0/1e06911c-6719-11de-925f-00144feabdc0.htmlBy Mohamed El-ErianPublished: July 2 2009 16:16 | Last updated: July 2 2009 16:16What if the US unemployment rate rises above 10 per cent and stays there for an extended period? This is a question that is not being asked enough, even though it entails yet another historical anomaly that will further complicate policy formulation and open it up to greater political interference.The unemployment rate is traditionally characterised as a lagging indicator and, as such, is viewed as having limited predictive power. After all, unemployment is a reflection of decisions taken earlier in the cycle so the rate always lags behind the realities on the ground – or so says conventional wisdom.This conventional wisdom is valid most, but not all of the time. There are rare occasions, such as today, when we should think of the unemployment rate as much more than a lagging indicator; it has the potential to influence future economic behaviours and outlooks.Today’s broader interpretation is warranted by two factors: the speed and extent of the recent rise in the unemployment rate; and, the likelihood that it will persist at high levels for a prolonged period of time. As a result, the unemployment rate will increasingly disrupt an economy that, hitherto, has been influenced mainly by large-scale dislocations in the financial system.In just 16 months, the US unemployment rate has doubled from 4.8 per cent to 9.5 per cent, a remarkable surge by virtually any modern-day metric. It is also likely that the 9.5 per cent rate understates the extent to which labour market conditions are deteriorating. Just witness the increasing number of companies asking employees to take unpaid leave. Meanwhile, after several years of decline, the labour participation rate has started to edge higher as people postpone their retirements and as challenging family finances force second earners to enter the job market.Notwithstanding its recent surge, the unemployment rate is likely to rise even further, reaching 10 per cent by the end of this year and potentially going beyond that. Indeed, the rate may not peak until 2010, in the 10.5-11 per cent range; and it will likely stay there for a while given the lacklustre shift from inventory rebuilding to consumption, investment and exports.Beyond the public sector hiring spree fuelled by the fiscal stimulus package, the post-bubble US economy faces considerable headwinds to sustainable job creation. It takes time to restructure an economy that became over-dependent on finance and leverage. Meanwhile, companies will use this period to shed less productive workers. This will disrupt consumption already reeling from a large negative wealth shock due to the precipitous decline in house prices. Consumption will be further undermined by uncertainties about wages.This possibility of a very high and persistent unemployment rate is not, as yet, part of the mainstream deliberations. Instead, the persistent domination of a “mean reversion” mindset leads to excessive optimism regarding how quickly the rate will max out, and how fast it converges back to the 5 per cent level for the Nairu (non-accelerating inflation rate of unemployment).The US faces a material probability of both a higher Nairu (in the 7 per cent range) and, relative to recent history, a much slower convergence of the actual unemployment rate to this new level. This paradigm shift will complicate an already complex challenge facing policymakers. They will have to recalibrate fiscal and monetary stimulus to recognise the fact that “temporary and targeted” stimulus will be less potent than anticipated. But the inclination to increase the dose of stimulus will be tempered by the fact that, as the fiscal picture deteriorates rapidly, the economy is less able to rely on future growth to counter the risk of a debt trap.Politics will add to the policy complications. The combination of stubbornly high unemployment and growing government debt will not play well. The rest of the world should also worry. Persistently high unemployment fuels protectionist tendencies. Think of this as yet another illustration of the fact that the US economy is on a bumpy journey to a new normal. The longer this reality is denied, the greater will be the cost to society of restoring economic stability.
The second problem is an American public which isn’t simply apathetic, but is apparently completely indifferent to its government and its financial sector. Decades of saturation-level corruption have totally numbed Americans to the fact they have the most corrupt system of any industrialized economy in the world.
The bold phrase would be me – for I have not voted since Ross Perot in 1992 – I gave up after that fiasco. The entire system has been hijacked and there is nothing one can do about it except try to decouple from as much dependence on it as possible.Thus generating your own power would be one way to start decoupling. We are on Pacific Power in CA and Warren Buffet owns it. Rates have been going up; 20% in 2007; 15% in 2008. Can’t wait to see 2009.
Did anyone notice how a week ago it was 24 Billion and now its 26 Billion? 2 months ago they said it was 10-12 Billion. so what happens when they dont pay off the IOU’s in three months? The California problem is not 26 Billion, with current run rates of Tax revenues falling off a cliff, I estimate the current problem closer to 30 billion and climbing by 1.5 Billion a month. Californai could very well see Revenues drop to 50-58 Billion by this time 2010. How do they then plug the current spending gap where they spend over 110B.I said 6 months ago the total Calif State budget deficit 08/09 problem was approaching 60 Billion and Calif was saying it was only 40 billion… Well we have passed that by at least 25-30 Billion. and that was all before State Revenues really sarted tanking. BTW ever f..king county, city and local budget is in the same shape. We have the state now taking local revenues from the cities, counties and giving them IOU’s to piad back within three years. this is one big ponzi scheme. San Francisco – a city fo less than 1 million has a deficit of 1/2 billion they say now.this entire F..king State is a mess. I estimate all State, county, city, local deficits to be 80-90 Billion now. and if what happens in california is harbinger of what is coming for the rest of the country… buckle up… Dont think for one second Oabma and his minions know this State deficit problem is looming in almost everys state.California will pay an interest rate of 3.75 percent on IOUs it will begin using today to pay its bills, a panel decided, as Governor Arnold Schwarzenegger and lawmakers remain deadlocked over how to close a $26 billion budget deficit.
NO JOBS- Bear in mind these are announced and only fortune 500. the number may seem small, but its because fortune 500 doesnt account for majority of employment in this country. Small and medium size buusniess accoutns for approx 70%, Govt jobs close to another 12-12%.Pink SlipsLayoff TrackerNumber of layoffs since Nov. 1, 2008, at America’s 500 largest public companies*:579,372*Total announced layoffs at America’s 500 largest public companies as measured by a composite ranking of sales, profits, assets and market value since Nov. 1 2008. Includes layoffs at subsidiaries, joint ventures, and majority owned companies.http://www.forbes.com/2008/11/17/layoff-tracker-unemployement-lead-cx_kk_1118tracker.html
Since when do renters put up with neighborhood problems and higher rents? Last time I looked, with a little friction or higher payments, they’re out of there.And last time I looked those who “toil not, neither do they spin,” or who are on “economic assistance,” do not live on an “undeveloped lot with a shack and an outhouse.” Some live next door to you, with zero-down mortgages, zero to 2% interest on their monthly payments (often cheaper than rent), government-paid house insurance, taxpayer co-paid utility bills and property taxes, free day care and after-school care at the public library with computer access and free-tuition college for their children, plus free legal help and medical care. And food stamps. Many who pay no taxes receive up to a maximum of $4824 (filing jointly) in taxpayer cash as earned income credit (EIC) for two children “if the amount you are looking up from the [IRS EIC] worksheet is “between $12,050 and $16,000 (reducing to $4810 at $12,049 to $10 cash at $1).And, by the way, there is no such thing as an “undeveloped” lot. You’re going to pay a lot on that lot and shack, even if you don’t have water and sewage. That shack can cost you, brother. And I don’t want to be there when the health inspector comes around to check your hotplate and outhouse
See some of the most recent layoffs announced in past few days below:State, county, local, police, teachers, jails, all startign to get hit all over the country…the most apalling is Education, library related. Did not Obama make education one of his top three promises/priorities to make it better and stronger…Just to put NO JOBS in perespective. Using June job loss of “473K” ( i beleive it was well over 700k), but using 473k and appyling avg household size of 2.7 to that number approxiamtely 1 Million, 277 Hundred and seventy seven thousand, people had thier lives turned upside down in june. Anyone think for a second those folks in general are enjoying thier July 4th holiday and looking forward to Christmas?Falling incomes could continue to depress housing pricesKrugman calls for bigger stimulus in the face of terrible June jobs reportZero job growth: 1999-2009University of Illinois -8Judge blocks Hawaii furloughs; Governor may resort to layoffsSolana County, CA -73Muncie, IN potential police layoffsRainier School -40″Forewarn Act” could expand on the WARN actFlosom, CA schools potential laoyffs -60Prestage Farms -200Onandaga County, NY considers layoffs to reduce budget shortfallHarvard University -77Tegrant Corp. -12Iowa Public Radio -5Wellpoint Health -50Older unemployed workers struggle to find jobsWesCorp -90TNT Post (The Netherlands) -11,000——————————————————————————–Thu 7-2-2009Comment on today’s layoff newsEuropean Union unemployment rises to 9.5%, peak predicted at 11.5%TruTV -106Embarq -30Teleperformance USA -250Austrian Airlines (EU) -1,000West Corp. potential layoffs -176Big Dog Motorcycles -20Evite -9Allied Systems Holdings -120″Recession-proof” schoolteachers feeling the pinchCanadia Pacific Railways temp layoffs -2,700Oslers (Canada) -23Mercury Marine layoffs loomingTexas A&M Athletics -17Layoffs likely for Pasco County, FL5% unemployment could be a decade away (Cranky: or never)FRC Components -13Widen Enterprises -15Pendelton Wollen Mills -43Springboro, OH Community Schools -13Highland County, FL potential layoffs -22Montgomery County, OH Courts -12Oracle Corp. (EU) -1,000Ruden McClosky -8Bay City, MI fire department update -6Marie Selby Botanical Gardens -7City of Margate, FL potential layoffsEmployment Report: 467K Jobs lost in June, unemployment rate remains at 9.5%Ontario Systems -35Las Vegas Sands Corp. -194Ford Motor Corp. -275National Steel Car Corp. (Canada) -600City of Escondito, CA -25Konecranes -41Monson Trucking -200Chicago Public Schools layoffs take effect -557California hotel forclosures double in 90 daysCrabtree & Evelyn Boutiques file for bankruptcyCaribbean in economic freefallGehl Company -72Lake County, FL clerk of courts -10Charlotte & Mecklenburg Schools layoff update -1,176Cam Mining layoffs in progressLayoffs looming for city of Yakima, CAClermont County, OH public library -24Scholarship America -17Warren OH police dept. -8City of Atlanta, GA jail workers -109
Nassim goes off…’We’re in the Middle of a Crash’: Black Swanvideo at:http://www.cnbc.com/id/31706523
Bank Failure Thursday: 7 tonightThe long weekend will give FDIC extra time to clean up this week’s failures. So far they’ve announced two, three, six, seven. Last Friday’s total of five bank failures had been the largest number so far this year.Six of tonight’s failures are in Illinois. The seventh announced failure is a big one, with nearly $1.0 billion of assets. As the evening progresses, I expect there will be more failures in the Mountain and/or Pacific time zones. Looks like tonight’s total will stay at seven. A record day so far this cycle!Bank Failure #46 for 2009Bank: John Warner Bank, Clinton, ILBuyer: State Bank of Lincoln, Lincoln, ILVitals: At 4/30/09, assets of $70 million and deposits of $64 millionDIF Damage: $10 million#47Bank: First State Bank of Winchester, Winchester, ILBuyer: First National Bank of Beardstown, Beardstown, ILVitals: At 4/30/09, assets of $36 million and deposits of $34 millionDIF Damage: $6 millionInsert funny Beardstown Ladies joke here. Yes, they still have a website, though it doesn’t appear to have been updated in awhile.#48Bank: Rock River Bank, Oregon, ILBuyer: Harvard State Bank, Harvard, ILVitals: At 4/30/09, assets of $77 million and deposits of $75.8 millionDIF Damage: $27.6 millionSince the beginning of 2008, ten banks have failed in Illinois. Georgia still claims the top spot with 14.6:20 update: Wow. Three more bank failure notices just hit my inbox, bringing the total to six for the evening. And five of them are in Illinois! I thought FDIC might take advantage of the long weekend, but jeez. Doesn’t Sheila Bair plan on catching any fireworks?#49Bank: Elizabeth State Bank, Elizabeth, ILBuyer: Galena State Bank and Trust, Galena, ILVitals: At 4/30/09, assets of $55.5 million and deposits of $50.4 millionDIF Damage: $11.2 million#50Bank: First National Bank of Danville, Danville, ILBuyer: First Financial Bank, National Association, Terre Haute, INVitals: At 4/30/09, assets of $166 million and deposits of $147 millionDIF Damage: $24 millionIllinois now up to 12!#51Bank: Millennium State Bank of Texas, Dallas, TXBuyer: State Bank of Texas, Irving, TXVitals: At 6/30/09, assets of $118 million and deposits of $115 millionDIF Damage: $47 million#52Bank: Founders Bank, Worth, ILBuyer: The Private Bank and Trust Co., Chicago, ILVitals: At 6/30/09, assets of $962.5 million and deposits of $848.9 millionDIF Damage: $188.5 millionA big one. And another in Illinois. One more to go to catch Georgia!http://blogs.reuters.com/rolfe-winkler/2009/07/02/bank-failure-frierthursday/
here an old story relayed in song of folkunderdog variety..todd snider”d.b. cooper”.http://www.youtube.com/watch?v=BIU_0DG_xAU&feature=fvw.lyric..D.B Cooper was 43 when we first heard his name47 miles away from where he fell down to his fameBut he told me that the hardest part wasn’t really jumping out of the planeIt was spending the night watching those lightsShine through the pouring rainThey had a man hunt that next morning like nothing I had ever seenI was only 8 years old at the time watching on a TV screenThey were saying he was never gonna make it now, now that daylight had set inBut later that night they were shining those lightsDown on the mountain againNot far away from the City of RosesThey all watched those lights up through the rainFor D.B. CooperThe cops blocked off all the exit roads and turned loose all of the houndsThey even dragged the river up a couple of times to see if he had drownedWith all those men working overtime they swore they would bring him downBut a parachute and a few hundred dollarsWas all that they ever foundNot far away from the City of RosesThey all watched those lights up through the rainNow some people say that he died up there somewhere in the rain and the windOther people say that he got away but his girlfriend did him inThe law men say if he is out there someday they’re gonna bring him inAs for me, I hope they never seeD.B. Cooper againNot far away from the City of RosesA light shined from a house out in the rainIt was D.B. CooperDrinking champagne………………………..to this day this crime is unsolved and remainsa blemish on the record of the investigative authorities. 200,000. dollars missing. i don’tknow if the amount of money spent on the investigation has ever been calculated but itwould be in the multiple millions for sure. afterall, who can put a price on justice?and then there are credit default swaps collapsed counter parties and socialization of losses andbailouts for the billionaires etc..anyway…who can put a price tag on justice?
See the charts at: http://blog.youwalkaway.com/10 Things We Know FOR-clo-SURE10 things we know FOR SURE are:1. Not all Foreclosures are being stalled by the moratorium.California Foreclosure Prevention Act imposed a 90-day moratorium on housing foreclosures under a new law that took effect Monday. California Assemblyman Ted Lieu said “We’re getting about 80 to 90,000 foreclosure filings every month. That’s one every 30 seconds”What else are they going to do but try to stall foreclosures? The lenders simply cannot get to all the people who need help. By stalling them, at least they may be able to modify more loans and thwart off some foreclosures. Some lenders would rather just foreclose. On the flip side, many people may look at this as a chance to simply stay in their homes for free for another 90 days and ultimately still walk away. I have personally seen several cases at You Walk Away where the lender simply will not take back the property. (Mostly jumbo loans)There is a list of lenders who have become exempt from this moratorium click here to see the list.2. Banks are holding back REO’sThis is a genius move by the Banks / Lenders. By holding back the REO inventory on the market, they are manipulating the supply and demand on Foreclosed homes and creating a feeling of scarcity. There should be no wonder right now why there are multiple offers on REO properties. If the banks were to dump there properties on to the market all at once, all the values would drop drastically and there would be no demand.Recently I sat across the desk from a bulk REO purchaser and he was complaining that the bulk buying of REO “tape” has seemingly dried up and they were moving into bulk buying of distressed notes.3. Unemployment is on the riseTaken from an AP article on July 2, 2009, The Labor Department is scheduled to release a report Thursday expected to show the nation’s unemployment rate edging closer to double digits. Wall Street economists predict the jobless rate will rise to 9.6 percent in June from 9.4 percent in May. That would mark a 26-year high.The rising rate comes as recession-weary companies continue to cut workers. Economists expect a loss of 363,000 jobs in June, up from 345,000 job cuts in May. Economists believe a chunk of those cuts will be tied to shutdowns at General Motors Corp. and fallout from the troubled auto industry.Today we found out that there were actually 467,000 job losses in the month of June. That was about 100,000 more than economists predicted.4. People are running out of money!People I know are saving more than ever. Others are doing their “Last hurrah” just before filing BK. But one thing I know for sure is that the money in our economy is shrinking and people have less and less to spend. Many are also starting to save, thinking they may need it if they lose their job or if the economy worsens. While running out of money, people are maxing out credit cards to supplement income. See this chart taken from Bloomberg.5. Credit card defaults are soaringCredit card defaults are on the rise and so are bankruptcies. At YouWalkAway.com we hear constantly that people are still using their credit cards to pay their mortgage payments. Sometimes our customers come to us just as they used the last of their credit card limit and / or their savings. Others (IMHO) come sooner, before they max out their credit cards, use all their savings and deplete their retirement accounts on a losing asset. Once your credit has reached its limit, your savings and retirement are gone, it’s going to be a much harder to get back than the 3 years it takes to be able to buy a home again after a foreclosure.Taken from CNN Money.com, Bank of America (BAC, Fortune 500), the nation’s largest bank, said its default rate jumped to 12.5% in May from 10.5% the month before. Other major banks, including Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Capital One (COF, Fortune 500), also reported increases in May default rates.6. A large % of real estate sales are investors/speculatorsI talk with real estate agents on a regular basis, one of the most common things I hear is cash offers. Investors have cash, not first time home buyers.In Ft. Meyers, Florida almost 60% cash buyers!Of the 6,474 homes sold in Lee County between Jan. 1 and May 31, almost 60 percent went to cash buyers. The proportion of cash buyers is even higher on foreclosed properties. About 64 percent of bank-owned properties are going to buyers with cash.7. Loan applications are down and loans are ridiculously difficult to get.A reduction in average mortgage rates last week didn’t stop the decline in applicationsfor home loans, the Mortgage Bankers Assn. reported this morning.The refinance boom continued to fizzle out, with applications down 30% from the previousweek, to the lowest level since November. Purchase applicationsfell by 4.5%, according to the report, which you can read at the website below.http://www.mbaa.org/NewsandMedia/PressCenter/69498.htmRecently I spoke to a loan officer relative of mine in the Mortgage industry. She said that people at her (very large lender) were quitting their jobs because it was SO difficult to get a loan funded. People all over are reporting how difficult it has become to get a mortgage loan. The lenders keep asking for more and more documentation and delay the process so long that people either lose their rate locks, or can’t close escrow on time.Cnnmoney.com reported today that: Mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30%, data from an industry group showed Wednesday.At http://www.youwalkaway.com we speak to people everyday who have recently tried to refinance or get a loan modification… Declined, declined, declined.8. Lenders are modifying loansMortgageDaily.com reported on Tuesday, June 30th that:Chase Hires 1,000s as Mod Activity LeapsJPMorgan Chase & Co.’s banking business has approved more than 100,000 trial loan modifications during the past three months, and the company is pleased so far with first-payment activity. Thousands of new employees have been hired to handle increased modification and origination activity.From April 6 through June 30, the New York-based institution approved 138,000 trial mortgage modifications, an announcement today said.Included in the total were 87,100 modifications under the Making Home Affordable program and 50,900 of its own modifications.9. People are walking away from their modified loansAn Attorney friend of mine who runs a Law Firm in San Diego told me recently that he has noticed a good number of homeowners that receive a loan modification, feel that the new modified terms are “just not good enough” and they would rather walk away from the property. The number of people re-defaulting on modified loans is anywhere between 24%-60% depending on the type of modification.Here’s what the JP Morgan analyst said about the data they pulled together from the Loan Performance database.Moving on to the subject of re-default, we note that the overall re-default rate stands at 40%. Breaking that number out by modification methods, we observe that capitalization has the highest re-default rate of 54%, and rate reduction the lowest of 24%. Also, the more severe the starting delinquency status before modification, the higher the re-default rate (Table 7). Despite rate reductions seemingly being more effective than principal forgiveness in terms of re-defaults, we note that lowering the balance of a mortgage through a modification by 20% or more results in a re-default rate of 32%, compared to 43% when the balance is increased (mainly due to capitalization)—i.e., balance modifications impact redefault rates.There also seems to be a strong correlation between monthly payment amounts and re-defaults (Table 6), reaching from 26% of modified borrowers re-defaulting when their payment drops by 30% or more, to 59% redefaulting when the payment increases. Given the mechanics of capitalization (delinquent amount is added to the loan balance and the loan is re-amortized resulting in higher payments) and the high re-default rates with an increase in monthly payment, it is obvious that the payment increase is the main driver for high re-default rates when capitalization is applied. Therefore the combination of capitalization and rate reduction, which results in an unchanged or decreased monthly payment 94% of the time and a re-default rate of 41%, is much more effective than just capitalization with a 54% redefault rate. Additionally, 66% of re-defaults happen within six months after modification. We think a 40% re-default rate for modified loans is reasonable going forward.10. Many Homeowners are still delusional about their property valueWhy wouldn’t they… the real estate market is recovering!!!! (sarcasm of course)
The Scariest Jobs Chart Everhttp://www.businessinsider.com/henry-blodget-the-scariest-jobs-chart-ever-2009-7
Michele – you and i dont usually diasagree… Where are jobs being created? I have to agree with Mark. The banks are sitting on at least 3 trillion of toxic debt still, that is why they are not lending. Venture firms like Colony and Draper are buying distressed assests at firesale prices… hoping to off them at high profit margin if things improve or jsut to have them and then use those assests to pillage the average consumer. They ar enot creating jobs…I am partnered with Tim Draper in a sports related buisness and I can assure you the only growth he sees is overseas and not in the US. Draper is the number one VC firm in Silicon valley.
I said before George W Bush the second idiot got elected, he came across to me as the dumbest (stupid, lack of inteliigence, lack of common sense) person i ever saw aspiring to any sort of leadership posistion, let alone president. Well when I saw when Oabma got the nomination i said to anyone who asked my opinion that he would make W look smart… so far he is not disproving what i felt. I did not vote for for bush or obama. i am an idepenedent and would never support either of the 2 “big” parties and never have.
Why should he be any more right than anyone else about where the bottom will be?
Happy 4th of July to everyone, most especially to those with NO JOBS!. You are not alone and most of those still working (125M or so average, good hearted Americans, not Giethener, not Bernanke, not Pandit, not Blankfien and all their cronies)do care about those not working.
matt taibbijuly. 2 2009 — 11:56 pmGoldman Sachs is reeling under public pressure.http://trueslant.com/matttaibbi/.Goldamn Sachs Chairman and CEO Lloyd Blankfein attends a panel in Washington DC in November 2008 (Chip Somodevilla/Getty Images)You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit). We may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body and in compliance with applicable law and regulation.via Is Goldman Legally Frontrunning Its Clients? | zero hedge.After watching its thoroughly maladroit handling of several p.r. problems this week, I’m absolutely convinced that Goldman Sachs can be hurt if enough people keep piling on with the pressure. The latest evidence of this is its abject collapse in the face of questions from Zero Hedge about the possibility that it is using the data its takes from users of its website to front-run those same people.Front-running takes place when a bank or broker-dealer– say, Goldman, Sachs — executes a trade for its own account before filling its customer’s order. Since a large enough trade (executed by institutional investors, for instance) can actually move the price of the security in question, front-running can be a very profitable activity. It’s sort of like fast-food insider trading. It is common knowledge that front-running on Wall Street is rampant, and I interviewed more than one person for my recent Rolling Stone story who accused Goldman of front-running its big clients in all sorts of arenas, from the internet IPO years to the commodities markets……
Joey makes a living/has a job doing this… and at least he kpet the title here in the USJoey Chestnut Beats Takeru Kobayashi: New Competitive Eating Record——————————————————————————–July 4th is America’s Independence Day and is celebrated in a variety of ways with various traditions including fireworks mass consumption of hot dogs. New York’s Coney island is the stage and its Joey Chestnut vs. Takeru Kobayashi with a few fireworks and a Competitive Eating festival for the world’s best.NEW YORK (AP) — Reigning champ Joey Chestnut has logged his third consecutive win in Coney Island’s annual hot dog eating contest with a world-record 68 franks.He defeated his archrival, six-time titleholder Takeru Kobayashi (tah-KEHR’-roo koh-by-YAH’-shee), in Saturday’s bout. Chestnut led throughout the contest.Last year’s event initially ended in a tie, with Chestnut and Kobayashi both gobbling down 59 hot dogs and buns in 10 minutes. Chestnut went on to win a dramatic five hot dog eat-off.This year’s Nathan’s Famous Fourth of July International Hot Dog Eating Contest was broadcast live on ESPN.Chestnut is from San Jose, Calif. Kobayashi is from Japan.
GOLDMAN NEEDS TO GO AWAY- FOREVER… Get rid of/shut Goldman down and we then can astart to address the nations problems…Goldman Sachs Responds To Zero HedgeSubmitted by Tyler Durden on Thu, 07/02/2009 – 11:16http://www.zerohedge.com/node/12118Goldman Sachs Program Trading SLPIt seems quite a few individuals noticed our post attempting to justify some very peculiar language in not just a certain Goldman Sachs Internet disclaimer, but also the strange wording prominently featured in critical GS-client agreements. One happened to be Goldman Sachs itself. We take this opportunity to present the response by Goldman Sachs’ spokesman Ed Canaday:Dear Mr Durbin:This is in response to your recent blog about our web site disclaimer. It is quite usual for websites to have disclaimers that refer to the monitoring of site usage. Most web sites, including yours we noticed, track usage by their visitors. This is primarily used for marketing and to help inform decision about enhancing content.Your suggestion that we monitor our web site to facilitate front-running is untrue and offensive.SincerelyEd CanadayVice PresidentGoldman, Sachs & Co.____________________Ed CanadayOffice: xxx-xxx-xxxxCell: xxx-xxx-xxxxWe are happy to have caught the attention of Mr. Canaday. We believe this is the start of a great ongoing dialog. In that vein, Marla has replied to Mr. Canaday and Goldman Sachs, attempting to elaborate on some of the point that Ed did not touch upon. I present it below and am looking forward for Goldman’s forthcoming reponse:Dear Mr. Canady:Thanks for your quick reply.For your future reference, the correct spelling for “Tyler” is “Tyler Durden.” (A re-viewing of “Fight Club” might be in order, but I know Goldman VPs probably rarely have time for such luxuries).Obviously, we want to make sure we have our facts correct so I am pleased to see your email. Perhaps you can lay to rest some questions we have for the record:1. Indeed, data use disclaimers are a common feature on most websites. Still, I think you will agree that where usage patterns are so directly linked with potential investment activity and customer intentions it is a bit unusual not to have a more explicit description of the kind of use Goldman intends here. This is particularly so where customer attitudes are concerned, and appearances are important. “Internal business purposes” is a bit vague in this respect, don’t you find? This seems unlike Goldman, usually a firm known for very careful attention to detail. Why is a more specific description of such purposes not included? I would think that easier than explaining the matter repeatedly to random bloggers (and customers).2. I notice that you have not taken the opportunity to address similar disclaimer language in the form contracts used by Goldman and Spear, Leeds and Kellogg. Was this omission intentional or an oversight? (For your reference you can find the language we are curious about here: http://www.zerohedge.com/node/12083). “You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit). We may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body and in compliance with applicable law and regulation.”Not to be a stickler, but the drafting here seems quite careless.Note the differing terms between the website disclaimer “…the resultant information may be used by GS for its internal business purposes OR in accordance with the rules of any applicable regulatory or self-regulatory organization….” (emphasis added) and the form disclaimer “…we may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body AND in compliance with applicable law and regulation….” (emphasis added).As a reformed legal professional myself, this seems a bit sloppy to me. Can you comment on the language and in particular why a more explicit definition of “internal business purposes” is not included?3. I also notice that you do not specifically address our question:”…has Goldman has ever actually used 360 submitted information in the decision making process of its prop trading desk?” Could you give us a response there? Perhaps you might augment that to include the decision making process of any Goldman investment decisions rather than just the prop desk and all information Goldman collects about 360 users.And lastly, while we have your attention, we were hoping you could make a statement for Zero Hedge and its readers on the long discussed topic on our pages regarding Goldman Sachs’ effective monopolization of Principal Program Trading in the New York Stock Exchange. In other venues you have attributed this domination solely to Goldman’s selection as the one and only SLP currently used by the NYSE. Would you care to elaborate how that fits in with the NYSE’s upcoming changes to their DPTR (http://www.zerohedge.com/node/11769)specifically as pertaining to J and K account type indicators. Was Goldman in any way consulted in the making of this decision by the NYSE? Did Goldman have any direct communication with the SEC on this issue?Thanks for your help with these matters. As an aside, if there is a contact at Goldman we can routinely direct these questions to that might be helpful for both of us going forward. I look forward to hearing from you.Best Regards,”Marla Singer”
watch Matt Taibi interview…http://watch.bnn.ca/the-close/july-2009/the-close-july-2-2009/#clip189690
Now there’s a man who knows his subject. Thanks MM CA. You made my day!
b,or maybe a coocoonoo.g.
The Great American Bubble MachineMatt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great DepressionRead the entire article here: http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine
the video is here too… amazing how they had thier dirty hands in the gas prices last summer, when i was paying 5.00 a gallon out here in calif.http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine
g,i could be wrong ( again ) but i was thinkingsome manner of electrician. or a dove? or maybean old owl with night vision? b.? it’s g. very closeon the pad.
How severe and how low will equity and commodity asset valuations collapse? While the science of debt dependent nonlinear saturation macroeconomics quantifies the timing of the lows (and highs) and predicts when the asset valuation saturation areas will occur, the science cannot predict and can not quantify the degree of liquidation lows. The low valuations are dependent on parameters under the umbrella of possible governmental and monetary policy and hence the financial industry interventions and novel manipulationsWhat is known is that at the lows of asset valuations, those with access to credit and those capable of fabricating credit will have the first chance of buying and ‘owning’ those depressed assets, renting those assets to the newly impoverished and enserfed citizen class, and making massive subsequent profits. It will be the Goldman Sachs equivalent industries who, partnering with and controlling the treasury and federal reserve, have, without a shred of ethics or decency, so manipulated the money system and so perversely. These hated institutions have lended money they did not have to people who could not afford further debt obligation and have magically back filled losses with the help of their sister federal bankers and in-pocket and lobbied and funded politicians by stealing future citizen tax dollars. Their manipulation of the US money supply is an economic and financial system gaming travesty.In the near future to discover who, besides Goldman Sachs has access to credit and who is and has been authorized to fabricate credit without reserve assets, all that is needed will be a review of the US 2009 IRS litmus test. Those individuals and financial institutions showing money derivative profits, ie equity, futures, options, et. al. profits …. in the worse real economy of citizen job year loss in seventy years …. are exactly, exactly …. the criminals who have so profited and so destabilized the world. Those showing IRS profits in 2009 are the predatory money lenders, the money counterfeiters, the money leveragers, the money manipulators, money skimmers – and the destroyers of the Western middle class.As the country is slowly destabilized with the loss of its middle class and the progressive loss of its wage dependent real estate valuation, social political strains are likely to produce popular extremist candidates who will review those 2009 tax returns.
@The Fractalistdoubtful… political noise and theatre…yelling…but most of all lies, lies, lies and promises, promises, promises
US companies may cook their earnings, especially the banks, and the stock market may rise…but Dr.Roubini was correct in calling this a sucker’s rally…the real unemployment/underemployment along with the large number of welfare clients equals the “25% unemployment” rate of the Great Depression…and sooner or later reality cannot be deniednote: Dr. Roubini also says that by December, 8 1/2 million with home mortgages will no longer have a job to pay their taxes or mortgagesUSA is in the Great Depression
@MM Ca, it’s worse even than all that. All govt. employees have received a 14.5% pay cut in the past 4 months. Direct layoffs and indirect layoffs from cutting $25 billion from the state budget will cause massive new defaults on mortgages. Add to that that CA has suspended all foreclosure activity for 90 days, which expires in 2 months, and a new wave of price drops in CA real-estate is looming large.All of that will lead to major reductions in CA income tax revenues and property tax revenues.CA debt rating is almost junk. The state can’t get a budget agreement even under the VERY optimistic scenario that they are pretending is only $26 billion. This state is bankrupt. It is the first major word economy to fail (Iceland might have arguably been first actually), they just haven’t realized it yet.CA may be lucky, though. They may be early enough that their total failure will force the Fed to intervene as a too big to fail state. Such intervention will instantly spark outrage in other states and municipalities that have problems, and the Fed will then have a real bind – inasmuch as they will be unable to bail them all out.This CA situation has received much too little attention imho. This is a major black swan event emerging, and it is sidelined to coverage of Michael Jackson and some silly unemployment numbers, even in the LA Times…–Brian
http://www.deficitsdomatter.org/?gclid=CO_Xnpj3kJgCFQRhswodCVhQnwoh god, this is scary stuff. look at how this thing run. USA economy in toilet.
with ballooning gov debt (local, state, federal level), it is hard to imagine that money supply will have no choice but to balloon by same amount in future. this is scary stuff, USA economy and currency all in toilet.
g,Well, live and learn. Woonoo? Yoo?I didn’t, that hoocoodanode is a WORD!!“used, typically somewhat pejoratively,to poke fun at the meme that ‘noonecould have (or did) foresee the economic crises’coming on” and “noone” means no one, likein nobody!Personally, I think it has something toodoo withnodes of Ranvier. But if I do get an owl,for sure I’ll name him Hoocoodanode!Sorry about the “b.” I was sure you were blindman,one of NR’s most visionary quipsterposters.Forgive my presumptuousness. But glad toonooyoo.g.g.
not mentioning, tax will have no choice but to balloon to 1/2 amount to cut deficit by 1/2 hehe haha.
i agree with all you said, i posted when Jacko died that no one would cover the California budget diasaster or problems for a few weeksuntil they are done with Jacko. they got lucky because its flying under the radar for now. But as you point out, there are many other problems that will be occuring over the next year or two out here. They could literally have millions without food and shelter. the state will be the first to see the national guard called out to control all the distress… Lets see how many people are roaming LA on tuesday for Jackos funeral and also how many nationally are watching on TV- we’ll get a good idea how many people ar enot working…BTW California U3 unemployment may have passed 12% in june…
or USA will have no choice but to default 1/2 amount directly or indirectly (print money). in the end, all these funny paper is bad to USA.
gg,for the record you are correct. what bothers meis i’m not able to identify your other gnomesde plum! so you win. damn.i like the “who cooed anode” permutation. if youthink about it in relation to “who coulda’ knowed”you might come up with a name or two who coulda’knowed and actually explained it in terms of anodesand their indispensable partners, cathodes.anyway, this is where i found the owl and theelectrician, a story from long ago and furtheraway, i suppose,he said as we proceeded into the abysmal abyss.
@MM CAI know this post is going to p*** off a number of your fans but in one of the 20 very recent posts you’ve made, sixteen consecutive I might add, you mentioned your role at a Fortune 60 company. Could you give me the symbol please, so I can short it on Monday?Also, I think some counselling is in order. Have you nothing better to do with your time.Sincerely,Guest 67
Question:Could China, Japan, etc. all demand that all US treasuries they now hold be converted from $ to their local currency? In this manner their investment is protected if the dollar tanks.I guess if they should insist on this now that would put the brakes on the run away wet dreams of the ObamaNation of Desolation.
b,Inooanode. You’re Dr. Seuss.“Today you are You, that is truer than true.There is no one alive who is Youer than You.Be who you are and say what you feel” buthoocoodanode till it was revealed.I like you, b. You’re my kinda poet.gg
Well, I for one like MM CA’s posts. She is right on to post all this information that other folks seem to have taken their eyes off. Plus I trust this person sees things only one close to the fray can see. Thus the concern and outrage.What is a Fortune 60 company?
Foreign governments were the largest buyers of Treasury auctions in the last month, if the Fed`s info is believable. Seems to fly in the face of everything we read. They seem to talk one game and play another.
Re Fortune 60: Not sure myself. See his or her post at 9:34 this morning.
NO CASH FOR SOME JOBLESS | Detroit Free Press34% of out-of-work Michiganders can’t collect assistanceJune 20, 2009 –Despite billions of federal dollars being poured into Michigan’s unemployment benefits program, the safety net for jobless workers doesn’t stretch far or wide enough for a growing number of residents as the state jobless rate hits its highest mark in a quarter-century.More than 232,000 jobless Michiganders — 34% of the unemployed — were not eligible for benefits due to the program’s rules, many of which were established decades ago.Another major problem: A growing number of unemployed residents are running out of the benefits, even though payments have been extended several times.The Michigan Unemployment Insurance Agency estimates that between May and December, more than 99,000 Michiganders will have exhausted their 79-week benefits. They face a job market that’s expected to get only worse as more auto plants close…OUT OF THE SAFETY NETEveryone who loses their job doesn’t automatically qualify for unemployment benefits. Under state [Michigan] regulations, here are some of the categories of workers who cannot receive aid:– Workers who made less than $4,306.50 during a specific time frame determined by the state.– Self-employed workers.– Independent contractors.– Part-time workers who are looking for another part-time job.– Real-estate salespeople, investment company sales representatives and insurance agents and solicitors who are paid wholly or mainly on commission.– Some home improvement and home remodeling salespeople.– Farm workers, except those who work for an employer with a cash payroll of at least $20,000 in a calendar quarter.– Religious organization workers, though some organizations have voluntarily elected to cover their employees.– Household workers, except those who work for employers with a cash payroll of at least $1,000 in a calendar quarter.– Elected officials and government officials in major policymaking positions.Source: Michigan Unemployment Insurance Agencyhttp://www.freep.com/article/20090620/BUSINESS06/906200430/
Fortune 500 (or 1000 or 100, etc.) definitionthe 500 (or 1000, 100, etc.) largest U.S. industrial corporations as ranked according to sales volume
This is a perfect rose. It’s for MM CA.This is a pointed thorn. It’s for Guest 67.
In this modern age, Justice is the non-negotiable price of survival.
… Here, now, are excerpts from Matt Taibbi’s piece and video of Taibbi exploring the key issues.Sorry it’s not the entire article.
Happy 4th of July to everyone, most especially to those with NO JOBS!. You are not alone and most of those still working (125M or so average, good hearted Americans, not Giethener, not Bernanke, not Pandit, not Blankfien and all their cronies) do care about those not working.Hide reply Reply to this comment By MM CA on 2009-07-04 12:46:02I feel like re-pasting this lovely thoughtfulness 20 times in a row, but I’ll limit myself to the one repeat and just go celebrate you, MM CA, for having the soul to say it out loud.
Repost of same info in post 23 from the top.
auspicious occasions require just the right sentiments expressedin a manner suiting the circumstance.so here, from the horses mouth, on this 4th of july.mark twain , aka s.c. etc….FOURTH OF JULYStatistics show that we lose more fools on this day than in all the other days of the year put together. This proves, by the number left in stock, that one Fourth of July per year is now inadequate, the country has grown so.- Pudd’nhead Wilson’s CalendarEight grown Americans out of ten dread the coming of the Fourth, with its pandemonium and its perils, and they rejoice when it is gone–if still alive.- Following the EquatorThe business aspects of the Fourth of July is not perfect as it stands. See what it costs us every year with loss of life, the crippling of thousands with its fireworks, and the burning down of property. It is not only sacred to patriotism and universal freedom, but to the surgeon, the undertaker, the insurance offices – and they are working it for all it is worth.- Speech, July 4, 1899, “The Day We Celebrate”.and… fromKEOKUK WEEKLY CONSTITUTIONWednesday, July 7, 1886THE FOURTH.How the Day was Celebrated in Keokuk Saturday.A Large Display of Bunting All Over the City.An Industrial Parade on Main Street in the Forenoon.The Exercises at Rand Park in the Afternoon.Good Music, Able Addresses and Orations.A Pyrotechnic Display at Rand Park Closes the Day..”Ladies and gentlemen: I little thought that when the boys woke me with their noise this morning that I should be called upon to add to their noise. But I promise not to keep you long. You have heard all there is to hear on the subject, the evidence is all in and all I have to do is to sum up the evidence and deliver the verdict. You have heard the declaration of independence with its majestic ending, which is worthy to live forever, which has been hurled at the bones of a fossilized monarch, old King George the III, who has been dead these many years, and which will continue to be hurled at him annually as long as this republic lives. You have heard the history of the nation from the first to the last–from the beginning of the revolutionary was, past the days of its great general, Grant, told in eloquent language by the orator of the day. All I have to do is to add the verdict, which is all that can be added, and that is, ‘It is a successful day.’ I thank the officers of the day that I am enabled to once more stand face to face with the citizens that I met thirty years ago, when I was a citizen of Iowa, and also those of a later generation. In the address to-day, I have not heard much mention made of the progress of these last few years–of the telegraph, telephone, phonograph, and other great inventions. A poet has said, ‘Better fifty years of England than all the cycles of Cathay,’ but I say ‘Better this decade than the 900 years of Methuselah.’ There is more done in one year now than Methuselah ever saw in all his life. He was probably asleep all those 900 years. When I was here thirty years ago there were 3,000 people here and they drank 3,000 barrels of whisky a day, and they drank it in public then. I know that the man who makes the last speech on an occasion like this has the best of the other speakers, as he has the last word to say, which falls like a balm on the audience–though this audience has not been bored to-day–and though I can’t say that last word, I will do the next best thing I can, and that is to sit down.”.for my part i would like everyone to know as a true fact that on this day on the south east corner of 9th ave. and 42nd st. innew york city for $1.07 there is a storefront grill where can be had2 eggs, any style, 2 slices of toast, hash browns, a plastic fork,napkins and condiments. shockingly sweet pricing and don’t thinkthe homeless, regulars, and other locals don’t love it. how theydo it i guess i’ll never know. volume? as tom waits said…”turn up the volume”…and this …..July 4th and religion according to Mark TwainJune 27, 3:18 PM.Samuel Clemens despised the celebration of patriotism and religion of his day. His “As Regards Patriotism” written around 1900 was not published until 1928. If it had been published earlier, he could have been branded a traitor. Among the many things he said are: “Patriotism is merely a religion — love of country, worship of country, devotion to the country’s flag and honor and welfare.”In absolute monarchies it is furnished from the Throne, cut and dried, to the subject; in England and America it is furnished, cut and dried, to the citizen by the politician and the newspaper.”"The business aspects of the Fourth of July is not perfect as it stands. See what it costs us every year with loss of life, the crippling of thousands with its fireworks, and the burning down of property. It is not only sacred to patriotism and universal freedom, but to the surgeon, the undertaker, the insurance offices – and they are working it for all it is worth.”- Speech, July 4, 1899, “The Day We Celebrate”Twain was equally no less inhospitable to religion than to patriotism. He saw both as adopted mindlessly:”In religion and politics people’s beliefs and convictions are in almost every case gotten at second-hand, and without examination, from authorities who have not themselves examined the questions at issue but have taken them at second-hand from other non-examiners, whose opinions about them were not worth a brass farthing.” – Autobiography of Mark TwainSo much blood has been shed by the Church because of an omission from the Gospel: “Ye shall be indifferent as to what your neighbor’s religion is.” Not merely tolerant of it, but indifferent to it. Divinity is claimed for many religions; but no religion is great enough or divine enough to add that new law to its code.- Mark Twain, a Biography”Man is a Religious Animal. He is the only Religious Animal. He is the only animal that has the True Religion–several of them. He is the only animal that loves his neighbor as himself and cuts his throat if his theology isn’t straight. He has made a graveyard of the globe in trying his honest best to smooth his brother’s path to happiness and heaven….The higher animals have no religion. And we are told that they are going to be left out in the Hereafter. I wonder why? It seems questionable taste.” – “The Lowest Animal”"I am quite sure now that often, very often, in matters concerning religion and politics a man’s reasoning powers are not above the monkey’s.” – Mark Twain in EruptionIn this posting you are spared the many quotations about the Bible According to Mark Twain, but two more quotations selected from many others about religion, reveal Samuel Clemens was a resigned to keeping religion in its place—one that comforted the average person and conformed to not taking it too seriously:”Religion consists in a set of things which the average man thinks he believes, and wishes he was certain.”- Notebook, 1879″You never see any of us Presbyterians getting in a sweat about religion and trying to massacre the neighbors.”-”The New Wildcat Religion”Author: William Gorden.As Regards ‘Patriotism’by Mark TwainIn the beginning of a change, the patriot is a scarce man, and brave, and hated and scorned. When his cause succeeds, the timid join him, for then it costs nothing to be a patriot.Mark Twain’s Notebook, 1905IT IS AGREED, in this country, that if a man can arrange his religion so that it perfectly satisfies his conscience, it is not incumbent upon him to care whether the arrangement is satisfactory to anyone else or not.In Austria and some other countries this is not the case. There the state arranges a man’s religion for him, he has no voice in it himself.Patriotism is merely a religion — love of country, worship of country, devotion to the country’s flag and honor and welfare.In absolute monarchies it is furnished from the throne, cut and dried, to the subject; in England and America it is furnished, cut and dried, to the citizen by the politician and the newspaper.The newspaper-and-politician-manufactured patriot often gags in private over his dose; but he takes it, and keeps it on his stomach the best he can. Blessed are the meek.Sometimes, in the beginning of an insane shabby political upheaval, he is strongly moved to revolt, but he doesn’t do it — he knows better. He knows that his maker would find out — the maker of his patriotism, the windy and incoherent six-dollar subeditor of his village newspaper — and would bray out in print and call him a traitor. And how dreadful that would be. It makes him tuck his tail between his legs and shiver. We all know — the reader knows it quite well — that two or three years ago nine-tenths of the human tails in England and America performed just that act. Which is to say, nine-tenths of the patriots in England and America turned traitor to keep from being called traitor. Isn’t it true? You know it to be true. Isn’t it curious?Yet it was not a thing to be very seriously ashamed of. A man can seldom — very, very seldom — fight a winning fight against his training; the odds are too heavy. For many a year — perhaps always — the training of the two nations had been dead against independence in political thought, persistently inhospitable toward patriotism manufactured on a man’s own premises, patriotism reasoned out in the man’s own head and fire-assayed and tested and proved in his own conscience. The resulting patriotism was a shopworn product procured at second hand. The patriot did not know just how or when or where he got his opinions, neither did he care, so long as he was with what seemed the majority — which was the main thing, the safe thing, the comfortable thing. Does the reader believe he knows three men who have actual reasons for their pattern of patriotism — and can furnish them? Let him not examine, unless he wants to be disappointed. He will be likely to find that his men got their patriotism at the public trough, and had no hand in its preparation themselves.Training does wonderful things. It moved the people of this country to oppose the Mexican War; then moved them to fall in with what they supposed was the opinion of the majority — majority patriotism is the customary patriotism — and go down there and fight. Before the Civil War it made the North indifferent to slavery and friendly to the slave interest; in that interest it made Massachusetts hostile to the American flag, and she would not allow it to be hoisted on her State house — in her eyes it was the flag of a faction. Then by and by, training swung Massachusetts the other way, and she went raging South to fight under that very flag and against that aforetime protected interest of hers.There is nothing that training cannot do. Nothing is above its reach or below it. It can turn bad morals to good, good morals to bad; it can destroy principles, it can recreate them; it can debase angels to men and lift men to angelship. And it can do any one of these miracles in a year — even in six months.Then men can be trained to manufacture their own patriotism. They can be trained to labor it out in their own heads and hearts and in the privacy and independence of their own premises. It can train them to stop taking it by command, as the Austrian takes his religion. “……………………………..it is getting dark and the explosions (fireworks) will increase. but here,in celebration and beauty, for the children.
g,i hate that clock though it is reminiscent of theyule tide log at christmas.
@Guest 67. I like paying attention and I’m not here for fans. Don’t read them if you wish not gather different insight into the various issues concerning our country. I had not posted for over 2 days, even though NO JOBS is an interesting focus of mine and was glad DR Roubini finally addressed the impact of NO JOBS on the problems we are facing. Felt it better to verify some data… today was holiday and I had the time to post what I view and in my opinion some intersting articles and insight. Are you a doctor that can determine if some one needs any sort of help? Why dont you post some of your own observations isntead of critizing someone. Again don’t read them if thats your choice. Hope you make lots of $$ monday shorting whatever you choose, I suspect you don’t do that well…
Fortune 100, 500, 50, 200, 1000, 2000, 5000, are public companies generally ranked in order of sales/revenue. Here is a link to the fortune 1000 companies. there are Various funds that track the fortune lists like the Russell 2000, S&P 500. I stated fortune 60 because the firm i work for is contained in that list.@guest67- how do you know how to short a stock or fund when you don”t know what Fortune 60 meant? just wondering…http://money.cnn.com/magazines/fortune/fortune500/2009/full_list/
Thank you for the kind words, it stinks watching and hearing and reading and seeing the hurt that is occuring for all those losing thier jobs or out of work, espcially knowing it is entirely driven by greed and deception. When is enough, enough?
BTW if I was Chariman of the SEC I would BAN short selling… it’s one of the evil acts that occur daily that hurts companies and our economy…. The purpose of the stock market as developed many decades ago was to allow average joe citizin to particapte in Corporate America and own a piece of the pie. it is so far removed from its intention and exists only as way for the PTB to gouge americans. See what it has done to peoples pensions the past 5 years as an example…
i,i might just best leave your comment stand….but i will add..the price is always too high, that is why it is calledJustice. if it was cheap it would just be administration.i think we are running into cycles here that overlapbut are at different frequencies, as in harmonics.there is the long term and the short term and the immediate. all phases of justice of some sort.so it is a musical question, no?the problem with the modern age is the timing as we havelost the beat, oooooor are out of time. not doingjustice to the tones and manifest timbres.there are those who insist on racing ahead and makinga mess of the music in these modern times. they need totake their gear pack up and leave before we lose it all.imho.
m,thanks to you from me too.great information.and what was up with the ken lay arnold deal that made himgovernor for dropping the suit against enron? not to dig upold sores.
Me want my Oxycontin.
Speaking of warm and tinglies:”My question, where is PeterJB, other than somewhere in Australia?”@ Guest on 2009-07-04 01:45:12I am traveling and inspecting my World before the ashes consume all, readying for the phoenix rising.Maybe just as well – read this:”“The full brunt of the deepest and most synchronized post- war global recession has yet to fully bear down on Australia,” said Su-Lin Ong, Sydney-based senior economist at RBC Capital Markets. “Export income, the terms of trade and business investment are all set to move substantially lower in 2009.”http://www.bloomberg.com/apps/news?pid=email_en&sid=aJkiwWwwe3cYI’m afraid that Australia’s choice of leadership is, like elsewhere, badly placed and those that haunt the corridors of risk free enterprise, i.e. bureaucrats, have led Australia and the World off the edge of the abyss. It’s free fall time as well as time for great opportunity.Watch the trends and believe nothing of that which you are told by government, corporates, politicians, bureaucrats, priests and that ilk; well, don’t believe anything that does not come from you.To Professor Roubini:You are far too sensitive to the political correctness demanded by newspeak institutional nonsense; it is time to stop the pretense and get real as Rome is burning!I might add that this little third world country I am currently in has Internet that works and reasonably priced, unlike Australia so no I have to travel to another country from Australia just to read my email(?) – what a joke.Ho hum
g,you have given me mirth with a reverberating ( 4th,july)case of guest envy. i will consider also becomingthat ethereal guest. i think it is is in my mitochondria.
I know of the Fortune 500. My respone to Morbid was about your refernce to Fortune 60, which I don’t believe exists.
Would you have us go to the casino and only be able to bet on the black? What is evil about betting against CNBC, Bloomberg and their shills who have tricked countless people into betting their life savings in the stock market? Why is it more evil to short than to margin oneself to the hilt and bet on the black, a stock market that appeared to be going from strength to strength, purely based on the foolishness of the punters?Peoples pensions have been impacted by the same force that inflated the bubble in housing: their personal greed. To much is written on this blog about the blame game. How about a little more about people taking responsibility for themselves?
MM CA, in regards to that Matt Taibbi interview you told me to watch, I particularly liked the way Business News Network (BNN) introduced Taibbi’s article as “basically taking the Goldman Sachs conspiracy theory as we’ve heard it into the mainstream.” Taibbi’s responses throughout the interview were colorful, on offense, such as in the following exchange:BNN: Matt, I’m just going to take it from a devil’s advocate position here for a second. Couldn’t you say Goldman Sachs is not a charity? They’re a moneymaking organization; they’re there to make a profit. They haven’t murdered anyone. You know, it’s tooth and pull, it’s capitalism. It’s not always pretty. It’s up to government to reign them in; it’s government that’s to blame here.TAIBBI: Sure. But you know Nigerian Internet scam artists are just out to make money…BNN (interrupting): But that’s illegal.TAIBBI: Well, look. The fact that this stuff was not punished by the government doesn’t make it ethical or not criminal. What Goldman did, for instance, with the housing market…they took mortgages clearly about to explode, that were doomed to default, and they sold them off in the secondary market to pensioners, to teachers unions, to insurances companies. A lot of these people had no idea what they were buying. It’s the equivalent of a meat company taking a whole bunch of rats and grinding them into chuck and selling them off as Grade A hamburger to Burger King and McDonald’s. It’s fraud.Just as colorful as Taibbi’s quotes are the illustrations in the Rolling Stone article by VICTOR JUHASZ (I rushed out today and bought one). Rolling Stone gave the article the explosive treatment with a double truck opening, complete with a full page illustration of a well-dressed porker lifting Uncle Sam out of sight on a giant money bubble just about to be punctured by the big cheat Goldman Sachs porker in top hat formal attire and boutonniere. The dapper porker continued to appear in page after page. In one, the kindly porker lights a cigar for a smiling IPO youngster in the midst of Goldman Sachs flammable dollar helium about to explode the kid’s new IPO, Kablooey.com.In another, G.S. Porker pumps up giant balloons shaped like houses as they catch fire (this artist is good): as well, a shocked motorist watches the numbers on the gas pump meter blow up as our dapper porker fills the motorist’s car with GS Gas.Well, you get the picture… But there’s no way to describe how good it is.As MM CA said above: watch Matt Taibi interview…http://watch.bnn.ca/the-close/july-2009/the-close-july-2-2009/#clip189690
I must support Guest67 above. It is anyone’s right to short a stock and judging by MM CA’s comments I would guess that she only has a very rudimentary understanding of capital markets if she believes shorting is “evil”. Further, various investment funds allow short sales that actually benefit millions of Americans, another clear oversight.Crowding out can discourage other posters by dominating the message. My advice MM CA is to limit your posts to well thought out messages or themes and post when relevant- rather than being a broadcaster of data. Posts are then more meaningful.Of late we here have lost the wide and rather varied contributions seen over the last couple of years and the hope should be to encourage other “voices” to contribute.
Guest67 had no idea what the term fortune 60, fortune 500 meant…why would anyone expect him to know what shorting is? and the attack on me was total BS… As far as Shorting I have full understanding of it and its impacts on captial markets…IMO its wrong. Why was it suspended when the financial markets were on the verge of collapse last fall? everyone has an opionion and quite frankly the total capilization of the US Stock markets of a little more than 9 trillion total is becoming irrevelant when the US sits at almsot 12 trillion in debt and another 40-50 trillion of unfunded liabilities…The stock market is doing nothing to help the 15 million totally unemployed and 30 million underemployed. all these bubbles were not created by 300 million americans, they were created by greed and all new financial vehicles created the past 15-20 years or so to squeeze more out of system that was not developed to withstand greed and theft as the main drivers… 99% of Americans could not explain what short selling is, so how would they know if it was benfiting them? Tell me how many americans these days trust thier banks, bankers, credit card compamies, financail advisors? even thier emmployers?
I am not sure how many arms and legs to put into this tar baby (shorting: good or bad for business?)It seems that if someone doesn’t think a business is worth as much as the stock market (ticker price) suggests, then he can simply sell it. This to me is the purest, simplest form of investing.The minute you allow shorting into the market, you are adding volatility as a sort of a derivative or wagering component to the stock market. You are not investing in a company or deciding to withdraw your investment from that company, rather you are wagering that the price will go down. I get lost in the definitions such as naked shorting but my understanding is that it allows the gambler to bet that the share price will go down, when he may not even own any of the stock to begin with.To me, the ability to short stock is the the gray zone between investing vs gambling. In view of the turmoil and complexity in the financial markets and what has resulted is justification to eliminate shorting. Yes, I know about the argument that it allows investors to keep companies honest and clean the dead wood out, but it spawns a whole new backlash in the form of covering of shorts which is hedging a bet.It seems that those who advocate shorts are those who are financially sophisticated, and whose job is simply to make money. Me, I have a real job that falls under the category of a productive member of society be it a builder, farmer, trucker, healer, cleaner, protector, waiter, and I don’t have the time to focus all my life energy into being a clever creature of the finance industry. I better stop now, because my blood is starting to boil just thinking about all these apex parasites the average citizen is having to support.I therefore agree with MM CA.
Michelle, it’s still an issue of consumers lacking money. It’s pushing on a string. I’d say that in this environment only those who can manipulate government into providing them with lots of subsidized money/breaks has any chance, and this only for as long as those subsidies can hold (until the taxpayers are totally crushed).Regardless of how much “cash” one has, it can’t spur consumption if the consumer is broke.Because these people are sitting on the sideline it should tell you that they see no value in putting their money out there.Again, why would anyone in their right mind look to spill precious capital in an environment that’s likely to be toxic for a LONG time? Local governments can give all the tax breaks that they care to give (though, with revenues drying up it’ll be a hard sell to local communities- care to really fan the fires of discontent? give big tax breaks to people with money while those strapped and unemployed are having to pay full price), but it’s not going to be enough until wages drop, and even then…While lower wages would start to be more attractive for producing more exports (not going to service domestic markets!), the export costs (think energy) tack on another big chunk that will require further wage reductions to overcome (to be competitive with producers in the markets that we’re wanting to penetrate).The old “we can do it” mentality should not cloud reality. It’s got nothing to do with being “positive:” businesses operate pragmatically; sure, they put on a happy, positive face, but That is not what makes things work (it’s only a sales pitch, kind of like George W. Bush telling the American citizens last fall that the economy was sound).I’d argue that it’s been the rampant “positive” thinking/attitudes that have led us down this ugly path. Lack of negative feedback loops has severe repercussions (“house prices will never go down” etc. etc.).Mark
The government is “us.” The corporations are their own entities, masquerading as members of “us.”I’m about as far from being a supporter of government that you’re like to find (at least on this board).Mark
The trend line still show a strong downward path. Only if there were signs of a reversal/slowing could we even begin to hypothesize of any turnaround. There is no such sign according to this chart.Mark
LOL! Thanks for the chuckle! Mark
let me explain, the company I work for is in the top 60.. i could’ve said fortune 30, fortune 120, fortune 350, most people famaliar with the term fortune 500 or fortune “something/anything” understand the meaning… its a financial term used especially when describing the revenue/sales of company.
If you weren’t so frothy about the “Dems” you’d see that your beloved “GOP” has been doing the same thing (setting the game up for the Dems).Party hacks are inherently blind…Mark
Speaking of bananas, look up the history of United Fruit in South America. Yes, a perfect example of how wonderful the US is.Mark
I dont gamble and never have, I invest based on research. I was not regluar poster until last year when this debacle started and i knew and could sense it would be bad, although I have been a subsciber to RGE since around 2001. His advice and understanding of capital and financial markets as well as world economies led me to stay primarily invested in foreign equites, specifically Asian and South American and like most who were in those markets I did quite well through Feb 2008. finally went out 100% in june of 2008 based a lot on DR Roubini’s analysis and before everything blew up. As for pensions, most pensioners have no clue how their pension money is invested. My companies pension fund is presnently underfunded to the tune of about 6 Billion now…and there probaby isn’t 500 employees out of over 100k that knwo that and there are plenty of other Fortune 500 company pensions in the same boat… So when that bubble bursts, is it the poor worker/s who worked 15, 20, 30 , 35 years thinking he or she has a guaranteed pension and everyone running his or her pension was doing the right thing and not gambling with thier hard earned pension? Gambling, betting, speculating is for Vegas and casinos and nothign else.
Well said Hubbs.. just like all the gold being sold today with balances being held on paper or some computer statement/account saying how much you have and where your gold is. I would be willing to say that if people started taking physical Delivery there might be some BIG problems worldwide for the gold traders. why is it if you want pyhscial gold today you have to pay more than the current price?
one more comment on this, Bernie Madoff… is it 60 billion, 120 billion? one thing i know is where there is smoke there is fire… there are plenty more where he came from and they all dont just reside in the big firms like GS, MS, Big banks… so in this unprecedented time of greed and corruption and the theft of average american wealth why would anyone trust the stock market. so unless it is cleaned up and confidence restored, it is one big Casino. I agree with guest67 on his cynicism about the alphabet soup networks like CNBC and all the other hawkers, advisors of the stock market, they are useless…….Saw the fireworks a little while ago and made me think that after about 50 years here now and having never seen this country in the bad shape it is now, what it will be like in the future especially for all our kids and future generations…
“Where the people fear the government you have tyranny; where the government fears the people you have freedom.” – Thomas Jefferson
MM CA, I agree that naked short selling is bad, but not short selling in general. Markets don’t always go up and for those who do need to get by using markets (given the sorry state of 401Ks, pensions, and the like) it is one of the only ways to try to win back what was lost through no fault of one’s own. We are in a protracted bear market that could last several years. You don’t even have to be an expert short seller to profit from short selling–just buy an inverse ETF on a popular index like the S&P. You can use that to hedge your portfolio, a totally conservative and responsible thing to do. Of course, short selling is not for everyone and people should do their own due diligence. But can it really be any worse than buy and hold at this point? The first rule of investing is not to lose money–I know lots of smart but naive people who can’t abandon buy and hold, even though they lost 80 or 90%! Short sellers are always at risk that the market will go up, so it’s not like they have a free ride. They also perform the useful function of helping to keep markets liquid. However, I do believe in the uptick rule.That said, most people should leave their money in cash or buy TIPs. Stay away from stocks–the learning curve is too steep! And that includes staying away from managed money, such as mutual funds, and sell-side advisors as well. “Experts” in this area don’t exist, are for the birds, are cons,…
It’s the Red states in the middle of the country that have the highest proportion of government subsidy. The GOP has proven time and again that it is the expert party at robbing the taxpayer to subsidise the unproductive and unthinking segments of society, although I grant that Geither/Bernanke are giving them some stiff competition.Check out this map of Federal Taxes Paid vs Received:http://media.photobucket.com/image/red%20states%20government%20subsidy/pyared/image4.jpg
The Fed changed the way the auction results are reported last month to aggregate domestic indirect purchasers (who used to get bulked in with the Primary Dealers) with the foreign indirect purchasers (who used to be understood to be foreign central banks). With the new reporting format, it is impossible to see how much buying interest is foreign central banks and how much is Fed-supported domestic intervention through indirect purchasers sucking the Fed teat (PIMCO, Blackrock, etc.).My gut tells me that there wasn’t as much foreign central bank appetite for the recent auctions as the Fed wants you to believe.
MM CA could have very easily said fortune 50 (as it is a more common phrase) & still maintained a degree of anonymity if the company was within top 50 of that list. I think what she is trying to communicate is that her company is between 51-60 in that list. did i read that correctly MM CA?
Apropos whether foreign governments are buying U.S. treasuries or not.Earlier in this thread…
Foreign governments were the largest buyers of Treasury auctions in the last month, if the Fed`s info is believable. Seems to fly in the face of everything we read. They seem to talk one game and play another.Hide reply Reply to this comment By Guest on 2009-07-04 19:14:35The Fed changed the way the auction results are reported last month to aggregate domestic indirect purchasers (who used to get bulked in with the Primary Dealers) with the foreign indirect purchasers (who used to be understood to be foreign central banks). With the new reporting format, it is impossible to see how much buying interest is foreign central banks and how much is Fed-supported domestic intervention through indirect purchasers sucking the Fed teat (PIMCO, Blackrock, etc.).My gut tells me that there wasn’t as much foreign central bank appetite for the recent auctions as the Fed wants you to believe.Reply to this comment By Anonymous on 2009-07-05 02:48:57
Some time ago there was an article in one of the on-line news sources about how the Singapore government was going to buy U.S. dollars. But all of the ‘supporting statements’ quoted in the article came from people who worked at some of the various banks here in Singapore. The government was not saying that they were buying this or that.So I suspect that sometimes the purchases are not made by the foreign governments. Rather it can well be by the foreign branches of the U.S. banks. For example Citibank is very big here in Singapore, and other western banks (Barclays, Credit Suisse, etc) have a rather large presense as well. So if they wanted to play some political game to e.g. support their homeland currency while making it look like the purchase came from abroad, they could well do so.
@MM CAIt was you that made first reference to the non-existent “Fortune 60″ not me. I believe I referenced the time of your post in a previous post. I am fully aware of the Fortune 500.I am also fully aware of what shorting is. It was suspended for financial stocks earlier this year to preserve “the banksters” that you and others on this blog are critical of. The suspension of shorting of the stocks allowed them and their executives to live another day, much to many’s chagrin. All part of the conspiracy to fleece hard working Americans of their money.I agree, the bubbles weren’t created by 300 million Americans but they were created by millions of Americans, maybe tens of millions even. It was millions of Americans that poured billions of dollars into 401K stock funds. It was millions of Americans that drove property prices to nonsensical levels. And it is the millions of Americans who levered, borrowing against this new found “wealth”, who are amongst the leading sufferers now that this “wealth” has evaporated.
Thanks for the insight.
Much of the focus on this board has been consumer-driven growth, especially the past two decades with the most recent being over-consumption. With unemployment at a multi-decade high, naturally consumption will decline. But something I haven’t seen discussed is the management of American businesses.Consider that many U.S. corporations are at the mature stage of growth, following a typical S-curve. Historically, these businesses have a harder time achieving exponential growth rates due to saturation of their market, deteriorating economic conditions, poor management, etc. The first two are difficult to control, the last one can be.During boom times, many consumer goods-producing companies’ revenues accelerate due to this over-consumption, without necessarily having to be managed efficiently in order to generate revenue and profits. Once the boom is over, the well managed survive weeding out the poorly managed ones. During this period, M&A activity increases, new ventures are formed,and competition is lessened, profits increase, thereby generating further expansion opportunities. In other words, the business cycle starts anew.So the question is this: How many companies were destined to fail simply because of poor management? We are seeing this now and are finding out how many went swimming naked. The great remaining companies and venture capitalists will seek out and create opportunities to take advantage of this downturn. Foreign companies may very well find themselves at a disadvantage when this all plays itself out.MM, it was interesting that you mentioned Colony and Draper. This relative of mine did exactly this same thing back in the early 90′s, buying mortgage pools from the RTC, just one of six companies at that time. With this cash flow, he parlayed the revenues and profits into many other ventures, generating a virtual cash cow. Colony and Draper will probably do the same.
Hubbs, MM CA,EXCESSIVE GREED is the operative “word” in our time. A certain amount of Greed seems okay in a right balance. But like Hubbs points out when the market place turns investing into a Casino through naked short selling, derivatives, and all this other “edge” giving crap – then you know that when the public also buys into this crap they too have been corrupted by EXCESSIVE GREED! It is no longer investing but trying to figure out how to game the system.Time to take responsibility for one’s actions folks. We are hurting each other with this Ponzi scheme. Madoff is the only “honest” criminal out there – he confessed. Of course he had a rather high threshold to reach before he felt a sense of “conscience.”
Everyone with at least two brain cells to rub together seems to agree that the rich have too much money and therefore power to influence how everybody on the globe lives out the limited hours they have, and consequently the poor have too little of both money, and power over their own lives and opportunities and options, but how shall we know what amount is the right amount for anybody to have? How do we know where to draw the line and say ‘this much and no more is a rightful share of wealth and power’? Should it simply be a matter of all you can get is yours, or should an amount be calculated contingent upon, say, how much work an individual does?
IMO the sorry state of pensions, 401k’s, annuities are due to people’s ignorance by way of just how complicated the investing system is in this country. They relied or rely on “professional managers” to figure it out for them. Guess what, that now seems to have not worked so well the past 20 or so years. Consider what has happened:1. 401k’s in general have lost 30-50% of their past values.2. As companies and investment firms told people 401′ks were the place to put your money the past 20 years, they slowly started eliminating traditional pension funds to where now only about 20% of companies offer any pension fund and most of them are driven and exist by union negotiated contracts.3. Existing pension funds managed by the “the professionals” are now under funded by upwards of 1 Trillion dollars according to most estimates. Who will take that hit? IMO the average Joe American.4. While the country was on verge of financial collapse last fall because of all the exotic instruments and new ways of investing were blowing up in the faces of the “professional managers” what was done stop it? Basically nothing other than injecting Trillions of dollars to the institutions who allowed it all to happen.5. Consider that Citi and GM were being shorted for months until both companies stocks were driven to a $1.00 each and finally GM going bankrupt. But on the way down to a $1.00, pension funds, annuities and 401k’s took the hit as both companies were part of the DOW 30. All the “professional mangers” did nothing to protect average Joe American as this happened. They let average Joe American take the hit. I will not defend either company, they were mismanaged for years, they accumulated billions in debt (GM lost 200 Billion in the past 10 years or so, Citi’s balance sheet of toxic crap is probably close to 1 trillion- they both have taken almost 100 billion in bailout money the past 6 months- average Joe American’s tax dollars). Each had/has horrible balance sheets. Why didn’t the “professional managers” pull out long ago? Because average Joe American wasn’t telling to do so and if loses were going to come, average Joe American would just accept it and bear it6. So here we are now and GM is bankrupt, their stock worthless, every pension, 401k and annuity has a share in the loss and there is not one thing average Joe American can do it about it. The bond holders and debt holders are settling for 30 or cents on the dollar. Who is taking all those loses? Average Joe American IMO and why? Because the “professional managers” and the PTB say so. And GM has the gall to announce they will IPO in early 2010. Now who will buy those shares? Not average Joe, but the professional managers who manage average Joe Americans pension fund and 401k fund. So how long before the new GM stock starts getting shorted again?7. Citi bank raised about 30 Billion recently because Giethner and the FED told them to do so due to the stress test results. Now who invested that money, bought those shares? Average Joe American pension and 401k funds. Anyone Think average Joe American had a clue that the “professional mangers” working on their behalf with what money they have left in their accounts knew they were yet again buying shares of Citi. I can guarantee you there were not many average Joe Americans going out and buying shares of Citi the past 2 months because they think the stock will do well. Eventually sometime soon the shorters will finally kill off Citi and not because of toxic assets and bad balance sheets, but because they can make a fortune doing so. Average Joe American has no say and quite frankly is more worried these days about keeping his or her job or finding one.Those are just two examples. There are many other companies with horrific balance sheets and mountains of debt. There are still some good companies, albeit not many these days.We could go on and on about what has happened, bottom line is I take offense when people blame average Joe American as the reason this all happened. They share some of the blame for not being able to understand the concept of saving, being smart, over spending at times. The majority of blame though goes to the current system, the “professional mangers” the investment firms, the mortgage companies, the Big Banks, the parasite leadership at the corporate levels, the Gov’t. The people in charge so to speak let it happen, not the 300 million underlings. They made the mortgage loans wit zero down, zero interest, no income verification they mailed the 50 offers a week for $30,000.00 credit lines, and they did the zero down, zero interest car loans… They created one big Ponzi scheme that has blown up in their face and now are “trying” to stick it to Average Joe American. It remains to be seen whether they will get away it this time around. They never factored in the power of the internet, bloggers, people like of all us who read and contribute on sites like this. The internet got Obamas elected and it very well may allow Average Joe American to now have say and be more informed than ever. There are 30 million adult Americans on the internet using it to assist them in looking for jobs, but you can be rest assured they are learning things too about how this country, its economy and the PTB are running things and I am sure average Joe American is not too happy these days.So if anyone thinks there are any average Joe Americans rushing out to buy GM stock next year or Citi stock now guess again. The stock market is becoming irrelevant. The question is what they are planning next to fleece average Joe American.As I mentioned above the TOTAL Value of the stock market is about 9 Trillion currently, and had been as low as under 8 trillion in March 09. That is about 75% of our current national debt. It is about 15% of our total unfunded national debt when SS and Medicare are factored in. It used to be the other way around. As recently as late 2002 the Stock market value was about 2.5 times greater than our national debt (2002 6.2T) and about 45% of our unfunded liability/debt. If and when the stocks start down again the spread will get larger and the markets will become irrelevant. IMO the system is broke beyond repair, when just even one form of trading restriction is fought so hard not to change.One question for everyone? how can companies like GS, MS, and others be on pace for record profits this year when average Joe pensions and 401k’s are imploding if not downright going under in value.As my parents have said to me the past year, we have always stayed in cash and CD’s. We were happy with 3-7% interest and dividends over the past 30 years and we SAVED. And now we have enough money to live out our years, 2 houses paid for in cash, 1 brand new one, and most of our friends and their annuities and stock funds they invested in are broke or in serious financial hardship.Go Roddick! 1-1 6-6 in third
Nice post- im sure this happneing in other states too…only in america can Goldman Sachs be on pace for record profits and the PTB are sticking it to those who have lost thier jobs because of archaic rules…
When do commentors believe inflation (default) will begin to kick in?What impact will the Iraqi (112 – 115 billion barrels – 2nd only to Saudi) reserves have on situation??an interesting result of the current dollar (petrodollar) situationYear 2003: “Iraquis will never accept this sellout to the Oil Co’s”http://www.guardian.co.uk/commentisfree/2007/jan/16/comment.iraqYear 2009: looks like the Brits are getting bailed out!http://www.guardian.co.uk/business/2009/jun/30/bp-oil-contract-exploration-iraqand it is all about the dollar!http://www.independent.co.uk/news/world/middle-east/oil-rush-scramble-for-iraqs-wealth-1711570.htmlWhen the price of oil unexpectedly collapsed – though it has risen again in the past few months – the Iraqi government found itself broke. Its revenues are being swallowed up by the higher salaries, the rationing system and recurrent costs.ANY THOUGHTS ARE GREATLY APPRECIATED
Biden: We Blew It On The EconomyMy only post for today and it kind of tells the story of what I have been saying about Obamas inexperience and the minions like Giethenr, Bernanke, Summers, et al, who have been advising him. If I and others knew last fall that NO JOBS would be occurring at these current levels, that consumers were hunkering down how the f..k did they not know it. We sit at U3 12% unemployment in California presently. We are headed easily for 13-14% in California and the rest of the country is not far behind. So they relied on the “experts” and “consensus blue chip indexes” just like average Joe American has relied on them to manage their pension, annuities and 401k’s. High speed rail, for what, just to create jobs? build it and they will ride it? Ride it to what? the jobs they don’t have? build up the internet, good idea, it will allow all average Joe Americans to finally stay informed instead of relying on the mainstream press and lobbyists.No folks, Obama and anyone who cares got hoodwinked by GS, MS, the Big banks, the fortune 500′s the past 9 months. They got their hand on Trillions of average Joe American’s tax money, because their old bubble/Ponzi way of things blew up. Those banksters who met with Obama in the white house in Early February I am sure told him things will be fine. Bail us out, keep us afloat and we will help you fix things. If you don’t we will bury you. Well they are burying him anyhow, but they got their trillions.There are NO JOBS, and things are getting a lot worse and it’s not me saying it. It’s everyone who cares, feeling it and saying it now. Don’t be surprised if we see bank holidays and stock market suspensions in the future. Obama has got to see that propping up a Casino like stock market that operates under Ponzi type rules and guidelines, is no longer in the best interests of average Joe Americans.So I ask all the contributors here, where jobs will come from in the future? And if you want to find out how corporate America views what’s coming for each of their companies. Go read some of their 8 and 10k’s and their revenue/sales guidance and what they are doing to control costs. Look at any company in the fortune 100/500 and you willSee debt, debt and more debt and a general statement they will hold profit margins by controlling costs. Reading between the lines, there is more NO JOBS and more WAGE DESTRUCTION in store.I am sure there will be a lot of shorting of stocks going on monday…Biden: We Blew It On The EconomyJoe Biden told “This Week” that the Obama administration “misread how bad the economy was.”He also said the administration made this mistake because they just looked at the consensus forecasts at the time…and they proved to be wrong.If the latter is true, the administration deserves the crap it has been getting. In the months leading up to Obama’s inauguration, the economy fell off a cliff. The credit markets seized up. Several major investment banks went bust. The Fed and Treasury talked of an apocalypse. Everywhere you looked, you heard one analyst after another saying the country was plunging toward another Great Depression.If anything, the economy since the inauguration has been better than many analysts feared. So this “we didn’t get it” sounds like revisionist history to us.More likely, in our opinon, the administration concluded that it would never get its huge spending increases passed if its projections reflected the “most likely” scenario for the economy. And so it produced the economic forecasts (growth, stress tests, jobs, etc) that have begun to destroy Obama’s credibility on this critical issue.Regardless of the thinking behind the over-optimism, Obama has made a serious error here. Recovering from financial disasters like this usually takes years–and it likely will this time, too, regardless of what Obama does.Above all else on the economy, Obama had to under-promise and over-deliver. By promising a relatively swift recovery, he has set himself up for failure. If the economy does recover, he’ll be fine, but if it doesn’t (which seems more likely), he will increasingly be blamed for failing to fix it. And given the singular importance of this issue to most Americans right now, it is hard to see how his presidency will survive that.WASHINGTON (AP) — Vice President Joe Biden said the Obama administration “misread how bad the economy was” but stands by its stimulus package and believes the plan will create more jobs as the pace of its spending picks up.Biden, in an interview airing Sunday on TV network ABC’s “This Week,” said the nation’s 9.5 percent unemployment rate is “much too high.”"The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there,” Biden said.”We misread how bad the economy was, but we are now only about 120 days into the recovery package,” Biden added. More jobs will be created in coming months, he said.Biden noted that the $787 billion economic stimulus package was set up to spend the money over 18 months. Major programs will take effect in September, including $7.5 billion for broadband Internet service, plus new money for high-speed rail and the nation’s electrical grid, he said.Biden said it was premature to say whether the country would need a second stimulus package.http://www.businessinsider.com/henry-blodget-obama-administration-blew-it-on-economy-biden-says-2009-7
Safe travels, PJB. Glad you can check in once in a while, and we do expect a full report when you get back home, wherever that may be.
my guess is that the default will begin after all contracts are secured, etc and whatever else the scheme details”the price of oil”then the buggery will begin w/ cap & trade of the remaing viable populaces
When one has repeating wet dreams of creating Bamelot like Obi does, one soon finds out that dreams and reality are two different things. Thus Obi continues his sad journey towards the realization of his dire omen, that was foretold by his choice of MUSE, Abe Lincoln.The truly horrible times lie ahead. Expect humanities misery index to increase substantially – mileage will vary as PJB notes – fat cats may not feel the speed bumps. Unless they find their “conscience” by observing the cries of others.
PSI always ask myself a single question as I continue to watch this horrible situation unfold.Is Our Species Evolving or Devolving?Therein lies the outcome. Given the lack of unity on the subject of how to live a sustainable life style, I can only continue to conclude that we are headed towards a massive DEPOPULATION event.
PeterJB! You’re in touch! Gone walkabout! Joy in the morning! it’s good to hear that “ho hum” again punctuating those searing remarks that cut through the pith and root of failed leadership, that stir the restless malaise into political action. “God forbid we should ever be twenty years without such a rebellion (Jefferson).”Fourth of July felicitations from America the currently uninhabitable, “the land of the flea and the home of the knave.” It was only two hundred years ago that Thomas Jefferson recognized in his 1st Inaugural the revolutionary character upon which America was founded . Would that those same fires be stirred again:”The essential principles of our Government… form the bright constellation which has gone before us and guided our steps through an age of revolution and reformation. The wisdom of our sages and blood of our heroes have been devoted to their attainment. They should be the creed of our political faith, the text of civic instruction, the touchstone by which to try the services of those we trust; and should we wander from them in moments of error or of alarm, let us hasten to retrace our steps and to regain the road which alone leads to peace, liberty and safety.” –1st Inaugural Address, 1801.
@ MM CA: “GM has the gall to announce they will IPO in early 2010…” (2009-07-05 10:19:56)It’s another takeover by the likes of Goldman Sachs, via the likes of their handpicked car czar Steven Rattner and their president, Barack Obama. It’s the continued concentration of all America’s corporations into the hands of a few internationals that began full blown in 1976 via mergers and stock-manipulated hostile takeovers.I knew the meaning and the outcome the minute Rattner was appointed “czar.” In reality, it’s not a “GM” announcement.
http://www.nytimes.com/slideshow/2009/07/05/magazine/20090705-gilded-slideshow_index.htmlRuins of the Second Gilded Age
30,000,000 “studying” on the internet and the other 270,000,000 watching the Simpsons. Now that’s an informed society!
In spite of whatever legitimate criticism may be leveled at the Obama Administration with respect to its economic perception and prognostication, or to any lack of efficacy in its response, I shudder to think what the reaction to the current crisis would have been had John McCain been elected. His illustrious advisors on the economy included, among other infamous notables: Phil Gramm, who led the charge for much of the deregulation of the financial system that put us in this mess, and in the early months of the downturn, described the United States as a “nation of whiners” and said that we were in a “mental recession;” Kevin Hassett, who wrote the fantasy book “Dow 36000: The New Strategy for Profiting from the Coming Rise in the Stock Market in 1999,” predicting that the Dow would hit 36,000 within five years; Carly Fiorina, the former CEO of HP who left the company with a severance package of more than $20 million after she resigned in a dispute with the Board over her management; and Arthur Laffer, the originator of the Laffer curve, representing the now generally discredited economic view that government revenue increases when tax rates are lowered.As Dr. Roubini reminds us on a regular basis, the condition of the economy would have been much worse without the monetary and fiscal response, even while he acknowledges the shortcomings of that response. There is certainly a lot more the Obama team could have done to alleviate the crisis — e.g., in my view, infrastructure spending should have been a much larger component of the monies committed to the fiscal stimulus package, the government should have been more aggressive in taking an equity stake in some banks and in its triage efforts, and efforts to restore some balance to consumer finance and bankruptcy law, such as capping usury rates federally and giving bankruptcy judges cramdown authority over first mortgages) should have been more far-reaching commenced earlier — but all in all, what they’ve done likely beats what we would have seen otherwise.SWK
The question remains. Are we evolving or devolving?I quite agree about the pitfalls of a John McCain presidency. No real winners either way. My fear is that this bail-out/bail-in business has only postponed the pain that had to happen – and further that it has now multiplied the pain manyfold. It seems to me the hole has now been dug sooooo deep that there is only pain, pain, pain… as far as the eye can see.Like I mentioned earlier on this thread – get ready for your JOB experience. Size and troubles of your dungheap will vary according to your circumstances – whether they are financial, psychological or both.
Don’t forget this additional corporate metric…insiders are selling like crazy. They see the true trend.The Bush administration got us here by being insanely driven by their ideology – facts be damned. Now, we have traded one set of ideologies for another, which look to be every bit as disastrious for America.Always an independent, I found myself voting more often with the dummycrats for self protection. The right-wing nuts scared me too much, and I considered the Dems to be the lesser of 2 evils. Both are corrupt, but the GOP was much more sophisticated and eficient at stealing. Not any more. The dems have caught up (probably because lobbyists have educated them), plus, they don’t seem have a clue about how things actually work in the real world.Independent Contractor
This week’s cover of “The Economist” has a photoshoped image of a smiling Barack Obama in a surgical gown and holding a hypodermic needle. The headline: “This Is Going to Hurt.”You bet! And with democratic majorities in both houses of Congress larger now than they’ll be at least for another decade, the needle has to be inserted quickly before the patient finds out what’s going on and heads for the exit.The Obama Aministration’s goal, in spite of lies to the contrary, is single payer (taxpayer) national health care. Not right away, of course; even the most socialism-trending congress in history couldn’t get away with that now. The trick is to get a foot in the door before Congress begins its 2011 campaigns. The details can be added in coming years under a thousand mystery measures Congressional staffers will construct.This much is known now: “Reform” means substantially increasing taxes on the middle class to pay for additional insurance and medical care for people who don’t pay—and who, in general, need a disproportionate amount of care.“Stakeholders” in health care “reform” means the lobbyists for doctors, insurance companies and pharmaceuticals plus the representatives of an army of groups pushing for the benefits of health care. “Stakeholder,” of course is a big government word meaning people who are invited to sit at the table when your money is being divided up.“Access” is a code word meaning gradual leveling of health care quality until this level of supply is available to all. In other words, taxpayers pay the bill, care providers still get paid at the level they ask, and the supply of care is rationed.Obama’s health care czar Nancy-Ann DeParle opened a recent conference on what they called a “Health Disparities Stakeholder Discussion” by drawing the line in the sand. Health care disparities, she said, is both a health issue and a civil rights issue. Who you are, where you are from, and how much money you have should not determine your ability to access quality health care.The White House web site reports on the “Disparities” discussion attended by 26 representative of racial, ethnic, and other minority groups.Items of interest coming from the “Disparities” discussion:__________________________________________________________Nancy Zirkin from the Leadership Conference on Civil Rights said we must learn the causes of health problems in minority communities to learn to what extent genetics or the environment are factors.Rea Panares, Director of Minority Health Initiatives at Families USA, said this conversation is a new opportunity to close the gap in health care access and quality for minorities.Barbara Kornblau with the Special Olympics asked that Americans with disabilities be part of the conversation around health disparities, as disabilities can confront members of any ethnic or racial group.Stacey Bohlen, Executive Director of the National Indian Health Board, said: “The disease we suffer from is anonymity.” She said.the health care system, despite help from the Indian Health Service and private programs in tribal areas, is starving. She is urging the Administration to focus on obtaining more data about the health of Native Americans, and she also highlights that most of the diseases plaguing tribal communities such as diabetes, alcoholism, heart disease, and HIV/AIDS are preventable.Obesity is one of the major topics today. According to the new Health and Human Resourses (HHS) report, seven out of ten African-Americans aged 18-64 are obese or overweight. This statistic points to another problem, which is that many ethnic and racial minorities. do not have a primary care physician who could educate them of the importance of prevention and the dangers of obesity. More than a quarter of African-Americans and half of Hispanics do not have a regular doctor, according to the report.HHS reports 48 percent of African-American adults have chronic diseases, and the rate of HIV/AIDS infection among African-Americans is seven times that of White men and women.More than one in three Hispanics and American Indians – and just under one in five African Americans – are uninsured. In comparison, only about one in eight whites lacks health insurance.Four in 10 low-income Americans do not have health insurance, and half of the nearly 46 million uninsured people in the United States are poor. About one-third of the uninsured have a chronic disease, and they are six times less likely to receive care for a health problem than the insured. In contrast, 94% of upper-income Americans have health insurance.A primary care provider and a facility where a person receives regular care substantially improve health outcomes. However, Hispanics are only half as likely to have a usual source of care as whites. What’s more, half of Hispanics and more than a quarter of African Americans do not have a regular doctor, compared with only one fifth of whites.Low-income Americans are three times less likely to have a usual source of care compared to those with higher incomes – and almost half of low-income Hispanics lack a usual source of care.Office of Public Engagement Director Tina Tchen had opened the discussion by encouraging the stakeholders to stay involved in the health reform effort after this meeting concludes. We are at a critical juncture, she says, and your continued involvement will help push us over the top.http://www.whitehouse.gov/blog/Streaming-at-Noon-Health-Care-Stakeholder-Discussion-on-Health-Disparities-and-Health-Reform/
So we are to just accpet they keep making mistakes. McCain did’nt win and is old history. Obama is at the helm and he needs to grow some balls and fix things. His pitchman status for the gov’t is wearing thin. Your ideas are sound and a start, but I see nothing like that happening.
Jeez Louise, folks, this is utterly ridiculous.The middle class is ALREADY paying for uninsured folks.All this nonsense about the single-payer system, or any meaningful healthcare reform, costing upward of $1 trillion is just so much claptrap. The alternative is what? We’re STILL going to pay upwards of $1 trillion.The “free market” (hahahaha) system for healthcare has been in place for 30 years. My entire working life up to this point. And where has it gotten us? Almost 20% of our population is uninsured. Just exactly WHAT part of the “free market” system is WORKING? It’s guaran–flippin’-teed to get WORSE if we stick with the current “free market” system. It has gone the way of all the other for-profit “free market” systems for all of the needs of the people. (Witness the for-profit utility companies constantly raising rates for electricity and natural gas. Gotta answer to the shareholders, doncha know. Customers are mindless cattle anyhow.)Why is there such fear about providing access to preventative healthcare to our population?And finally I see no discernible difference between fighting a government agency over my healthcare and a clerk-typist at an insurance company behemoth.Would that we could simply do away with health insurance companies altogether. Back to the old days of patient-doctor interaction without any interference from any gosh-darned corporation, or the government for that matter. Of course that will never happen. But I can dream, can’t I?
The real fight going on is who takes the hit for the 40-50 Trillion underfunded Medicare probelm coming our way in a few short years. Whatever they do now lays the groundwork for that. And in the end it will be the taxpayers and not the corporate insurers and providors or Wall street. So Bend over America, the biggest pole is yet to come your way.
Getting to know your government czars:Here is the bio of America’s health czar who, according to an article above from poster “Deride DeParle,” since leaving her government job running Medicare for the Clinton administration…built a lucrative private-sector career. Records show she earned more than $6.6 million since early 2001.”After leaving government, DeParle accepted director positions at half a dozen companies suspected of violating the very laws and regulations she had enforced for Medicare. Those companies got into further trouble on her watch as a director…”Nancy-Ann DeParle AKA Nancy-Ann Min DeParleBorn: 17-Dec-1956Gender: FemaleReligion: PresbyterianRace or Ethnicity: AsianSexual orientation: StraightOccupation: BusinessParty Affiliation: DemocraticNationality: United StatesExecutive summary: Health care administratorMother: June Cooley MinHusband: (div.)Husband: Jason DeParle (journalist, m. 22-Mar-1997)University: BA, University of TennesseeLaw School: JD, Harvard Law SchoolUniversity: BA & MA Politics and Economics, Balliol College, Oxford University Professor: Health Care Systems, Wharton School of Business, University of Pennsylvania (2001-)CCMP Capital Advisors, LLC Managing DirectorJP Morgan Chase Senior Advisor,JPMorgan Partners (2000-06)US Health & Human Services Department Administrator, Health Care Financing Administration (1997-2000)US Office of Management and Budget Associate Director for Health and Personnel (1993-97)Tennessee State Official Commissioner, Department of Human Services (1987-89) Covington & BurlingBass, Berry & SimsMember of the Board of Accredo Health (2002-)Member of the Board of Boston Scientific (2006-)Member of the Board of CareMore Medical EnterprisesMember of the Board of Cerner (2001-)Member of the Board of DaVita (2001-)Member of the Board of Guidant (2001-)Member of the Board of Legacy Hospital Partners, Inc.Member of the Board of MedQuest Associates, Inc. (2002-)Member of the Board of Specialty Laboratories, Inc. (2001-04)Member of the Board of Triad HospitalsGore 2000Health Affairs Editorial BoardHillary Clinton for PresidentJohn Kerry for PresidentMedicare Payment Advisory CommissionNational Quality Forum Strategic Advisory CouncilRobert Wood Johnson Foundation Trustee (2002-)Rhodes ScholarshipPhi Beta Kappa Societyhttp://www.nndb.com/people/945/000169438/
Earnings Drop Worldwide as Job Losses Hurt ConsumersJuly 6 (Bloomberg) — Earnings at such companies as Ford Motor Co. and ArcelorMittal may continue to decline in the next three months as the highest unemployment in a quarter-century keeps consumers from spending.The year-over-year profit slide for Standard & Poor’s 500 Index members may narrow to 21 percent from July through September, after declines of an estimated 34 percent in the second quarter and about 60 percent in the year’s first three months, according to data compiled by S&P and Bloomberg. Earnings may rise by year-end based on comparisons to late 2008, which was roiled by the meltdown in financial markets.Consumers in the U.S., the world’s largest economy, remain concerned about jobs after unemployment reached a 26-year high in June, analysts and investors said. Until Americans start spending again on cars, cell phones and clothes, most U.S., Asian and European companies may keep squeezing out costs.“So long as unemployment keeps rising, the consumer will continue to be very conservative,” said Walter “Bucky” Hellwig, who helps manage $30 billion at Morgan Asset Management in Birmingham, Alabama. “Any improvement will come from cost cutting, and that’s not sustainable. If you have no anticipation of top-line growth — it will be a little tougher to generate that enthusiasm into the fourth quarter.”Consumer ConfidenceU.S. consumer confidence slipped unexpectedly in June, reflecting unemployment that rose to 9.5 percent and wealth destruction triggered partly by a drop in property values. U.S. employers slashed 467,000 jobs last month, and about 6 million jobs have been eliminated since the recession began in December 2007. June’s jobless rate was the highest since August 1983.Almost 67 percent of S&P 500 members topped analysts’ estimates for first-quarter earnings after eliminating jobs and closing plants, Bloomberg data shows. That helped the S&P 500 index rally 15 percent in the second quarter, the most since 1998.The benchmark MSCI Asia Pacific Index surged 28 percent in the quarter, the largest gain since the gauge started in 1988, while Europe’s Dow Jones Stoxx 600 Index rose 17 percent, the biggest advance since 1999.The second-quarter earnings barrage begins in the U.S. on July 8 with aluminum producer Alcoa Inc., the first member of the Dow Jones Industrial Average to report results.Alcoa is based in New York.‘What’s Your Potential?’“The analysts will probably lowball things once again and the companies will be able to jump over it again,” said Charles Smith, chief investment officer for Fort Pitt Capital Group Inc. The Cleveland-based firm has $800 million assets under management. “If the teacher expected you to get a “C-” and you get a ‘C,’ then the question is: what’s your potential as a student?”Railcar shipments and other U.S. shipping data provide scant hope that manufacturers are gearing up for increased demand, said Mark Demos, a Minneapolis-based portfolio manager who helps manage $21 billion at Fifth Third Asset Management. Railcar shipments are down 19 percent so far this year and 18 percent in the week ended June 20.Demand is best described by the title of the 1966 novel, “Been Down So Long It Looks Like Up to Me,” said Andrew Bartels, an analyst at Cambridge, Massachusetts-based Forrester Research Inc. Technology purchases in the U.S. will decline 5.1 percent this year, with a recovery in the fourth quarter, he said in a report last month.Slow Profit GrowthMountain View, California-based Google Inc., the biggest Internet advertising company, may post its second-slowest rate of profit growth since selling shares to the public. Chief Executive Officer Eric Schmidt said June 30 the economy is bottoming and will be better in a month.Microsoft Corp., based in Redmond, Washington, may report its second straight sales drop, according to a Bloomberg survey of 22 analysts. Prior to the quarter ended in March, sales at the world’s largest software maker had never declined.Mobile-phone users are trading down toward lower-priced phone plans that don’t require buying a new handset, said Andreas Mark, a Frankfurt-based fund manager at Union Investment GmbH with about 30 billion euros ($42 billion) of equity assets under management.Espoo, Finland-based Nokia Oyj, the world’s biggest handset maker, may report a 67 percent slide in net income, analysts estimate, as customers concerned about losing their jobs postponed phone upgrades.“Companies are laying off people and not hiring them back,” said Roger Kubarych, chief U.S. economist at Unicredit Global Research in New York, who forecast payrolls would decline by 450,000. “This leaves us with a weak, irregular recovery.”Rising unemployment in Europe is trimming as much as 10 percent of industry sales, said Amsterdam-based Simon van Veen, who helps manage a global portfolio of 2.2 billion euros at the Fortis Global High Income Equity Fund.‘Sluggish’ Consumer Spending“The outlook for electronics companies isn’t clearing,” said Tetsuro Ii, president of Commons Asset Management Inc. in Tokyo. “Consumer spending continues to be sluggish in the U.S. and elsewhere, pressuring prices.”Global sales still will bolster results at U.S. multinational companies, said Michael Williams, managing director of New York-based Genesis Asset Management, which has assets of about $2 billion. “The struggling U.S. consumer will be more than offset by the massive number of people in China, Brazil, Russia and India that are moving up the consumption ladder,” he said.Chinese Economic GrowthChina’s Purchasing Managers’ Index climbed for a fourth month in June, the latest sign the country’s 4-trillion yuan ($585 billion) stimulus is reviving its economy. China’s economy is forecast to grow 7.8 percent this year, according to a Bloomberg survey. That compares with a decline of 2.7 percent in the U.S. and 4.3 percent in Europe’s 16-nation euro zone.PetroChina Co., the world’s largest company by market value, and China Petroleum & Chemical Corp., or Sinopec, may post increased second-quarter profit after oil prices rebounded from December lows and China’s economy grew, said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong.Second-quarter earnings at Exxon Mobil, Chevron Corp. and ConocoPhillips, the largest U.S. oil companies, probably fell after the recession sapped fuel demand, causing crude-oil prices to drop by half from the record set last July.At Irving, Texas-based Exxon Mobil, net income may drop 64 percent from a year earlier to $4.21 billion, according to analyst estimates compiled by Bloomberg. The profit would be the company’s smallest for any quarter since 2003.‘Excess Production’“There’s a lot of excess production and not that much demand,” said Barry R. James, who holds Exxon Mobil, Chevron and ConocoPhillips shares among the almost $2 billion in investments he manages at the James Advantage Funds in Dayton, Ohio. “We don’t see much of a recovery.”Toyota Motor Corp., Honda Motor Co., Nissan Motor Co., Japan’s three largest automakers, will likely post losses in the three months ended June 30 because of the lower demand in the U.S., traditionally their most profitable market, according to three analysts surveyed by Bloomberg. Honda and Nissan are based in Tokyo, and Toyota in Aichi prefecture in central Japan.“The numbers will look really ugly,” said Mamoru Kato, an analyst at Tokai Tokyo Research Center in Nagoya, who expects Toyota to post a loss comparable to the 766 billion yen ($8 billion) loss in the quarter ended in March.Ford Motor Co., the only major U.S. automaker that hasn’t filed bankruptcy, is gaining market share from its distressed domestic rivals, said Brian Johnson, a Chicago-based auto analyst for Barclays Capital.No One ‘Sneering Anymore’Ford, based in Dearborn, Michigan, is boosting third- quarter output 16 percent to meet rising demand. Detroit-based General Motors Corp., which filed for Chapter 11 bankruptcy protection June 1, is selling controlling interest in its European operations. Chrysler LLC, which filed Chapter 11 on April 30, has emerged from bankruptcy as Chrysler Group LLC, 20 percent owned by Italy’s Fiat SpA.“People used to sneer at me for owning Ford, but no one is sneering anymore,” said Bernie McGinn, president of McGinn Investment Management of Alexandria, Virginia, which owns about 300,000 Ford shares. “The market is rewarding them for not going to the government to get money.”Ford, which had a 33 percent decline in U.S. auto sales through June, may lose $718.3 million in the second quarter, an improvement from an $8.7 billion loss a year earlier, according to the mean estimate of four analysts surveyed by Bloomberg.U.S. Air CarriersThe nine biggest U.S. air carriers, including Delta Air Lines Inc., American Airlines parent AMR Corp. and United Airlines parent UAL Corp., may have a combined quarterly loss of $1 billion, estimated Michael Derchin, an analyst at FTN Equity Capital in New York. Derchin said he previously expected a $600 million loss. AMR is headquartered in Forth Worth, Texas, and UAL in Chicago.Delta, based in Atlanta, and American Airlines both plan to trim additional flights when the peak travel season ends after the Labor Day holiday. U.S. carriers have eliminated 31,700 jobs and parked more than 500 jets since the start of 2008 as air travel plummeted amid job losses and tighter credit.Large banks in general will report lower earnings than in the first quarter, though analysts said companies such as Charlotte, North Carolina-based Bank of America Corp. and New York-based Goldman Sachs Group Inc. will still post profits. Credit losses will offset some gains in trading and underwriting, said Rochdale Securities LLC analyst Richard Bove.‘Difficult to Decipher’“You’re going to get a quarter that is going to be very difficult to decipher,” Bove said. “If people look at operating earnings, they’re going to be tremendously pleased with everything associated with the capital markets area, but you also have these losses in the retail banking area.”Earnings per share will likely decline as many banks sold shares, including Bank of America’s $13.5 billion total, after the government’s stress tests determined 10 of the biggest lenders needed more capital to withstand a prolonged recession. The 19 largest lenders have announced plans to raise more than $100 billion since the stress tests were completed.In retail, discounters such as Wal-Mart Stores Inc., based in Bentonville, Arkansas, have fared better than higher-priced competitors.Luxury retailers such as Saks Inc. and Nordstrom Inc. have been among the hardest-hit by the slowdown in consumer spending, said Sarah Henry, an analyst with MFC Global Investment Management. “People are shopping for value, and Wal-Mart’s message is very resonant right now,” she said.Raw MaterialsSliding consumer demand from the retail sector to manufacturing has ultimately affected raw-materials providers, leaving producers of commodities such as aluminum and chemicals struggling to remain profitable.Steelmakers are grappling with prices that have yet to rebound after demand plunged the most since World War II. Luxembourg-based ArcelorMittal, the world’s largest steelmaker, may report its third consecutive loss before returning to profit in the third quarter, analysts estimate.Melbourne, Australia-based BHP Billiton Ltd., the world’s biggest mining company, may report its first profit decline in nine years for the 12 months ended June 30, because of a drop in commodity prices, according to analyst estimates. The Reuters/Jefferies CRB Index of 19 materials has plunged 46 percent in 12 months.Dow Chemical Co., the largest U.S. chemical maker, may report a second-quarter loss and a 94 percent profit decline in the current quarter, according to analysts’ estimates, as falling demand for paints and plastics prompt the industry to shut factories. The Midland, Michigan-based company announced three plant closures and 2,500 job cuts on July 1.“There is no pricing power in chemicals,” Fifth Third’s Demos said. “That area is a disaster.”http://www.bloomberg.com/apps/news?pid=20601087&sid=apzVRyR2Nbp0
If they get what they want, it will fairly sink America. It will essentially transfer everything to all the non-producing areas.
“Any improvement will come from cost cutting, and that’s not sustainable. If you have no anticipation of top-line growth — it will be a little tougher to generate that enthusiasm into the fourth quarter.”the Devils are in the details of the Fortune 500 SEC filed 8K’s and 10K’s. there are also other filings by the big companies during each quarter. there is no growth and red ink abounds and cost cost cutting to save cash and serivce large amounts of debt are the order of the day for most. Cost cutting equals more NO JOBS! Comparisons to the last three quarters of 2008 should not hold much value, as 2008 sucked too… and one can only wonder what is ahppneing to small and medium size business, especially those that make things. The note on Dow Chemical above is onimous in that they provide goods to almost every company in exisistance.
Well, I agree. There’s a lot of room for improvement. This month’s Harper’s carries a lead story titled, “Barak Hoover Obama: The Best and the Brightest Blow It Again.” Interesting reading.SWK
The thing that saved Job in the end was his abiding faith in God. Unfortunately, too many people in recent years, whether believers, agnostics, or atheists, have been worshiping at the temple of mammon. I believe you are right, Morbid, that a long and painful lesson in humility is on its way for everyone.SWK
As an adjunct to many of the healthcare postings here, beware of the ultimate goal not the short term stance.Yes, a goal of the plan is to provide coverage to everyone (a noble and humanistic goal), another goal is to streamline healthcare delivery and make it more efficient so that waste can be minimized (another noble and logical goal). The unspoken goal is to make U.S. businesses more competitive with other nations who “subsidize” or ignore worker health (again this is a philosophically driven goal to level the playing field and make the “game” fair).My question to you is this. How do you solve a difficult problem whose only straightforward solutions would cost you your job or career?The Medicare problem is an intractable wall standing before us. There is no easy way over, around or through this financial barrier. Anyone who charts a path to conquer this financial monster will inevitably piss a large group of citizens off no matter what choices are made.The answer is that you get someone else to solve the problem for you and be responsible for the difficult decisions.Well folks, the one who is going to solve that problem and make those difficult decisions is you. Yes, you the one reading this!Once healthcare services are universal but not yet equal, the first push will be to equalize services across all groups. Of course, now that the debate is framed as this affects everyone as opposed to young v old, or healthy v ill, or rich v poor, the debate will laser in on what is practicable an affordable. You want coverage for this, then it will cost you X amount per year in taxes to provide that. Everyone in favor say aye and so on. The second push will come as soon as the burden of our choices becomes overwhelming. Suddenly, grandma’s ongoing long term health expenses despite her incapacitated and frail condition weighs against young Johnny’s expense to get his heart repaired. Money, money, money just where do we draw the line?Such decisions will be before you soon, because the government and insurance companies are not going to take the wrath by making those decisions for you. No they are conveniently framing the questions so that it’s completely up to you!P.S. The only way to make sure that this doesn’t happen down the road is to make the reforms are binding on the House and Executive Branch. Make them eat what they cook!
Check this out:Someone apparently stole Goldman’s program trading code:Reuters:http://blogs.reuters.com/commentaries/2009/07/05/a-goldman-trading-scandal/Zero Hedge:http://zerohedge.blogspot.com/2009/07/is-case-of-quant-trading-industrial.html
Let’s not be so naive as to think that BO and team are in there for “the greater good”- PLS. BO went for and obtained the Presidency first and foremost for HIMSELF and his family. ALL those that feed at the public trough do so for the benefit of THEMSELVES. As a caveat there may be a sprinkling of community minded souls amongst them but far too few to matter. People, it’s a business.Governing sheeple is a business.So, taken from that point of view, it should be very clear that whoever achieves the Presidency must join with those that wield the true power and influence in Washington. For decades now that has been Wall St and the Big Banks .None are more sinister or powerful than GS. Without complicite subservience to the desires of GS, no one can hope to reach the Presidency.BO knew pretty much what he was inheriting in the economy. It’s foolish and naive to believe otherwise. The game for BO now as always is a 2nd term. That’s it, the be all and end all. And GS will ensure that “thier man” will get the prize. BO and his team get to feed at the trough for several years and all the perks later that may bring- his reward for being a loyal GS servant.GS is calling the shots on the US economy through Treasury and the Fed . We have no idea the details of really how they are playing their game. We see snippets, we see the publicly available information, we can ponder the wider macro situation- but we do NOT get to see behind the curtain. That realm is for the chosen ones- we are not of them.The best way we are able to ponder the economic future is to understand the options available to BO and the GS gang and read the tea leaves, join the dots etc.There is an epiphany coming for the US people. And that is the dawning apon them that their Govt has lost the means by which it seeks to control the US economy.This will truly shock most Americans and particularly the Boomer generation whose expectations of that huge social security net are about to vanish. With that pact destroyed, the sheeple may not not feel so respectful of their institutions of authority. So right now the battle for the hearts and minds of the sheeple is THE battle they believe they must successfully engage. This means massive MSM spin worldwide on an unprecedented scale- the green shoots campaign. TPTB must avert this epiphany from happening at all costs because if it it does become publicly apparent that they “have no clothes”- the path to social chaos will beckon.
what we read as news is not determined by that which has happened but by who the writers are
Greetings from Italy. We left Caracas a week ago, leave for Greece today, and return to Italy in a week, where we will stay until early August. Then, it is back to Venezuela where we will stay until early October when we return home to Argentina; from where I will be able to keep a closer eye on the economy and markets.I have not been able to read as much as I would like while on the road but, despite the positive take on the recovery by the guys at ECRI, I agree with the negative outlooks by the Professor, Hussman, Krugman, Shilling; Hatzius, etc. My yellow-weed-o-meter is reading high. The Obi “mirage” recovery, IMO, is history.I bought SPX June 30 875 puts in mid-May which unfortunately expired worthless; which goes to show how difficult it is to make a buck trading short-term options. However, I would not be surpirsed if the S&P500 breaks 800 this month.I hold a few high dividend blue-chip stocks (PG, KFT, MO, PFE) plus TIE which I plan to hold (about 10% total in stocks), but need to reassess my position in commodities (about 5% in oil and grains leap options) as I tend to be on Shilling’s camp in regards to deflation, even though this is difficult to believe given all the liquidity.Opinions are most welcomed:-)
See my post bellow. I post “all day long” during the six months we stay in Argentina.I do my best to try and sense what the markets will hold as the truth in the near term (i.e., next couple of months). I try not to look to far ahead into the game as I don’t think you can make much money this way.As you may recall, from a copule of posts in mid-April, while already on the road I was bullish until then. In mid-April I turned lukewarm on the recovery. Now, I have turned bearish again ((perhaps a bit too early).
What is it about Americans? Why don’t they see health care as a fundamental human right & something that should be provided for the greater good of society? A healthy population is a productive population. For-profit health care is a vulgar and inhuman construct. Why should being sick bankrupt you?
wouldn’t that last line sound better if it wereher economy a’ drownin
That the banana republic with the capital on the potomac has its second president for life.
Stop your whining and become a part of the problem/solution … Climate Exchange Plc can be found at CLE.LSE or CXCHY.NOOIf you can’t beat them, join them.Further info:Shares In Issue / Top 10 HoldersShares in Issue – 47,412,111Shares not in public hands is 63%Top 10 Shareholdersas at 29 May 2009Invesco Asset Managment Limited 29.22%Directors and Related 19.00%Harbert Management Corporation (Institutional Group) 14.78%BlackRock Investment Management (UK) Ltd 7.69%JP Morgan (Broker Group) 1.97%Moore Capital Management Inc 1.76%Goldman Sachs (Broker Group) 1.62%Fortis (Institutional Group) 1.52%Ontario Teachers’ Pension Plan Board 1.48%Banc of America Securities 1.25%63% of the Company’s shares are not in public hands, these being held by Directors of the Company as follows (approved 1.04.09) and those of related parties (shareholders of 10%+ of ISC)Dr. R L Sandor 8,410,614 sharesN D Eckert 1,084,124 sharesC Brookins 16,252 sharesK Gierstner 37,000 sharesL Magnus 3,093 sharesB Williamson 500 sharesDirectors:Richard Sandor, ChairmanNeil Eckert, Chief Executive OfficerMatthew Whittell, Chief Financial OfficierCarole Brookins, Non Executive Director +*Klaus Gierstner, Non Executive Director *Sir Laurie Magnus, Non Executive Director +*Sir Brian Williamson, Non Executive DirectorAudit Committee +Remuneration Committee *Company Secretary:Philip Scales
Just so we are clear on this, the king of all ponzi schemes is the fact the the US got China and India to take trillions of USD for real goods and services, and using the only credible policy tool left in their arsenal, the debasing of the currency, they are now taking it all back. So the deed is already done and it doesn’t really matter going forward what the ROW uses for a reserve currency. Of course, that doesn’t do much for the children or grandchildren of the boomers, but at least they got to have their party.Happy 40th anniversary of Woodstock, baby! Can you dig it?
Barack Hoover Obama: The Best and the Brightest Blow It AgainBarack Hoover Obama:The best and the brightest blow it againHarper’s Magazine- July 2009By Kevin BakerThree months into his presidency, Barack Obama has proven to be every bit as charismatic and intelligent as his most ardent supporters could have hoped. At home or abroad, he invariably appears to be the only adult in the room, the first American president in at least forty years to convey any gravitas. Even the most liberal of voters are finding it hard to believe they managed to elect this man to be their president.It is impossible not to wish desperately for his success as he tries to grapple with all that confronts him: a worldwide depression, catastrophic climate change, an unjust and inadequate health-care system, wars in Afghanistan and Iraq, the ongoing disgrace of Guant·namo, a floundering education system.Obama’s failure would be unthinkable. And yet the best indications now are that he will fail, because he will be unable—indeed he will refuse—to seize the radical moment at hand.Every instinct the president has honed, every voice he hears in Washington, every inclination of our political culture urges incrementalism, urges deliberation, if any significant change is to be brought about. The trouble is that we are at one of those rare moments in history when the radical becomes pragmatic, when deliberation and compromise foster disaster. The question is not what can be done but what must be done.We have confronted such emergencies only a few times before in the history of the Republic: during the secession crisis of 1860–61, at the start of World War II, at the outset of the Cold War and the nuclear age. Probably the moment most comparable to the present was the start of the Great Depression, and for the scope and the quantity of the problems he is facing, Obama has frequently been compared with Franklin Roosevelt. So far, though, he most resembles the other president who had to confront that crisis, Herbert Hoover.The comparison is not meant to be flippant. It has nothing to do with the received image of Hoover, the dour, round-collared, gerbil-cheeked technocrat who looked on with indifference while the country went to pieces. To understand how dire our situation is now it is necessary to remember that when he was elected president in 1928, Herbert Hoover was widely considered the most capable public figure in the country. Hoover—like Obama—was almost certainly someone gifted with more intelligence, a better education, and a greater range of life experience than FDR. And Hoover, through the first three years of the Depression, was also the man who comprehended better than anyone else what was happening and what needed to be done. And yet he failed.The story of the real Herbert Hoover reads like something out of an Indiana Jones script, with touches of Dickens and the memoirs of Albert Schweitzer. Orphaned and penniless by the age of nine, Hoover was raised by an exploitative uncle who considered him more chattel than son. He had no illusions about the America he grew up in, writing years later, “As gentle as are the memories of the times, I am not recommending a return to the good old days. Sadness was greater, and death came sooner.”Removed from public school at fourteen to work as his uncle’s office boy, Hoover nonetheless learned enough at night school to make the very first class at the newly opened Stanford University, where he studied geology and engineering. He paid his own way by working as a waiter, a typist, and a handyman, and eventually running a laundry service, a baggage service, and a newspaper route. (Unsurprisingly, his favorite book was David Copperfield.) After graduation, he ran mining camps and scouted new strikes around the globe. It was an adventurous life; on one occasion he made a small fortune by following an ancient Chinese map and tiger tracks into a moribund silver mine in Burma. By the time he was forty, Hoover was worth $85 million in today’s dollars, and he retired from business to take up public life. “The ideal of service,” he would later write, was no burden on the striving entrepreneur but a “great spiritual force poured out by our people as never before in the history of the world.”He had long lived up to his ideals. Caught in the siege of the Western delegations in Peking during the Boxer Rebellion of 1900, only Hoover and his fearless wife, Lou, cared enough to sneak food and water to the Chinese Christians besieged elsewhere in the city. He first came to national attention after the start of World War I, when he led the effort to feed the 7 million people of occupied Belgium and France. He worked for free, donated part of his own fortune to the cause, and risked his life repeatedly crossing the U-boat–infested waters of the North Atlantic. His postwar relief efforts rescued millions more throughout Europe and especially in the Soviet Union; it’s unlikely that any other individual in human history saved so many people from death by starvation and want. Questioned about feeding populations under Bolshevik control, he banged a table and insisted, “Twenty million people are starving. Whatever their politics, they shall be fed!” In 1920, many people in both major parties wanted to run him for president, but he opted for the Republican cabinet. As secretary of commerce under Warren Harding and Calvin Coolidge, he was a dynamic figure, tirelessly promoting new technologies, work-safety rules, and voluntary industry standards; he supervised relief to Mississippi and Louisiana during the terrible 1927 floods and advocated cooperation between labor and management.“We had summoned a great engineer to solve our problems for us; now we sat back comfortably and confidently to watch the problems being solved,” the journalist Anne O’Hare McCormick wrote of Hoover’s inauguration in March 1929, in words that might easily have been used in January 2009. “Almost with the air of giving genius its chance, we waited for the performance to begin.”Genius got its chance less than eight months after Hoover was sworn in, when the stock market collapsed. At the time, such an event wasn’t seen as having anything much to do with the president. Wall Street crashes happened every five to ten years in the old American economy, and it was understood that these crashes would sometimes start nationwide recessions. They might last a year or two, like the recession that started in 1920, or for much longer, like the devastating depression that began in 1873 and, according to some economists, didn’t really end until 1897. How long would it take to recover from the crash of ‘29? Who could know? Mere politicians were supposed to leave the outcome to the workings of the market. But Hoover—much like Obama—plunged right in, with a response that was designed to rise above old ideological battles and effect a new partnership between the public and private sectors. Less than a month after the Wall Street crash, he began what would be weeks of meetings at the White House with hundreds of “key men” from the business world. There the president briefed them on everything he had done so far and urged them to cut as few jobs as possible for the duration of the slump. He also encouraged public and private construction projects, signed bills recognizing the right of unions to organize, and used the fledgling Federal Reserve both to ease credit and to discourage banks from calling in their stock-market loans.All of these projects were anathema to old-line conservatives in Hoover’s own party, such as Andrew Mellon, the tax-slashing secretary of the treasury throughout the go-go years of the 1920s boom, who offered the president the absurdist advice to let the market “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” Cutting one of the main ties to the trickle-down wisdom of what was suddenly a previous era, Hoover eventually shipped Mellon off to serve as ambassador to England.Yet there remained little immediate action that the president could take, hobbled as he was by the limits of a federal government that made up less than 4 percent of the GDP and by the reluctance of those around him to interfere in any way with the sanctity of the markets. At what John Kenneth Galbraith would later skewer as “no-business” meetings, the key men of industry pledged their full support, then went home to slash wages and cut as many jobs as they could. By the end of 1930, the gross national product had dropped by nearly 13 percent, unemployment had shot up to nearly 9 percent, and over 600 banks had closed. The Democrats won a majority in the House of Representatives, but the primary response to the Depression offered by their laconic speaker, “Cactus Jack” Garner, was a national sales tax designed to balance the budget. Liberal legislators in both parties were more sympathetic, but they wielded little power.As the Depression spread around the world, Hoover—like Obama—towered above the squabbling, suspicious leaders of Europe as well. Only Hoover, who had lived all around the world (like Obama) and also been part of the U.S. delegation at Versailles, seemed to understand the true threat the Depression posed to the global economy. Democratic forms of government were under assault everywhere in the West, and especially in the Weimar Republic, still staggering under the indemnity the victorious Allies had imposed on Germany in 1919. Hoover sought to alleviate the growing world credit crunch by pushing through a moratorium on the repayment of Europe’s considerable war debt to the United States—on the condition that the Allies also forgave Germany its indemnity. It was an example of statesmanship at its most enlightened, and if any single U.S. action at the time could have prevented the rise of the Nazis to power, this would have been it.Back on the domestic front, Hoover tried to organize national, voluntary efforts to hire the unemployed, provide charity, and create a private banking pool. When these efforts collapsed or fell short, he started a dozen Home Loan Discount Banks to help individuals refinance their mortgages and save their homes, and created an unprecedented government entity called the Reconstruction Finance Corporation. Authorized to spend up to the then-astonishing sum of $2 billion, the RFC was a direct rebuttal to Andrew Mellon’s prescription of creative destruction. Rather than liquidating banks, railroads, and agricultural cooperatives, the RFC would lend them money to stay afloat.Hoover, as the historian David M. Kennedy writes, had shown “himself capable of the most pragmatic, far-reaching, economic heterodoxy,” a trait that “would in the end carry him and the country into uncharted economic and political territory.” New Dealer Rexford Tugwell would, many years later, claim that “practically the whole New Deal was extrapolated from programs that Hoover started.” Indeed, “Hoover had wanted—and had said clearly enough that he wanted—nearly all the changes now brought under the New Deal label.”Tugwell’s appraisal, though considerably exaggerated, nonetheless testifies to the boldness of Hoover’s program. The only problem was that it did not work. The nation’s credit system still would not thaw, banks kept falling like dominoes, unemployment rates and human suffering continued to rise. For all of his willingness to break with precedent and intervene directly in the economy, Hoover remained unable to turn his back fully on what Kennedy describes as the prevailing “legacy of perception and understanding of economic theory.”As Europe faltered, for instance, foreign gold began to flow out of America’s banks and back home. Hoover reacted by increasing interest rates and raising taxes, in an effort to further deflate the economy, balance the federal budget, and thereby lure the gold back. This was the textbook economic response of the time to fleeing gold reserves; in the midst of the Great Depression, it was a disaster.Meanwhile, the RFC was derided by populist critics as “bank relief” and “a millionaire’s dole”—criticisms echoed today by all those who see George W. Bush’s Troubled Asset Relief Program and Obama’s own Public-Private Investment Program as outrageous giveaways. And, as Kennedy points out, once Hoover had set in motion the great bank bailout of 1931, he “had given up the ground of high principle” and “implicitly legitimated the claims of other sectors for federal assistance.” Critics raised the same criticisms they would raise about Obama’s bailout plans seventy-eight years later. If the banks get a bailout, why not everyone else? Were bailouts only for the rich?Exacerbating the entire situation was the RFC itself. Hoover’s leading weapon to combat the Depression performed with TARP-like languor, secrecy, and nepotism. Throughout 1932, as banks continued to topple by the hundreds, the RFC disbursed only three-quarters of its available money. Although Hoover had declared that the agency was “not created for the aid of big industries or big banks,” a record of its operations revealed that most of its money had indeed gone to a very few of the country’s biggest financial institutions. In June of 1932, the RFC’s president, Charles G. Dawes—who had just served as vice president of the United States under Calvin Coolidge—resigned his post, took a new job as head of the Central Republic Bank in Chicago, and promptly secured for his employer an RFC loan that nearly equaled the bank’s total deposits. Dawes’s successor, Atlee Pomerene, then lent another $12 million to a Cleveland bank of which he remained a director.These facts were, in the end, wrestled out in the open only by congressional fiat. The recipients of some $642 million of the RFC’s loans—nearly half its total expenditures—were not revealed at all. Hoover, like Obama, had insisted on secrecy to keep the proceedings from being “politicized,” but, inevitably, this fear of politicization in the end only led to more politics. The writer John T. Flynn, who reported much of the RFC scandal in the pages of this magazine, found that most of the money was distributed “by a group of directors drawn from those business groups whose performances during the pre-crash years have rendered them objects of suspicion to the American people” and that the “immense sums they dispensed were given to borrowers, many of whom, to put it mildly, have forfeited, justly or unjustly, the confidence of the people.”The RFC’s deliberations were understood—with good reason—not as effective management but as insider dealing: common financial practice through the 1920s, but politically and morally insupportable at a time when millions of Americans were losing their jobs, their homes, and their savings, and when some were literally dying of starvation. What’s more, even the loans that were made proved less than effective. The rescued banks, much like the rescued banks today, simply hoarded the new capital and refused to venture out into the marketplace.Neither the RFC nor any of Hoover’s other programs did anything to seriously address the other major problems then plaguing the American economy: the decades-long farm crisis that was sweeping away Dust Bowl farmers’ actual soil along with their holdings; the near annihilation of the labor movement; a wildly unequal distribution of wealth; the lack of any real safety net for the old, the indigent, and the unemployable; a corrupt, non-transparent financial system that remained largely unregulated—in short, the need for systematic, wholesale reform of a nation that had foundered on the changing circumstances of the modern world.It would have been very difficult to make most of these changes, because by and large they were advocated only by what were then the most radical individuals on the fringes of the political system. The one thing to be said in favor of such changes was that they were absolutely necessary.By the summer of 1932, the country was in a state of near rebellion, with the “Bonus Army” of angry veterans camped out in Washington, farmers dumping their produce on the highways in protest, and mobs forcibly stopping evictions in the cities. The liberals in Congress had moved at last beyond Hoover, with even Jack Garner backing a $2.1-billion package of public works and direct relief. Hoover vetoed it, warning against the moral entrapments of “the dole.”Why was Herbert Hoover so reluctant to make the radical changes that were so clearly needed? It could not have been a question of competence or compassion for this lifelong Quaker, who had rushed sustenance to starving people around the world regardless of their nationalities or beliefs. Ultimately, Hoover could not break with the prevailing beliefs of his day. The essence of the Progressive Era in which he had come of age—the very essence of his own public image—was that government was a science. It was not a coincidence that this era brought us the very term “political science,” along with the advent of “nonpartisan” elections and “city managers” to replace mayors.Since the 1890s, Hoover and his contemporaries had promoted this brand of progressivism as an alternative not only to the political and corporate corruption of the Gilded Age but also to the furious class and regional warfare that progressivism’s predecessor, populism, seemed to promise. Progressivism aspired to be something of a political science itself, untrammeled by ideological or partisan influence: there was a right way and a wrong way to do things, and all unselfish and uncorrupted individuals could be counted on to do the right thing, once they were shown what that was.There were plenty of progressives, led by Teddy Roosevelt, who understood that bringing real change meant fighting to bust up trusts, regain public ownership of utilities, and secure rights for labor, women, and others. But the great national effort inspired by World War I softened memories of the bitter class conflict that had characterized much of American politics since the Civil War, just as the rollicking prosperity of the 1920s erased memories of the postwar Red Scare and the crushing of labor unions. Throughout the decade, big business sought to co-opt any lingering labor resentments by forming “company unions” under what they called “the American Plan.” Volunteerism and boosterism would take care of the rest. Prosperity would come through an always rising stock market.Hoover’s every decision in fighting the Great Depression mirrored the sentiments of 1920s “business progressivism,” even as he understood intellectually that something more was required. Farsighted as he was compared with almost everyone else in public life, believing as much as he did in activist government, he still could not convince himself to take the next step and accept that the basic economic tenets he had believed in all his life were discredited; that something wholly new was required.Such a transformation would have required a mental suppleness that was simply not in the makeup of this fabulously successful scientist and self-made businessman. And it was this inability to radically alter his thinking that, ultimately, distinguished Hoover from Franklin Roosevelt. FDR was by no means the rigorous thinker that Hoover was, and many observers then and since have accused him of having no fixed principles whatsoever. And yet it was Roosevelt, the Great Improviser, who was able to patch and borrow and fudge his way to solutions not only to the Depression but also to sustained prosperity and democracy. It was FDR, brought up with the entitled, patronizing worldview of a Hudson Valley aristocrat, who was able to overcome attachments to all classes, all theories. It was Roosevelt who understood the imperfections, the rough-and-tumble of politics. The programs of the First and Second New Deals were a hodgepodge of ideologies—which is precisely why they worked. The innovations they brought about, however sloppily, were the core of twentieth-century American liberalism in that they reflected the complex ever-changing realities of the modern world.Originally, Roosevelt, too, endorsed much of the progressive vision—or at least its pale 1920s imitation—as evidenced by his National Recovery Administration, a flabby utopian plan that would have had business, labor, and government collaborate to set prices, wages, and industry standards down to the most minute details. The NRA would have carried 1920s-style business progressivism right to the doorstep of the corporate state, had it been even vaguely workable. But right from the beginning, Roosevelt also endorsed reforms, from regulating Wall Street to saving the farmers to backing labor unions in their organizing wars, that required _conflict—_the only way in which a political and economic system can be fundamentally remade. When the NRA quickly proved to be a bust, FDR discarded it, and replaced his failure with the Second New Deal, in which business, labor, and government were situated as countervailing forces against one another—a fundamental power shift that enabled advances in both prosperity and democracy unmatched in human history.Much like Herbert Hoover, Barack Obama is a man attempting to realize a stirring new vision of his society without cutting himself free from the dogmas of the past—without accepting the inevitable conflict. Like Hoover, he is bound to fail.President Obama, to be fair, seems to be even more alone than Hoover was in facing the emergency at hand. The most appalling aspect of the present crisis has been the utter fecklessness of the American elite in failing to confront it. From both the private and public sectors, across the entire political spectrum, the lack of both will and new ideas has been stunning. When it came to the opposition, Franklin Roosevelt reaped the creative support of any number of progressive Republicans throughout his twelve years in office, ranging from New York Mayor Fiorello La Guardia to Nebraska Senator George Norris to key cabinet members such as Henry A. Wallace, Harold Ickes, Henry Stimson, and Frank Knox. Obama, by contrast, has had to contend with a knee-jerk rejectionist Republican Party.More frustrating has been the torpor among Obama’s fellow Democrats. One might have assumed that the adrenaline rush of regaining power after decades of conservative hegemony, not to mention relief at surviving the depredations of the Bush years, or losing the vestigial tail of the white Southern branch of the party, would have liberated congressional Democrats to loose a burst of pent-up, imaginative liberal initiatives.Instead, we have seen a parade of aged satraps from vast, windy places stepping forward to tell us what is off the table. Every week, there is another Max Baucus of Montana, another Kent Conrad of North Dakota, another Ben Nelson of Nebraska, huffing and puffing and harrumphing that we had better forget about single-payer health care, a carbon tax, nationalizing the banks, funding for mass transit, closing tax loopholes for the rich. These are men with tiny constituencies who sat for decades in the Senate without doing or saying anything of note, who acquiesced shamelessly to the worst abuses of the Bush Administration and who come forward now to chide the president for not concentrating enough on reducing the budget deficit, or for “trying to do too much,” as if he were as old and as indolent as they are.Senate Majority Leader Harry Reid—yet another small gray man from a great big space where the tumbleweeds blow—seems unwilling to make even a symbolic effort at party discipline. Within days of President Obama’s announcing his legislative agenda, the perpetually callow Indiana Senator Evan Bayh came forward to announce the formation of a breakaway caucus of fifteen “moderate” Democrats from the Midwest who sought to help the country make “the changes we need” but “make sure that they’re done in a practical way that will actually work”—a statement that was almost Zen-like in its perfect vacuousness. Even most of the Senate’s more enlightened notables, such as Russ Feingold of Wisconsin or Claire McCaskill of Missouri or Sherrod Brown of Ohio, have had little to contribute beyond some hand-wringing whenever the idea of a carbon tax or any other restrictions on burning coal are proposed.President Obama, with a laudable respect for the separation of powers, has left the details and even the main tenets of his agenda to be worked out by these same congressional Democrats. This approach looks like an exercise in democracy drawn from his days as a community organizer, the sort of strategy that helps a neighborhood to decide whether it wants, say, a health clinic or a youth center. What he doesn’t care to acknowledge is that, in the case of the U.S. Congress, he’s dealing with a neighborhood where maybe half want a health clinic and the rest are holding out for grenade launchers and crystal meth.Some have suggested that this is a subtle strategy to ensure that the White House retains the whip hand, that Obama is reserving for himself the role of “decider” over competing plans. But what is the decision then? Half a health clinic and one grenade launcher? A plan for universal health care that is not universal and doesn’t cut costs will not work. A plan for combating climate change that perpetuates the shibboleth of “clean coal” will do nothing. Far from controlling the process, Obama’s procedure is more likely to commit him to one of Congress’s nebulous non-plans.Yet Obama’s lack of direction, his lack of accomplishments in his Hundred Days and counting, cannot be attributed solely to his illusions about the august body he just vacated. Obama, like Hoover in his time, is almost alone among politicians in grasping the magnitude of the crisis. In his masterful February speech before the joint houses of Congress, Obama explained to the country why we cannot afford to continue with a tottering health-care system that has left 46 million Americans uninsured and that impedes our exports by adding, for instance, $1,500 to the cost of every GM car; why it is that climate change has to be addressed now, and how by addressing it we can regain our industrial base and actually begin to make things again; why it is that our financial system could not simply be bailed out and patched up but must be fundamentally reformed and re-regulated. Above all, he explained the necessary interaction of all these reforms, of how they were not just some liberal wish list but the actions that the radical moment demanded.Speeches almost as powerful have followed, always linking these ideas together. But, like Hoover, Obama has been unable to make his actions live up to his words. Health care is being gummed to death on Capitol Hill. Obama has done nothing to pass “card check” provisions that would facilitate union organization and quietly announced that he would not seek stronger labor and environmental protections in NAFTA. He has capitulated on cap-and-trade in the budget outline and never even bothered to push for an actual carbon tax. Only minuscule portions of the stimulus bill or his budget proposals were dedicated to mass transit, and his indifference to the issue—what must be a major component of any serious effort to go green—was reflected in his appointment of a mediocre Republican time-server, Ray LaHood, as his transportation secretary.Still worse is Obama’s decision to leave the reordering of the financial world solely to Larry Summers and Timothy Geithner, both of whom played such a major role in deregulating Wall Street and bringing on the disaster in the first place. It’s as if, after winning election in 1932, FDR had brought Andrew Mellon back to the Treasury. Just as Herbert Hoover could not, in the end, break away from the best economic advice of the 1920s, Barack Obama is sticking with the “key men” of the 1990s. The predictable result is that, even as he claims to recognize the interlocking nature of the problems facing us and vows to solve them as a whole, the president is in fact abandoning most of his program, at least for the time being.No doubt, President Obama and his chief of staff, Rahm Emanuel, would claim that by practicing “the art of the possible,” they are ensuring that “the perfect does not become the enemy of the good.” But by not even proposing the relevant legislation, Obama has ceded a key part of the process—so much so that his retreat seems not so much tactical as a reversion to his core political beliefs.A major theme of Obama’s 2006 book The Audacity of Hope is impatience with “the smallness of our politics” and its “partisanship and acrimony.” He expresses frustration at how “the tumult of the sixties and the subsequent backlash continues to drive our political discourse,” and voices a professional appreciation for Ronald Reagan’s ability to exploit such divisions. The politician he admires the most—ironically enough, considering the campaign that was to come—is Bill Clinton. For all his faults, Clinton, in Obama’s eyes, “instinctively understood the falseness of the choices being presented to the American people” and came up with his “Third Way,” which “tapped into the pragmatic, non-ideological attitude of the majority of Americans.”This is an analysis consistent with Obama’s personal story. Like Herbert Hoover, Obama grew up as an outsider and overcame formidable odds—hence his constant promotion of personal responsibility and education. He came of age in a time when hardworking young men and women like him went to Wall Street or to Silicon Valley, and—once properly “incentivized” by the likes of Ronald Reagan and Bill Clinton—seemed to save the national economy, creating what appeared to be great general prosperity while doing well themselves. There’s no need to do battle with these strivers and achievers, individuals as accomplished in their fields as Obama is in his. All that’s required is to get them back on their feet, get the money running again, and maybe give them a few new rules to live by, a new set of incentives to get them back on track.Just as Herbert Hoover came to internalize the “business progressivism” of his era as a welcome alternative to the futile, counterproductive conflicts of an earlier time, so has Obama internalized what might be called Clinton’s “business liberalism” as an alternative to useless battles from another time—battles that liberals, in any case, tended to lose.Clinton’s business liberalism, however, is a chimera, every bit as much a capitulation to powerful and selfish interests as was Hoover’s 1920s progressivism. We are back in Evan Bayh territory here, espousing a “pragmatism” that is not really pragmatism at all, just surrender to the usual corporate interests. The common thread running through all of Obama’s major proposals right now is that they are labyrinthine solutions designed mainly to avoid conflict. The bank bailout, cap-and-trade on carbon emissions, health-care pools—all of these ideas are, like Hillary Clinton’s ill-fated 1993 health plan, simultaneously too complicated to draw a constituency and too threatening for Congress to shape and pass as Obama would like. They bear the seeds of their own defeat.Obama will have to directly attack the fortified bastions of the newest “new class”—the makers of the paper economy in which he came of age—if he is to accomplish anything. These interests did not spend fifty years shipping the greatest industrial economy in the history of the world overseas only to be challenged by a newly empowered, green-economy working class. They did not spend much of the past two decades gobbling up previously public sectors such as health care, education, and transportation only to have to compete with a reinvigorated public sector. They mean, even now, to use the bailout to make the government their helpless junior partner, and if they can they will devour every federal dollar available to recoup their own losses, and thereby preclude the use of any monies for the rest of Barack Obama’s splendid vision.Franklin Roosevelt also took office imagining that he could bring all classes of Americans together in some big, mushy, cooperative scheme. Quickly disabused of this notion, he threw himself into the bumptious give-and-take of practical politics; lying, deceiving, manipulating, arraying one group after another on his side—a transit encapsulated by how, at the end of his first term, his outraged opponents were calling him a “traitor to his class” and he was gleefully inveighing against “economic royalists” and announcing, “They are unanimous in their hatred for me—and I welcome their hatred.”Obama should not deceive himself into thinking that such interest-group politics can be banished any more than can the cycles of Wall Street. It is not too late for him to change direction and seize the radical moment at hand. But for the moment, just like another very good man, Barack Obama is moving prudently, carefully, reasonably toward disaster.
What bankrupts America’s health care is that no one will put it on a budget.A budget will mean that unusual life prolonging procedures will not be covered – such as transplants, chemo, etc. Well, the shopping list of what could reasonably be covered is long and basic.This mentality that the last ounce of life must be squeezed out of health care is killing any reasonable reform. We need to face the prospect of rationed health care.If rationed health care were undertaken the $40 Trillion current entitlement would be vastly reduced – ensuring that the youngest and next generation would be healthy and productive.
From Above,What bankrupts America’s health care is that no one will put it on a budget.A budget will mean that unusual life prolonging procedures will not be covered – such as transplants, chemo, etc. Well, the shopping list of what could reasonably be covered is long and basic.This mentality that the last ounce of life must be squeezed out of universal health care is killing any reasonable reform. We need to face the prospect of rationed health care. Of course if you are rich you can get further health care by privately paying for it.If rationed health care were undertaken the $40 Trillion current entitlement would be vastly reduced – ensuring that the youngest and next generation would be healthy and productive.
Yep. That fundamental right has been in place in Cuba and similar places for decades, and they’ve been leaving the rest of us in the dust.
Are there any lawyers here who can explain to me why USA ambassador is STILL in Honduras? I thought the law required pulling ambassador out and cutting diplomatic ties because of the illegal coup. Isn’t Obama breaking the law of USA?
A great literary production. Don’t you just love it when people can write? Freud was an excellent writer and look at the result, for instance in France, a country that treasures great writers: Half the country today is on neuroleptics! We love a good story and this allegation that Obama is Hoover reincarnated is just perfect. However, I would like to see someone write an equally compelling romance proving the opposite. Gotta love those Harpers folks!
Who has determined that it was an illegal coup? My understanding is that the President of Honduras was replaced because he was trying to circumvent that country’s constitution. He was trying to annul term limits with a view to becoming President for life, a la Chavez.Pity we can’t put a few of our politicians on their bikes!
Oh my god, WHERE did you get that completely bogus “understanding”??!! (Let me guess; the CIA rag called the Washington Post?) You could hardly GET farther from the truth! The coup most certainly is illegal, and the usa is most certainly up to their ears again (still) in actively destabilizing any and all south and central american democracies that attempt to put human needs ahead of profits for oligarchs. Jeez, do some READING!!! And do it quick before El Salvador and Guatemala’s oligarchs (who are watching to see how this illegal deal ends) try to pull the same fascist shit on THEIR people!WE MUST STAND IN SOLIDARITY WITH HONDURAS’ PEOPLE AND THEIR ELECTED PRESIDENT! There can be no wiggle-room here! It’s either defend the rule of law or accept and defend being ruled by kingpins!
No, Morbid, what bankrupts America’s health care is A) the uncalled-for stratospheric military budget, B) the fact that the vulgar and inhumane (thanks Yve) private, for-profit system is the very LEAST efficient vehicle for delivering health care, and C) piling unlimited heaps of the nation’s money on Goldamn Sachs, etc.THE SCARCITY IS MANUFACTURED. IT DOES NOT HAVE TO BE AT ALL.You’ve watched Logan’s Run too many times, Morbid?
>Who has determined that it was an illegal coup?The United Nations, the Organization of American States, and the EU have all condemned the military coup as illegal. President Zelaya was removed from the country by force, without an opportunity to appear in court to contest the charges against him before he was forcibly exiled, and this is a denial of the due process of law, a fundamental human right and a cornerstone of all free and democratically based societies.Basically, the President decreed a referendum which the Honduran Supreme Court and other officials deemed illegal. The President went ahead and ordered the Chief of the Army, Romeo Vásquez Velásquez, to distribute ballots anyway (in Honduras, one of the Army’s duties is to assist the government in carrying out elections), but he refused, so the President fired him. The Supreme Court and Parliament then ruled the dismissal of Vásquez to be illegal, and one of the judges on the Supreme Court issued an order charging the President with having committed treason and abuse of authority, and directing the armed forces to detain him at his home. Just before the polls were to open for this referendum on the 28th of June, the military forced the President into exile.From the OAS web site:OAS SUSPENDS MEMBERSHIP OF HONDURASJuly 5, 2009The Special General Assembly of the Organization of American States (OAS) decided today to suspend immediately the right to participate in the institution of Honduras following the coup d’Etat that expelled President José Manuel Zelaya from power.In a resolution adopted by acclamation by all Member States at the headquarters of the organization in Washington, DC, the Special General Assembly instructed the OAS Secretary General, José Miguel Insulza, “to reinforce all diplomatic initiatives and to promote other initiatives for the restoration of democracy and the rule of law in the Republic of Honduras and the reinstatement of President José Manuel Zelaya Rosales.”“No such initiative will imply recognition of the regime that emerged from this interruption of the constitutional order,” specifies the resolution, that invoked for the first time Article 21 of the Inter-American Democratic CharterThe document also encourages “the Member States and international organizations to review their relations with the Republic of Honduras during the period of the diplomatic initiatives.” It also reaffirms that Honduras “must continue to fulfill its obligations as a member of the Organization, in particular with regard to human rights”, and urges “the Inter-American Commission on Human Rights to continue to take all necessary measures to protect and defend human rights and fundamental freedoms in Honduras.”The Special General Assembly was attended by the President of Argentina, Cristina Fernández de Kirchner, the President of Paraguay, Fernando Lugo, y President Zelaya, who announced his intention to travel tomorrow back to Honduras.In his speech to the plenary session, President Zelaya highlighted that “this is a very peculiar moment in the history of the Americas.” After explaining the circumstances surrounding of the coup d’Etat, President Zelaya stressed that “the Honduran people have lived already six days of repression. The people are suffering.” The Honduran leader praised the attitude of the OAS and its Member States: “You, by raising your voice, are giving hope to the Americas, and you are giving hope to the people of Honduras.”The President of Argentina said that the detention and expulsion of President Zelaya from his country were the equivalent of “kidnapping the democratic restoration in Latin America”. After remembering the negative effects of several past coups in the continent, President Fernández de Kirchner expressed her support for President Zelaya and her wish that he be restored to power as an “act of justice to the people of Honduras and of unconditional respect of Human Rights.”President Lugo mentioned that all countries in the Americas feel for the current suffering of Honduras and particularly of President Zelaya. “Forced exile is one of the greatest punishments”, he said. The Paraguayan leader said the coup was a “blow to the democratic conscience of the Continent”, and also expressed his support for President Zelaya addressing him directly: “President Zelaya, we have known and we have started to love your people, and also the manner, the style of your government.”The General Assembly reached an agreement after listening to the report of Secretary General Insulza regarding the initiatives undertaken in the 72 previous hours trying to restore democracy, the Rule of Law and President Zelaya in power, as mandated by the resolution adopted by the same Special General Assembly on Wednesday.Insulza described his conversations with members of the judicial and legislative Powers in Honduras, as well as political, business and social sectors. His initiatives included a visit to Honduras, where the Secretary General saw “an atmosphere of extreme tension.“The head of the OAS explained that the attitude of the de facto regime was “extremely firm” and “inflexible,” and therefore he said that “there seems to be no alternative” but to suspend Honduras membership to the organization.The Secretary General specified that it “should be clear that this is not an action against Honduras or against its people, but rather a means of pressure against the de facto government.”After the resolution was adopted, the Secretary General expressed his satisfaction for “the success achieved today, because a historic resolution such as this one that we have adopted unanimously has important repercussions not only for the Honduran people and its legitimate government, but also for the life of this organization.”Also took the floor during the Assembly the representatives of Jamaica (on behalf of CARICOM), Costa Rica, United States, Venezuela, El Salvador, Ecuador, Nicaragua, Mexico, Guatemala, Panamá, Chile, Peru, Uruguay, Bolivia, Brazil and Canada.The following is the full text of the resolution adopted by the XXXVII OAS Special General Assembly:RESOLUTION ONTHE SUSPENSION OF THE RIGHT OF HONDURAS TO PARTICIPATE IN THE OASTHE GENERAL ASSEMBLY,DEEPLY CONCERNED about the worsening of the current political crisis in the Republic of Honduras resulting from the coup d’état against the constitutional government of President José Manuel Zelaya Rosales, as well as his arbitrary detention and expulsion from the country, which produced an unconstitutional alteration of the democratic order;REAFFIRMING the importance of strict respect for human rights and fundamental freedoms, and the principle of nonintervention in the internal affairs of other states;HAVING RECEIVED the report of the Secretary General on the diplomatic initiatives taken in accordance with Article 20 of the Inter-American Democratic Charter, aimed at restoring democracy and the rule of law as well as reinstating President José Manuel Zelaya Rosales; and noting that these initiatives have been unsuccessful;NOTING that the regime that emerged from the coup d’état has refused to comply with the provisions of resolution AG/RES. 1 (XXXVII-E/09), adopted by the OAS General Assembly at its thirty-seventh special session, on July 1, 2009; andHAVING TAKEN a vote among the member states pursuant to the provisions of Article 21 of the Inter-American Democratic Charter,RESOLVES:1. To suspend the Honduran state from the exercise of its right to participate in the Organization of American States, in accordance with Article 21 of the Inter-American Democratic Charter. The suspension shall take effect immediately.2. To reaffirm that the Republic of Honduras must continue to fulfill its obligations as a member of the Organization, in particular with regard to human rights; and to urge the Inter-American Commission on Human Rights to continue to take all necessary measures to protect and defend human rights and fundamental freedoms in Honduras.3. To instruct the Secretary General, together with duly designated representatives of various countries, to reinforce all diplomatic initiatives and to promote other initiatives for the restoration of democracy and the rule of law in the Republic of Honduras and the reinstatement of President José Manuel Zelaya Rosales so that he may fulfill the mandate for which he was democratically elected, and to report immediately to the Permanent Council. No such initiative will imply recognition of the regime that emerged from this interruption of the constitutional order.4. To encourage the member states and international organizations to review their relations with the Republic of Honduras during the period of the diplomatic initiatives for the restoration of democracy and the rule of law in the Republic of Honduras and the reinstatement of President José Manuel Zelaya Rosales .5. To instruct the Secretary General to transmit this resolution to the other entities of the inter-American system and to the Secretary-General of the United Nations.____SWK
No, there is no such law in the U.S. There is no requirement that the U.S. withdraw its ambassador when a coup d’état occurs in a country.U.S. embassies are permanent diplomatic missions to foreign states. The purpose of U.S. embassies is to protect in the foreign state the interests of U.S. nationals, to negotiate with the governments of foreign states, to monitor and report to the Secretary of State conditions and developments foreign states, to promote good relations between the U.S. and the foreign states, and to develop joint economic, cultural and scientific relations. An ambassador, appointed by the President, is the representative of the Secretary of State in a foreign state.When there is a dispute with a foreign state, the U.S. and other countries may recall their ambassador for consultation to express displeasure with the foreign state and put a chargé d’affaires with limited authority in place of the ambassador. Typically, though, the U.S. and other states do not cut their diplomatic relations with a foreign state completely. Iran and Cuba, in which the U.S. withdrew its embassies, are notable exceptions.SWK
PB:I think the best way to come to some understanding of objective truth is to listen to what everyone has to say, then try to sort it out. Even perspectives that seem over the top — and I include a lot of posts by folks who opine on this blog — have some value in shaping our understanding of what is real and what is false.SWK
So, according to what I understand from SWK’s post immediately below, the President should have been arrested, put in jail and then put on trial for treason. Putting him on a plane out of the country was likely more humane.What would happen if President Obama did something blatantly illegal and against the constitution? Would the Suprem Court sit quietly back and do nothing? (Oh, I forgot, they did. He completely steamrolled the legal rights of GM bondholders).
AGAIN YOU UNDERSTAND NOTHING. Zelaya HAS DONE NOTHING ILLEGAL AT ALL!!!!!! It is the coup plotters that have violated Honduras’ constitution!!!
@GSM; Could not agreee more. GS is in charge these days. What would be the easiest and most legal way to shut down Goldman Sachs? please continue your observations on GS..
a,speaking of culture wars.. check this out..Todd Snider-”Conservative Christian, Right-wing Republican”http://www.youtube.com/watch?v=DVkPKIo2Kew.what do you think?
I have read that the USA gov is, however, compelled by USA law to cut off all economic and military aid to Honduras since its gov is no longer legitimate – which Obama has not done.People who are failing to condemn this terrible illegal coup in no uncertain terms are aiding and abetting heinous criminal activity and are either unwittingly supporting the fascists or are willfully complicit. Average Americans have NO IDEA the crucial importance of the past few days and the next few to come!
Did the Honduran Supreme Court rule that the planned referendum was legal or illegal? Is it not their job to uphold the constitution of their country?
Here’s the relevant part of the foreign operations bill:Quote:Sec. 7008. None of the funds appropriated or otherwise made available pursuant to titles III through VI of this Act shall be obligated or expended to finance directly any assistance to the government of any country whose duly elected head of government is deposed by military coup or decree.
God knows I don’t like the agenda of the Obamaneans – but I try to hear what they are aiming at.There cap and trade carbon tax is too extreme, the science behind the decision is too uncertain.The universal health care will only work if its rationed health care that works within a set budget. The open ended BS of promising entitlements at any and all costs is stupid.I don’t see this kind of “pain” in Obi’s thinking. And “pain”/”suffering” was his muses lot. Until Obi steps into that horror chamber his presidency will go down in history as an enormous flop.Further there needs to be population control instituted in this country. Perhaps a one child per family like in China. That would begin to address the issue of sustainability.
Conservative Christian, right wing Republican, straight, white, American male.Gay bashin’, black fearin’, poor fightin’, tree killin’, regioal leaders of salesFrat housin’, keg tappin’, shirt tuckin’, back slappin’ haters of hippies like me.Tree huggin’, peace lovin’, pot smokin’, porn watchin’ lazyass hippies like me.Tree huggin’, love makin’, pro choicen, gay weddin’, widespread diggin’ hippies like me.Skin color-blinded, conspiracy-minded, protestors of corporate greed,We who have nothing and most likely will ‘till we all wind up locked up in jailsBy conservative Christian, right wing Republican, straight, white, American males,.Diamonds and dogs, boys and girls, living together in two separate worldsFollowing leaders of mountains of shame, looking for someone to blame.Diamonds and dogs, boys and girls, living together in two separate worldsFollowing leaders of mountains of shame, looking for someone to blame.I know who I like to blame:Conservative Christian, right wing Republican, straight, white, American males,Soul savin’, flag wavin’, Rush lovin’, land pavin’ personal friends to the QuaylesQuite diligently workin’ so hard to keep the free reins of this DemocracyFrom tree huggin’, peace lovin’, pot smokin’, barefootin’ folk-singin’ hippies like me.Tree huggin’, peace lovin’, pot smokin’, porn watchin’ lazyass hippies like me.One-sidedness is not the answer – no matter whose side is held up to be the “superior” one. This guy has not gotten past the cradle stage in his conscious development. Another “Rush” shock-jock approach to life.
Why President Zelaya’s Actions in Honduras Were Legal and ConstitutionalZelaya attempted to give Hondurans the gift of participatory democracy. It was the coup leaders who violated the constitution. Those who say otherwise are wrong.By Alberto Valiente Thoresen, RebelReports Guest ContributorIn the classic Greek tragedy, Prometheus Bound, the playwright observes: “Of wrath’s disease wise words the healers are.” Shortly put, this story is about Prometheus, a titan who was punished by the almighty gods for having given humanity the capacity to create fire. This generated a conflict, which ended with Prometheus’ banishment and exile.Currently, there is a tragedy being staged in the Central American republic Honduras. Meanwhile, the rest of humanity follows the events, as spectators of an outdated event in Latin America, which could set a very unfortunate undemocratic precedent for the region. In their rage, the almighty gods of Honduran politics have punished an aspiring titan, President Manuel Zelaya, for attempting to give Hondurans the gift of participatory democracy. This generated a constitutional conflict that resulted in president Zelaya’s banishment and exile. In this tragedy, words are once again the healers of enraged minds. If we, the spectators, are not attentive to these words, we risk succumbing intellectually, willfully accepting the facts presented by the angry coup-makers and Honduran gods of politics.In this respect, media coverage of the recent military coup in Honduras is often misleading; even when it is presenting a critical standpoint towards the events. Concentrating on which words are used to characterize the policies conducted by President Zelaya might seem trivial at first sight. But any familiarity to the notion of ‘manufacturing of consent’, and how slight semantic tricks can be used to manipulate public opinion and support, is enough to realize the magnitude of certain omissions. Such oversights rely on the public’s widespread ignorance about some apparently minor legal intricacies in the Honduran Constitution.For example, most reports have stated that Manuel Zelaya was ousted from his country’s presidency after he tried to carry out a non-binding referendum to extend his term in office. But this is not completely accurate. Such presentation of “facts” merely contributes to legitimizing the propaganda, which is being employed by the coup-makers in Honduras to justify their actions. This interpretation is widespread in US-American liberal environments, especially after Secretary of State Hillary Clinton said that the coup is unacceptable, but that “all parties have a responsibility to address the underlying problems that led to [Sunday]’s events.” However, President Zelaya cannot be held responsible for this flagrant violation of the Honduran democratic institutions that he has tried to expand. This is what has actually happened:The Honduran Supreme Court of Justice, Attorney General, National Congress, Armed Forces and Supreme Electoral Tribunal have all falsely accused Manuel Zelaya of attempting a referendum to extend his term in office.According to Honduran law, this attempt would be illegal. Article 239 of the Honduran Constitution clearly states that persons, who have served as presidents, cannot be presidential candidates again. The same article also states that public officials who breach this article, as well as those that help them, directly or indirectly, will automatically lose their immunity and are subject to persecution by law. Additionally, articles 374 and 5 of the Honduran Constitution of 1982 (with amendments of 2005), clearly state that: “it is not possible to reform the Constitution regarding matters about the form of government, presidential periods, re-election and Honduran territory”, and that “reforms to article 374 of this Constitution are not subject to referendum.”Nevertheless, this is far from what President Zelaya attempted to do in Honduras the past Sunday and which the Honduran political/military elites disliked so much. President Zelaya intended to perform a non-binding public consultation, about the conformation of an elected National Constituent Assembly. To do this, he invoked article 5 of the Honduran “Civil Participation Act” of 2006. According to this act, all public functionaries can perform non-binding public consultations to inquire what the population thinks about policy measures. This act was approved by the National Congress and it was not contested by the Supreme Court of Justice, when it was published in the Official Paper of 2006. That is, until the president of the republic employed it in a manner that was not amicable to the interests of the members of these institutions.Furthermore, the Honduran Constitution says nothing against the conformation of an elected National Constituent Assembly, with the mandate to draw up a completely new constitution, which the Honduran public would need to approve. Such a popular participatory process would bypass the current liberal democratic one specified in article 373 of the current constitution, in which the National Congress has to approve with 2/3 of the votes, any reform to the 1982 Constitution, excluding reforms to articles 239 and 374. This means that a perfectly legal National Constituent Assembly would have a greater mandate and fewer limitations than the National Congress, because such a National Constituent Assembly would not be reforming the Constitution, but re-writing it. The National Constituent Assembly’s mandate would come directly from the Honduran people, who would have to approve the new draft for a constitution, unlike constitutional amendments that only need 2/3 of the votes in Congress. This popular constitution would be more democratic and it would contrast with the current 1982 Constitution, which was the product of a context characterized by counter-insurgency policies supported by the US-government, civil façade military governments and undemocratic policies. In opposition to other legal systems in the Central American region that (directly or indirectly) participated in the civil wars of the 1980s, the Honduran one has not been deeply affected by peace agreements and a subsequent reformation of the role played by the Armed Forces.Recalling these observations, we can once again take a look at the widespread assumption that Zelaya was ousted as president after he tried to carry out a non-binding referendum to extend his term in office.The poll was certainly non-binding, and therefore also not subject to prohibition. However it was not a referendum, as such public consultations are generally understood. Even if it had been, the objective was not to extend Zelaya’s term in office. In this sense, it is important to point out that Zelaya’s term concludes in January 2010. In line with article 239 of the Honduran Constitution of 1982, Zelaya is not participating in the presidential elections of November 2009, meaning that he could have not been reelected. Moreover, it is completely uncertain what the probable National Constituent Assembly would have suggested concerning matters of presidential periods and re-elections. These suggestions would have to be approved by all Hondurans and this would have happened at a time when Zelaya would have concluded his term. Likewise, even if the Honduran public had decided that earlier presidents could become presidential candidates again, this disposition would form a part of a completely new constitution. Therefore, it cannot be regarded as an amendment to the 1982 Constitution and it would not be in violation of articles 5, 239 and 374. The National Constituent Assembly, with a mandate from the people, would derogate the previous constitution before approving the new one. The people, not president Zelaya, who by that time would be ex-president Zelaya, would decide.It is evident that the opposition had no legal case against President Zelaya. All they had was speculation about perfectly legal scenarios which they strongly disliked. Otherwise, they could have followed a legal procedure sheltered in article 205 nr. 22 of the 1982 Constitution, which states that public officials that are suspected to violate the law are subject to impeachment by the National Congress. As a result they helplessly unleashed a violent and barbaric preemptive strike, which has threatened civility, democracy and stability in the region.It is fundamental that media channels do not fall into omissions that can delay the return of democracy to Honduras and can weaken the condemnation issued by strong institutions, like the United States government. It is also important that individuals are informed, so that they can have a critical attitude to media reports. Honduras needs democracy back now, and international society can play an important role in achieving this by not engaging in irresponsible oversimplifications.Alberto Valiente Thoresen was born in San Salvador, El Salvador. He currently resides in Norway where he serves on the board of the Norwegian Solidarity Committee with Latin Americahttp://rebelreports.com/post/133319827/why-president-zelayas-actions-in-honduras-were-legal
@GSM: “GS is calling the shots on the US economy through Treasury and the Fed . We have no idea the details of really how they are playing their game… That realm is for the chosen ones- we are not of them.”Here’s a fitting blog comment from weekend dialog regarding Taibbi’s “Wall Street Smackdown” of crime boss, Goldman Sachs:“This depressions is opening people’s eyes, and what do they see? They see that their ruling class is a crime syndicate.”
http://markcrispinmiller.com/2009/07/hard-truths-about-honduras.htmlJohn Gerassi wrote:A passing reflection: No one in the established media is going to point out that no Honduran soldier, officer or general would dare to act against a US request, ever. The Honduran military get trained at a US base 50 miles from Tegucigalpa. The US furnishes its weapons, its uniforms, lunch and travel perks by inviting every officer to come to the School of the Americas for a bit of brainwashing. But the NYTimes makes much ado about integrity, honesty, fairness, etc.Today (June 30), the Times ran an op-ed by Alvaro Vargas Llosa, a “fellow of the Independent Institute.” That op-ed is a tissue of bald lies.Now, everyone has the right to be against Honduras President Manuel Zelaya. But not to reveal that Honduras is run by a tight little oligarchy (which includes its parliament and Supreme Court) which kills labor organizers just for pleasure is to be genuinely dishonest. When I visited the farm of such an oligarch, while reseaching my book The Great Fear in Latin America, I asked him why he paid his peons so little. “They’re pigs,” he answered. “The only thing they respect is power. They have to know that I have life and death power over them. Only then will they work.” Stupidly, I asked: “Do they know that?” He laughed, called over one of the peons, took out his pistol and shot him in the head.When I reported it to the Tegulcipaga chief of police, he quipped: “Yeah, but he owns that estancia.”Now this “fellow” Vargas Llosa writes that President Zelaya is trying to become a dictator like Venezuela’s Hugo Chavez by holding “a referendum with the ultimate aim of allowing him to seek re-election.” You’re supposed to think that the referendum is that change, and that it’s illegal because “the electoral court, the Supreme Court, Congress and members of his own party declared Mr. Zelaya’s intention unlawful.”What Varga Llosa doesn’t tell you –and the Times would never say it either– is that all those bastards are the same as that oligarch who shot the peon just to prove a point. Nor would the Times tell you that that referendum merely put the question: “Hey, folks, should I try to get the constitution changed legally so I can run for re-election?” Nor would the Times tell you that Zelaya ran at first with a reactionary party, but changed on seeing how his country’s oligarchy, in partnership with US businesses, and abetted by the US-created death squad (set up by then- Ambassador Negroponte?), kept his people among the continent’s poorest. His Liberal Party was the party of the oligarchy.Nor would the Times ever run my corrections, even if written politely without such insulting words as “bastard.” It never has. Because it believes in integrity, honesty, fairness, etc.
The majority of Americans already fully support single-payer healthcare…a fact that would be recognized if not for the obfuscations, omissions, and lies told by the propaganda ministry known as the corporate-owned and CIA compliant “mainsteam” media.
m,you make a good point and is like his point as expressedin the lyric.for some reason people gather to hear other peopleperform, address a larger group with an idea, sentimentor agenda of some sort. people then leave and go on theirway having been altered in some way. “another county heardfrom” so to speak.what i like about this guy is he is honest and i thinkcapable of self deprecating humor, humility, which i think isthe point. it may not be the end all of consciousness developmentbut as you say it is the cradle, the true cradle, and thecorrect starting point for further development.or..i just think he is funny and entertaining. unlike “rush” whoi find to be phony and mean spirited with his humor and franklyi don’t really ever want to hear him speak another public wordas long as i live. with all the air time wasted by that manand his b.s. the world could have been educated to the nature ofman and the world we live in had an intelligent force beeninvolved in the programing.todd snider on the other hand has received, in comparison, exactly zero air time in the mainstream media, for what i think areobvious reasons. the first being he is honest and we all knowwhere that might lead. understanding. very dangerous.
Your thirst for sadism and masochism disguised as ‘necessity’ are too creepy for words. I seriously think you need professional help.
They see their ruling class is a crime syndicate, and yet they STILL believe in HAVING a ruling class! It’s beyond hilarious how GULLIBLE people are! Blind, blind, and blind, they suffer and suffer and suffer completely needlessly and STILL will not even entertain the idea of not allowing a ruling class to exist!
Everyone with at least two brain cells to rub together seems to agree that the rich have too much money and therefore power to influence how everybody on the globe lives out the limited hours they have, and consequently the poor have too little of both money, and power over their own lives and opportunities and options, but how shall we know what amount is the right amount for anybody to have? How do we know where to draw the line and say ‘this much and no more is a rightful share of wealth and power’? Should it simply be a matter of all you can get is yours, or should an amount be calculated contingent upon, say, how much work an individual does?
see the photos from Honduras in this thread:Why Honduras Mattersthere are 8 pages of facts and analysis there, and lots of links on Honduras, so read away if you want the real story and not the effing propaganda.
It should be a balance that requires regular weighing, no one ideology can function on its own, the greed motive has obviously been a complete disaster so get rid of the old thinkers but the problem is that they’re still in power and it takes awhile, socialism has its inherent flaws too so the new system must be dynamic, understanding that like in nature for every one tree cut down one should be replaced or two or three or maybe none depending on the environment and variables. The point is to get away from ideology and replace it with concern for the whole which may include concern for the individual but as a byproduct.
Population control? No, we need quite the opposite. We need young workers to support the older ones.
Who said that race doesn’t matter, to the racists? This “white guy” (as Hispanics would call him) is just a dumb, guitar-totin’ hay seed paid by the racist industry to demonize white Americans and the Christian principles on which the nation was founded. This is the mantra that accompanies an “open” border policy by races who came to take, not to assimilate.Get used to it. Obama and his cabinet are pushing America into a final battle to sever the European head from her body politic—Diversity versus Unity. And the majority minorities of the Third World intend to win it.If Todd Snider is right about whites, how did a black man, a Kenyan, get elected “president” in the America he thinks exists? The rap song is racist, of course, and I reject the sophomoric position that criticizing racism is racistJudge Sonia Sotomayor, Obama’s pick for the United States Supreme Court, is a member of the National Council of La Raza. La Raza means “the Race.” THE race, of course, is her Latino race—primarly Hispanics, and especially Latinos from Cuba, Mexico, Puerto Rico, or South or Central America.The legitimate criticism of Sotomayor is because of her racist remarks. Sotomayor’s the Latina who prioritizes her race: “I would hope that a wise Latina woman with the richness of her experience would more often than not reach a better conclusion than a white male who hasn’t lived that life.” That (as Time Magazine called it on the front cover with her picture) is Latina Justice. Get used to it.
http://www.usdebtclock.org/Captivating – like watching an accident in slow motion. Or fast motion depending upon how you personally relste to time.
GSM:I generally enjoy reading your posts and agree with the gist of much of what you say. I don’t agree, however, with your characterization that those who seek public office are, ipso facto, doing so for their own personal aggrandizement, or that President Obama was so motivated.Your broad and bombastic generalizations here — a vain attempt to cram through a simplistic black and white filter what is in reality a diverse spectrum of politics, economics, government, and human nature — tend to suggest you to be no different than the so-called “sheeple” you deride. You’re more astute, it seems to me, than this post comes across. Your posts are more compelling when you are less adamant and more circumspect in your evaluation of what is versus what you suspect to be true.There is no question that the financial industry, and Goldman Sachs in particular, has had, and continues to have, an undue influence on politics and government. There’s a lot more to the problem, though, than pointing the finger at Goldman Sachs (or the President) and saying, “Ah-ha! There’s the culprit!” It’s apparent you understand this is a systemic problem that we need to tackle.SWK
Those involved in the forcible exile of the President of Honduras acted contrary to the constitution of that country. If the bondholders of GM think the President of the United States has acted illegally or unconstitutionally, Guest, then they can sue him, and if they are right, they’ll get relief in the courts. You apparently have no appreciation for the rule of law or how your own system of government works.SWK
You miss the point, Guest. That wasn’t the problem. The problem was that the military summarily and forcibly ejected the President from the country, and they had no constitutional authority to do that. It would be as if the Joint Chiefs of Staff decided something President Obama did was wrong and seized him and dropped him off in Argentina. I’d suggest you go watch the Kirk Douglas/Burt Lancaster film from 1964, “Seven Days in May,” then come back and let us know if you think that’s the way things should be.SWK
Say the Twin Towers were imploded with explosives and it’s a crazy conspiracy theory.Say the ruling class is a crime syndicate and it’s <head nod> <head nod> <head nod>.
Great. Looks like good research on its face. This does not, of course, require that the U.S. cut off diplomatic ties and close its Embassy in Honduras.What makes you think the President has violated the provision you cited? Given that the President has condemned publicly the forced exile of the duly elected Honduran President as illegal, why do you believe the Administration is continuing to obligate or expend to finance directly any assistance to the current illegal government of Honduras?SWK
Green shoots of what? Hopefully not another fast growing contagion weed.The BO financial team is just a repackaged GB team. When will American learn that repackaging is a zero sum game. It must return to turn inovation in manufacturing and discoveries. No more inovation in packaging or financing.Reality reset: WFC take over of WaMu. Retention bonus of $1 million plus was turned down. Now, he accepts a $60,000 package because of the job market. IMHO, the salary and bonus were raping the public trust.
Did I hear correctly – Baker says Obama, (frequently compared with Franklin Roosevelt), “so far…most resembles the other president who had to confront that crisis [the Depression], Herbert Hoover”?So. The liberals are now trying to distance Obama’s FDR policies from FDR!For somebody who thinks Obama is the “only adult in the room,” and knowing what I know of what liberals think of Hoover (they despise him), Baker, ie., Harper’s, is simply foisting Obama’s corroding image off onto Hoover so as to hide the real truth of the failed Keynesian polices of their tarnished economic hero, New Dealer FDR. The truth is, the policies of both Hoover and FDR failed.Speaking of liberals rewriting their own liberal revisionist history, Baker is a revisionist pro in the making. Listen to this: “Hoover—like Obama—was almost certainly someone gifted with more intelligence, a better education, and a greater range of life experience than FDR…and yet he failed.” Oh, sob!Excuse me a minute, I’m going to be sick…Continuing on…This week, I took a swing around our local auto mall where four giant dealerships were shut–large parking lots, ghostly empty, weeds starting between the asphalt cracks, waste paper scuttling across in the wind. In the thirties, Democrats would have called this spot a Hooverville. Likewise, today’s FDR worshipers intend to write this Obamaville off as, just another Hooverville.Barack Hoover Obama, indeed!
OR,Welcome back.Curious what you hear about the following from your home country.Explosion in Argentina Pandemic H1N1 FatalitiesThe Swine Flu seems to have begun mutating some more.
No Logan’s Run for me.I watched Pete Peterson, the former CEO of BLACKSTONE, on Charlie Rose recently. The budget business for health care was his notion for how to have a universal health care coverage. Pete is also concerned that we are headed towards NATIONAL INSOLVENCY.A conversation Peter Peterson 3 July 2009Pete has donated $1 Billion to a foundation to study our nations problems and try to come up with independent solutions.
Greetings OR. VERY glad to hear from you. I don’t want to brag about how dumb I am, so I won’t send along any of my opinions. Suffice to say, at the moment, I’m losing money.
Me too:-) But about 4% return YTD. I have been as high as 7+% and as low as -14% at the march low.
NYSE Halts TransparencyIn a move set to infuriate and send many Zero Hedge readers over the top, the NYSE has taken action to make sure that nobody will henceforth be able to keep track of the complete dominance that Goldman Sachs exerts over the New York Stock Exchange. This basically ends our weekly Program Trading updates disclosed every Thursday indicating that Goldman has singlehandedly captured all of NYSE’s program trading.In an information memorandum released on June 24 (09-31), the NYSE Regulation team has announced the Decommissioning of the Daily Program Trading Report (DPTR).http://zerohedge.blogspot.com/2009/06/nyse-halts-transparency-feels-goldman.htmlHow can the NYSE do this? Wouldn’t this be illegal?? What can be done about it?
Great presentation- cover all aspects of the current ecconomy and where risk lies ahead..http://www.moremortgagemeltdown.com/download/pdf/T2_Partners_presentation_on_the_mortgage_crisis.pdf
be patient for market sentiment…I believe the S & P 500 will fall 10 to 20%
Gu,If Castro & Chavez are upset then I am for the overthrow & Obi ought to be also.Honduras at the Tipping Point
Honduras at the Tipping PointScrew Castro, Chavez and Jimmy Carter.
http://www.bloomberg.com/apps/news?pid=20601009&sid=aOkZK5Ra6XDI“Federal Reserve bought $7 billion in government securities”? man, where they come up with 7Billion to Treasury debt?
Is this the Pete Peterson you refer to, Morbid? This is who you believe would tell you the truth??fairness and accuracy in reporting dot orgA Crusader in CloverPete Peterson, Enemy of Social Security, Counts Journalists as FriendsBy John L. HessWhere does the man find the time to earn all that money? You can’t turn on the tube but there’s Peter G. Peterson, telling some awestruck talking head that Social Security and Medicare are gobbling up our kiddies’ porridge. Or he’s writing it on your favorite op-ed page, or in magazines, or relaying the message through a thousand media converts. Or he’s presiding over the Council on Foreign Relations or the Concord Coalition, or gracing the society page in a dinner jacket, at all the really important social functions, sometimes as host. Or you can find him more informally at Sunday brunch in the Hamptons, with such useful tablemates as Diane Sawyer, Mort Zuckerman, Leslie Stahl, Peter Jennings, Barbara Walters and so on.Vanity Fair (8/93) called on the great crusader at his spectacular beachside retreat in 1993 for an admiring profile. It said the interview was interrupted by telephone calls arranging the appointment of Leslie Gelb (ex-New York Times) as president of the Council on Foreign Relations, and of James Hoge (ex-New York Daily News) as editor of the organization’s journal. Peterson made another call inviting former Sen. Warren Rudman (R.-N.H.) to join the board of the Robert Wood Johnson Foundation, a health-policy appendage of the great health supply company Johnson & Johnson (of which Peterson’s third wife is a director).Peterson told Vanity Fair he was writing about health policy at that very moment, for his second book, Facing Up: How to Rescue the American Economy From Crushing Debt and Restore the American Dream. That would be the chapter that said: “The issue isn’t whether these new [universal health] benefits would be nice to have. They would. The issue is whether we can afford it. We can’t.”That’s our boy. His remark lends piquancy to his wife’s explanation that her husband needed his $2.5 million, $1,500-an-hour helicopter to safeguard his health.The question is not whether this kind of healthcare is nice. It is. The question is whether he can afford it. He can.While he is reticent about his income, Vanity Fair put his take-home in 1992 at $7 million, not an excessive sum for an investment banker of his rank. His partner Stephen Schwartzman, who is regarded in the financial press as the sparkplug of their firm, the Blackstone Group, said that year that investors in its venture fund should expect returns of 25 to 30 percent during the 1990s—again, not unreasonable, since the Dow Jones average rose more than 26 percent last year.Such rates of return are, again, piquant, because Peterson has described the indexation of Social Security, which lately has raised benefits by roughly 3 percent a year, as “one of the greatest fiscal tragedies of American history.” Piquant? Wait. Peterson was at President Nixon’s side as his economic adviser and secretary of commerce when that “tragedy” was enacted in 1972. (Conservatives thought making the cost-of-living adjustment automatic would deter Congress from voting more generous benefits.)Peterson denounces the “mad, drunken bash” of the Reagan years. That would be the time when the top income-tax rate was cut from 70 percent to 28 percent, military spending went sky-high, and trillions were made (and lost) on savings and loans and takeovers financed by junk bonds. He was himself, of course, making out like a bandit, hustling for his share of the action, and contributing his bit to Republican campaign funds. He also led a chorus of corporate executives who keened about the exploding federal deficit. His contribution was a key series of articles in the New York Review of Books in 1982 (12/2/82, 12/16/82) that prepared the intellectual climate for the 1983 Social Security “rescue,” which raised payroll taxes and lowered benefits.The series purported to prove with mathematical certainty that the entitlements of the elderly were snatching food from babies and driving the nation toward bankruptcy. George Will called it “the most important journalism of 1982.” (Washington Post, 12/19/82). Its charts persuaded such liberals as Tom Wicker and Anthony Lewis. Leslie Stahl of ABC said Peterson “really began to educate me.” (She has since repaid the favor with appearances by her mentor on 60 Minutes.)All the journalists he met seemed impressed by his expertise, and by his generosity in offering to surrender his own entitlements. It does not seem to have occurred to any of his interviewers that a rise of 1 percentage point in his income tax rate would cost him perhaps twice as much as his Social Security and Medicare benefits combined. Nor have any observed how policies he has supported have transferred the tax burden from the wealthy to the wage earner. Indeed, in Facing Up, Peterson remarks with pleased surprise that nobody had clamored for a cut in the Social Security payroll tax to match cuts in benefits.If opinion-makers consider Peterson an expert on finance, experts on finance tend to consider him more of an opinion-maker. Ken Auletta’s book Greed and Glory, about the near collapse of Lehman Brothers in the 1980s, describes Peterson as, in the eyes of his partners, an arrogant bungler dying to make killings in leveraged buyouts, an obsessed reactionary, a name-dropping snob and, all told, so much a pill that his partners paid him $18 million to get rid of him.Now to return to the question with which we began: How does Peterson find the time to make all that money? It would seem to be the new-fashioned way of tapping the gusher of wealth flowing from the economy. Peterson took his severance pay to Schwartzman and formed the Blackstone Group, which played the arbitrage game, bought up failing companies, shopped the savings-and-loan auctions, and made money.A towboat operated by one of their subsidiaries and piloted by a man who had flunked his licensing exam seven out of eight times hit a railroad bridge and caused 47 deaths. Another Blackstone company drilled a hole in the Chicago River and caused that city’s costliest disaster since the Great Fire. A major partner resigned last October under the cloud of an ugly scandal alleging fraud.These things happen. Peterson is a busy man. Journalists may be forgiven for not connecting him with these misfortunes, or even knowing about them. What is not forgivable is their swallowing his ideological book, line and sinker.
Ask an American Indian which race came to their lands to take EVERYTHING and murder the first peoples and not assimilate before you post another idiotic racist screed, 10:53.
Job losses – a misinterpretation?I think there is a tendency to see the recent lessening of job losses (bar the last month) as a sign that the economy is in a “W”-shaped recession. However, underlying this view is actually an implicit “V”-shaped model of recessions that individuals use as a template. Let me explain. Most people see recessions as reaching some sort of trough based on indicators such as job losses and then beginning to recover. So the recent data have led those who hope for a “V” to talk about “green shoots” and others to put forward the “W”. However just suppose that the catastrophic results in the labour market a few months ago were not the worst point of the recession (in terms of the rate of decline) but simply the fall-out in the labour market from the near financial collapse (with a few months lag). Only if one believes that the financial crisis represented the worst point in the recession would one be justified in saying the worst is over. But what if the near financial collapse was a particular phase of the current crisis, sort of a flare-up which was contained for the time being, without putting out the fire? That is what I think. In fact one can argue that this recession has far further to go, likely with deeper plunges in the labour market than we have already seen. I suppose it is hard for people to get their heads around the idea that the economy could fall faster than it did in Q1 2009 but look again. In particular the housing market continues to fall with both record foreclosures and record numbers of properties in foreclosure ending up with the banks and the carnage has spread to commercial real estate, where asset prices are also falling rapidly. On top of this the savings rate is now skyrocketing, a likely response to collapsing asset values. Throw in a highly leveraged financial sector into this mix and the result is a vicious downward spiral. This highlights that the real cause on the crisis is falling asset values and neither Fed policy nor counter-cyclical fiscal policy can stabilise asset prices.
832 words of pure disinformation. Amazing.And you swallowed it hook, line, and sinker. Fool. Tool.I notice you make no comment on any the vast information provided that puts the lie to everything O’Grady said, so I can only assume you are willfully refusing to consult the facts in order to stick with your bias for the lies that are getting people killed. Nice.
I see the shape of a stairstep – going DOWN. |_|_|_
sorry my attempt at creating the shape didn’t work, but you get the picture…
Your beloved Mrs O’Grady is lying through her teeth, but thanks for revealing that all you are doing is having a mindless infantile kneejerk reaction and simply repeating utter garbage that fits with that barking mass of misconceptions you call a worldview.”Me be against anything Chavez is for” is just priceless no-think.
Well ,yes Morbid:There are many optional ways of paying for/operating health care.You have the example in Canada where each Canadian State has for 60 years a Private/Public Partnership with the State Medical Association,whereby the Doctors remain Private Sector and bill the State Govt for a prearranged “FEE FOR SERVICE”similar to what your Private Insurers agree to pay.So yes there is a form of rationing in effect,but you will notice that the overall costs at the moment are 30% LESS than your “EFFICENT PRIVATE SYSTEM”.Looking at your system from a distance,it appears you can easily protect everyone at a much reduced cost if you really wanted to.By the way the Medical People like the state run option ,where the accountability is “LOCAL”and the Medical Profession has real input into the the decision making at the State level.This is the opposite from the Cuban and British Systems where the Doctors all work for thew Federal Govt on the basis of Paychecks .At the end of the day Canada has 14 similar state run systems.Unfortunatly the propoganda level is so high from the various U S private interests involved, it is hard to see the forest for the trees….
kilgores, they haven’t announced any cutoff of aid yet, when the law requires it. And it will be Hillary’s job tomorrow to play like Zelaya needs to NEGOTIATE WITH THE COUP PERPS – LIKE THAT WOULD BE A REASONABLE THING!This is down and dirty deep politics and class warfare on steroids, and the usa will do all it can to diminish Zelaya’s ability to govern in favor of some of the poorest people in the world!No money must actually be redistributed in the opposite direction from where it has been funnelling – from poor to rich – oh no – we can’t have THAT re-distribution catching on!CASCADES OF LOVE AND SUPPORT TO THE VERY BRAVE AND NOBLE HONDURAN PEOPLE FIGHTING THE OLIGARCHS AND THEIR WATER CARRIERS WITH NON-VIOLENCE, DETERMINATION, AND THEIR LIVES!
Thanks, MM CA, it is a good presentation; sharing things like that is one of the great things about this blog!
Hate to say i agree with you Alex. Each reaction/fix/bailout/ allowed the PTB to live to fight another day. All of it has been nothing by temporary fixes to stop a total collapse. Watch the debt and unfunded liabilities… when they can no longer serice it thatis when the collapse will occur. i suppose it is possible they could float the interest on the debt to the tune of 2 trillion or so but not much more. We are at about 750 Billion annually now and rising quickly. ther eis the other side that says let it go no, Do the RESET and move on.
Gu:The law doesn’t require any announcement about cutting off aid, so it’s misplaced to suggest that the Obama administration has broken the law unless you can point to an actual direct expenditure. I really think you’re reading the administration’s intentions through a very odd-colored pair of spectacles. You can try to interpret every event in the world as a clash of classes, but frankly, that’s just unduly simplistic. If the U.S. wanted Zelaya out, then the administration would have had no comment on his ouster.SWK
I have to agree with Gu, here. Audits are not called for in every election, and I fail to understand what the basis for requesting an audit of the Venezuelan referendum would be. Jimmy Carter is a man of great personal integrity and wisdom, and it is wholly unfair to cast him in the same light as Castro and Chavez.SWK
Oh, but please don’t take that to mean that I endorse Gu’s name-calling and personal invectives, which is unnecessary and counterproductive.SWK
http://informationclearinghouse.info/article22989.htmA Few Facts About the Honduran Military CoupBy Ken SilversteinJuly 06, 2009 “Harpers Magazine” –1. There’s very little truth to anything you’ve read about the coup in American newspapers.2. President Manuel Zelaya is no radical. He approved a big minimum wage increase, which was desperately needed in a country where so many workers are poor, but he otherwise has been a very cautious, ineffectual reformer. The intensity of the reaction against him by the Honduran elite — as seen in the coup — reflects the feuadal mentality of the traditional economic and political leadership, not Zelaya’s politics.3. Zelaya was not seeking to stay in power by unconstitutional means; even if his political reforms had succeeded, he would have been out of power within the year. The only side guilty of unconstitutional action is the coup plotters.4. Based on his response to events in Honduras, Barack Obama may as well be Ronald Reagan or George Bush when it comes to coups in Latin America. The Obama administration initially managed to muster “concern” about the coup, and has been acting in a cowardly fashion ever since. The only reason it has moved at all was that it was forced by the united front by Latin governments of left and right. If Zelaya is returned to power, it won’t be because of anything Obama did.5. The American media does not believe in democracy, as seen in the routine portrayal of a [moral equivalence between the elected government and the coup plotters]. The Washington Post is the worst of the pack. For its editorial page, “democracy” is strictly utilitarian; it’s OK when our side wins; otherwise, we will justify vote-rigging or military action by the other side, even while pretending we support constitutional order.
I also share your concerns. While there has been much talk about “Green Shoots” and economic recover, we still see nothing but a global economy in contraction. While the government, the investment community and the media like to put the spin on that things are improving, the reality, is that things are getting less bad than they were six months ago. All that has happened is that the rate of deterioration has slowed down.There is talk of V shaped recoveries and W shaped recoveries but frankly, I think an italic “I” viewed in a mirror best describes events. The only evidence of the V is in global stock markets and the markets for various commodities. Stocks are better based on the eternal optimism of most human beings, and commodities by the ongoing hoarding by the Chinese government. These two shall pass and the bulls will be forced to talk about an eventual W recovery.
Yep, that’s him.I love his approach on these issues. This cradle-to-grave, liberal, Bamelot wet dream, compassion card playing, vote getting of all the poor is just crap.What country do you hail from Gu – 3rd world? I guess the USA will be joining the OAS soon with our banana republic making ObamaNation agenda.
Malignant optimism.Of course the gang of scammers would try and sell us on a V.
You can’t do anything until you get a Congress and president that represents the folks on Main Street rather than the bankers on Wall Street. If representation of the people by the people and for the people can’t be achieved via the ballot box, it will have to be achieved through revolution, a la Thomas Jefferson.In the meantime, distrust of the markets will continue to reduce investor participation until the international investment bankers are left cheating only themselves. At the same time, corruption is precipitating an economic crash that’s going to shake America’s financial timbers so violently it will awaken the people.Of course there is nothing wrong with trying to preserve one’s capital during these times, but remember Henry Hazlitt’s words: “There is no safe hedge against inflation except to stop it.” The same can be said about corruption.As G. Edward Griffin put it in his “Second Look at the Fed”: Americans have allowed their nation to be stolen from right under their noses because they did not understand what was happening.”But now, with whistleblowers and statesmen and investigative reporters such as Matt Taibbi and Tyler Durden and Nouriel Roubini and Ron Paul, Americans are becoming informed. Remember, the power to reverse the present trend is in the hands of just 435 United States representatives and 100 United States senators.Says Griffin: “We can overthrow the government of the United States every two years without firing a shot!” Should it be that government is so entrenched that we cannot, then the America that I know will once again fire that shot still heard round the world.Either way, it’s time to get going. Why stand we here idle? The Taibbis, the Durdens, the Pauls, the Roubinis, and so many more, already are in the field.
What also bankrupts America is that 60% of the people get more from the government than they put in.As Jean Jaures said in “Studies in Socialism (1902)”: There is only one sovereign method for the achievement of Socialism–winning of a legal majority.”And, by Gad, I believe they’ve got it. They’re right now voting themselves the entire U.S. Treasury, what’s left after Goldman gets through, that is. But no problem. Bernanke can always print more.
We also blew it on Biden.
SWK, I believe I said that when I suggested that someone else write an equally convincing essay taking the opposite point of view. Then we can sort out the facts better. Reading this particular essay was kind of like eating pancakes with lots of maple syrup. It goes down great, but afterwords I am a little woozy when I stand up from the table.
Well, not to be totally personal, but inflation’s already “kicked in” at my house. You know, just on the small things, like my annual budget for gasoline, for heating oil, for utilities, for water (in California where I live we get more annual price increases from CalAm than we do monthly water bills), Blue Cross (peanuts of course if they grow peanuts as large as coconuts), house and car and umbrella insurance… but no deflation yet on my deflating property’s property tax bill (oh, yes, I’ve applied), and don’t get me going on lunch. And to top it off, Jack-in-the-Box just raised my dog’s $1.00 Junior Bacon Cheeseburger to $1.09. In my checkbook, that’s 9%, but what can you say to a dog whose haircut costs $90.00 every three weeks?
Alarmist, I think you’ve got it. Let’s publish!
Since Honduras does not produce oil or is about to obtain nuclear weapons, it is a low priority non-event for the USA and the rest of the world, unfortunately.
Crabtree & Evelyn Boutiques file for bankruptcy–oh, no! Really upsets me to learn that. Had no inkling.
http://benfrank.net/patriots/news/national/pentagon_missing_trillions.Rumsfeld Sept 10, 2001: The Pentagon cannot account for $2.3 TRILLIONCBS NEWS: The War on Waste..and other vintage reports of waste.
So, sorry Grandma, but that bypass you need, well…you’re not worth it…you are used up, no longer of productive use to society (i.e. you are no longer producing anything tangible or profitable for the economy) & we have nothing more we can materially gain from your existence. Would you be so eager if it was your Grandmother, wife or child? The people who want to ration health care should have to be the ones to deliver the bad news to those affected. Only a problem for the non-sociopaths amongst us. Perhaps that could be a growth industry Morbid. You could start a company employing sociopaths to deliver the bad news to the unqualified, maybe have an unplugging service as an add-on and up-sell funeral services. Hey! I see green shoots! Soy-lent green, but they are still green.
Dedicated to MM CA above for reporting on July 4 Bank Failure #46 for 2009.THE GREAT DUCK DINNER by G. Edward Griffin (author of “The Creature from Jekyll Island”How Federal-Reserve policies led to the crash of 1929The story is told of a New England farmer with a small pond in his pasture. Each summer, a group of wild ducks would frequent that pond but, try as he would, the farmer could never catch one. No matter how early in the morning he approached, or how carefully he constructed a blind, or what kind of duck call he tried, somehow those crafty birds sensed the danger and managed to be out of range. Of course, when fall arrived, the ducks headed South, and the farmer’s craving for a duck dinner only intensified.Then he got an idea. Early in the spring, he started scattering corn along the edge of the pond. The ducks liked the corn and, since it was always there, they soon gave up dipping and foraging for food of their own. After a while, they became used to the farmer and began to trust him. They could see he was their benefactor and they now walked close to him with no sense of fear. Life was so easy, they forgot how to fly. But that was unimportant, because they were now so fat they couldn’t have gotten off the water even if they tried.Fall came, and the ducks stayed. Winter came, and the pond froze. The farmer built a shelter to keep them warm. The ducks were happy because they didn’t have to fly. And the farmer was especially happy because, each week all winter long, he had a delicious duck dinner.That is the story of America’ Great Depression of the 1930s._______________________________________________The moral of the story, according to Griffin, is that a “managed economy presents men with precisely that kind of opportunity. The power to create and extinguish the nation’s money supply provides unlimited potential for personal gain… It has been used against the public for the personal gain of those who control… There is no better illustration than the Crash of 1929 and the lingering depression that followed.”That said, here is some of the carnage that resulted from that great duck dinner:The credit market is the lifeblood of corporations funding themselves. With the credit markets shut, credit to viable and solvent companies to make their legitimate loan and payroll payments is shut off, forcing them into bankruptcy. The big vulture bankers then pick them up at fire sale prices, using if they wish, bailout money from the taxpayers. Next they buy up or destroy good small banks that seized up indirectly, using monopoly muscle or, again, bailout money from Congress.From the Fed’s start of business in 1914 to 1929, a total of 4500 were forced to close their doors. (H. Parker Willis, economist and First Fed Secretary of the Board 1914-1920)”Likewise, as the economic depression deepened in the early 30s, and as farmers had less and less money to spend in town, banks began to fail at alarming rates. During the 20s, there was an average of 70 banks failing each year nationally. After the crash during the first 10 months of 1930, 744 banks failed – 10 times as many. In all, 9,000 banks failed during the decade of the 30s. By 1933, depositors saw $140 billion disappear through bank failures. (From Farming in the 1930s)It is predicted now that another 1000 or more may fail in the next three to five years. Yet as Professor Roubini noted earlier on this year, 6-8 banks already control about 80 percent of the market …Isn’t it time to make them smaller, not bigger, before we’re all duck soup?
Yve, have you seen this?OBAMA WANTS TO DECIDE WHEN YOU’RE NOT WORTH LIVING ANYMORECharlotte Allen, LA Times – In looking for a way to fund healthcare, Obama has set his eye on the oldest and sickest. You see, according to the Centers for Medicare & Medicaid Services, about 30% of Medicare spending — nearly $100 billion annually — goes to care for patients during their last year of life. What if there were no “last year of life,” the president seems to be asking. The Eskimos used to set their elderly and sickly adrift on the ice or otherwise abandon them during times of scarcity, and that, metaphorically speaking, is what Obama would like us all to start doing.The scarcity of resources to pay for expensive medical procedures will only increase under a plan to extend medical benefits at federal expense to the 47 million Americans who lack health insurance. So why not save billions of dollars by killing off our own unproductive oldsters and terminal patients, or — since we aren’t likely to do that outright in this, the 21st century — why not simply ensure that they die faster by denying them costly medical care? The savings could then subsidize care for the younger and healthier.Sound too draconian? Enter the ghost of Obama’s late maternal grandmother, Madelyn Dunham, who died of cancer at age 86 two days before her grandson’s election to the presidency. Dunham’s health issues first surfaced in a New York Times interview with the president on May 3. There, Obama questioned the appropriateness of a hip replacement that his grandmother had undergone after falling and breaking her hip shortly after being diagnosed with terminal cancer last year. The alternative to such surgery is typically excruciating pain and opiate dependency. Obama made it clear that he loved his granny and would have paid for the surgery out of his own pocket if he had to, but he said there ought to be a “conversation” over whether “sort of in the aggregate, society making those decisions to give my grandmother, or everybody else’s aging grandparents or parents, a hip replacement when they’re terminally ill is a sustainable model.” Obama suggested that such decisions be made not by patients or their relatives but by a “group” of “doctors, scientists, ethicists” who are not part of “normal political channels.”Obama brought up his grandmother’s hip replacement a second time in his June 24 town hall event on healthcare on ABC. The “question was,” Obama said, “does she get hip-replacement surgery, even though she was fragile enough they were not sure how long she would last?” . . .An audience member, Jane Sturm, told the story of her 99-year-old mother, who had initially been turned down for a pacemaker on account of her age. Sturm’s mother persuaded a second physician impressed with her /joie de vivre /to perform the life-extending operation — and she’s still hale today at age 105. “Outside the medical criteria,” Sturm asked, “is there a consideration that can be given for a certain spirit . . . and quality of life?”Nope. “I don’t think that we can make judgments based on people’s spirit,” Obama said. “That would be a pretty subjective decision to be making. I think we have to have rules that we are going to provide good, quality care for all people.”If that sounds cold, or like an interference with the traditional physician-patient relationship, in which doctors make decisions — call them “subjective” decisions, if you like — about the most appropriate care for their patients on an individual basis, that is the very point. Obama and those who support his healthcare reform proposals have embraced a concept called “comparative effectiveness research.” The idea behind comparative effectiveness research is basically a good one: Use large-scale scientific studies to determine which medical procedures produce the best patient outcomes in the aggregate, and whether some expensive tests, drugs and surgeries might not be as effective in the aggregate as cheaper alternatives. . .But Obama and his healthcare supporters do not want to stop there. Their implicit proposal seems to want to turn comparative effectiveness research into the “rules” that Obama was talking about on ABC: one-size-fits-all procedures that physicians would have to follow at the risk of not being paid by the government. . .
from “Microsoft Plans for Worst as U.S. Companies Show No End to Fear”|Bloomberg July 6Feldstein’s TrepidationMartin Feldstein, a member of the private panel that dates the start of recessions and recoveries, said the U.S. economy will grow for a few quarters and then contract again.“We’re going to see a temporary substantial improvement,” Feldstein, the former head of the National Bureau of Economic Research and a Reagan administration adviser who is now a professor of economics at Harvard University, said in a July 1 interview on Bloomberg Radio. “I emphasize the words temporary and substantial.”After the economy shrank at a 5.5 percent annual pace in the first quarter of the year, the change in GDP will be “closer to zero” or “even a small plus” for the April-to- June period, Feldstein said…There are signs that banks are still wary of lending. Financial institutions arranged $38.4 billion in leveraged, or high-yield, loans in the first half, an 80 percent drop from the same period in 2008, according to Bloomberg data. A record $978.5 billion of leveraged loans were made in 2007 as banks competed to finance the largest buyouts ever…http://www.bloomberg.com/apps/news?pid=20601109&sid=a4vtTlqPGqfo
US LURCHING TOWARDS ‘DEBT EXPLOSION’ WITH LONG-TERM INTEREST RATES ON COURSE TO DOUBLE | Telegraph.co.ukThe US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bankBy Philip Aldrick, Banking EditorPublished: 5:44AM BST 06 Jul 2009In a 2003 paper, Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5pc.The impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a “debt explosion”. Mr Laubach’s study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case.Using historical examples for his paper, New Evidence on the Interest Rate Effects of Budget Deficits and Debt, Mr Laubach came to the conclusion that “a percentage point increase in the projected deficit-to-GDP ratio raises the 10-year bond rate expected to prevail five years into the future by 20 to 40 basis points, a typical estimate is about 25 basis points”.The US deficit has blown out from 3pc to 13.5pc in the past year but long-term rates are largely unchanged. Assuming Mr Laubach’s “typical estimate”, long-term rates have to climb 2.5 percentage points.He added: “Similarly, a percentage point increase in the projected debt-to-GDP ratio raises future interest predicting a wide range of ratios but Mr Congdon said it was “not unreasonable” to assume debt doubling to 140pc. At that level, Mr Laubach’s calculations would see long-term rates rise by 3.5 percentage points.The study is damning because Mr Laubach was the Fed’s economist at the time, going on to become its senior economist between 2005 and 2008, when he stepped down. As a result, the doubling in rates is the US central bank’s own prediction.Mr Congdon said the study illustrated the “horrifying” consequences for leading western economies of bailing out their banks and attempting to stimulate markets by cutting taxes and boosting public spending. He said the markets had failed to digest fully the scale of fiscal largesse and said “current gilt yields [public debt] are extraordinary low given the size of deficits”.Should the cost of raising or refinancing public debt in the markets double, “the debt could just explode”, he said, adding that it would come to a head in “five to 10 years”.http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5754447/US-lurching-towards-debt-explosion-with-long-term-interest-rates-on-course-to-double.html
You are corrupted.You are trapped…
i will save you
No thanks. They’ve had their chance. What a mess the old have left behind for the young to clean up.
Single-payer is one of the main drivers for health-care being so expensive in the US, with one of the other major factors being that it is widely available to all who can pay and often free to those who can’t. If people had to pay out of their own pockets for their healthcare, you’d no doubt see a vastly improved system.
So, in 2016, when Big O’s supporters decide he is so valuable that the 22nd amendment should be repealed by referendum, and someone in our Congress decides to have the nerve to ask him to step down, and to then use the military and Secret Service to effect that when he, as a legitimately elected leader, chooses not to, will that also be a Coup?Check your facts, Gu. Just because the OAS and UN, both of which have been such hot-beds of legitimate politics and democracy, say that Honduras is not legitimate, doesn’t necessarily mean that is so.
What’s amazing is how many experts are denying this is the most likely outcome. Thinking that the politicians will let the Fed actually rein in inflation before it raises its ugly head flies in the face of several millenia of experience human nature. We took the easy way out, and we are doomed.
SWK,You Sir, are most naive. You also disregarded my caveat.Look into BO’s early Chicago political background (his 20′s), what radical author did he base his most important political strategies on and incidentally what ARE those strategies? Read up on them.I don’t deride the sheeple- after all to TPTB I myself am a “sheeple” to them.Unlike you SWK, I am prepared to be a realist and if you think that most of your politicians are putting anyone but themselves first by living off of your sweat at the trough , you are in fact more than naive- you are deluding yourself.You choose also to misrepresent my words.I understand fully that this is a systemic problem but unlike you, I am looking at the correct system for the much needed overhauls. This problem is relevant in it’s primacy to the polical system in the US- NOT the financial system. It’s all and only about CONTROL. Whos controls the levers of Gov’t? Politicians or political parties? That is laughable.Unless and until the US people can free themselves and their political process from GS and other Wall St Banksters there is no hope NONE of enacting the change necessary to prevent this kind of occurrance happening again and again.The people of the US are ruled and indeed are servants of the big Banks whether they know or like it- or not. Even the Fed is a “captured” entity.Put your thinking cap on SWK, I’m sure even you will “get it”.
Your confused scenario bears no resemblance whatsoever to the situation in Honduras. If you people don’t care to deal with the facts, why do you bother to comment? Why are you presenting support for anti-democratic forces???????
wow. talk about having it bass-ackwards, Alarmist. the facts all say single-payer is the ONLY way to provide good and affordable healthcare to all.and are you seriously saying if one lives in the house of have-not and gets sick, you want them to be denied healthcare, even to their prematurely-inflicted deaths, just so filthy-rich people like insurance executives can stay rich??
Gu,Do you have some skin in this Honduras game? It seems you think you are the only one who understands what is going on. Some worldview.I agree with The Alarmist – the UN and the OAS – are hardly credible in their activities. They have become irrelevant or should.
GSM:You may find me naïve, but I’ve spend a good deal of time as an attorney in both the public and private sectors, and I believe my perspective to be fairly sound. Moreover, to quote my own post, “There is no question that the financial industry, and Goldman Sachs in particular, has had, and continues to have, an undue influence on politics and government.” I think we are in basic agreement on that point.The notion that society can ever extricate itself completely from the influence of monied interests is a fool’s errand. The best we can hope to do is to modulate those interests through tax policies and other regulatory means to try to create a more level playing field for democratic participation by all citizens without gutting the heart of the free enterprise system.I respect the President and I generally agree with his approach to the problems we face as a nation. I could care less if he developed effective strategies for change from reading so-called radical authors. Many characterized Saul Alinsky as a radical, but he had a very practical approach to seeking changes he believed in.My point for you was only that you come across as a bit too self-righteous. Put THAT in YOUR thinking cap, my friend.SWK
LOL! I just LOVE maple syrup!SWK
LOL! I just LOVE maple syrup!SWK
Sorry – this response to Pecos Banker wound up down here the first time. Still having problems posting to the site.SWK
Suggestion, click the button on the left (Submit) not the button on the right (Cancel).
thank you for the postnow we have an estimate for just how high the interest rates will go
NSA Shields Government Networks With More AT&T Secret Roomshttp://www.wired.com/threatlevel/2009/07/einstein
UK weapons inspector who was found dead was writing expose: paperhttp://rawstory.com/08/news/2009/07/06/uk-weapons-inspector-dead-expose/
so now the wealthier people are going to become the baddies???Plan floated to target individual carbon emittershttp://rawstory.com/08/afp/2009/07/06/plan-floated-to-target-individual-carbon-emitters/
US researchers have proposed a new strategy to tackle the global climate dilemma: target the biggest polluters in a country, who also tend to be the wealthiest individuals.Under the framework, a universal cap — rather than different caps for different countries — would be placed on carbon emissions and countries would then be tasked with getting individuals living beyond that cap to reduce their carbon footprint.“Most of the world’s emissions come disproportionately from the wealthy citizens of the world, irrespective of their nationality,” said lead author Shoibal Chakravarty, a research scholar at the Princeton Environmental Institute…
@ all the posts on California-thanks for the info and insightsplease keep us postedperhaps the Obama Administration will offer a one time emergency loan to California (and all of the states)?…out of the first stimulus package…and from an emergency second stimulus? with the provision that cutting their budget will be necessary
“The bank [GS] has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public yesterday.Smoking gun. But since they control everything, what can be done?
Can anyone tell me one segemnt of our economy/finanacila system that is not broke and not on life support? Bankruptcies are surging, foreclosures are surging, auto repo’s are surging, and on and on…so who has some good news today?Credit Card And Home Equity Delinquencies Break RecordsMore non-green shoots courtesy of the American Bankers Association.Reuters: Fallout from a still deteriorating housing market caused the rate of consumer loan payments at least 30 days late to rise to 3.23 percent in the January-to-March period from 3.22 percent in the 2008 fourth quarter, the American Bankers Association said.Delinquencies were the highest since the ABA began tracking the data in 1974. Late payments on home equity borrowings set records, rising to 3.52 percent from 3.03 percent on loans and to 1.89 percent from 1.46 percent on lines of credit.Credit card delinquencies also broke a record, with delinquencies jumping to 6.6% — a number that understates the severity of the problem since, as Reuters notes, it doesn’t take into account bank-issued cards.What’s the problem? NO Jobs, NO jobs, NO jobs!!!!http://www.businessinsider.com/credit-card-and-home-equity-delinquencies-break-records-2009-7
I luv this line “The recent signs of stabilization are the “mother of all head fakes.”The Mortgage Collapse…Henry Blodget|Jul. 7, 2009, 9:14 AM|1http://www.businessinsider.com/henry-blodget-and-now-a-brief-update-on-the-mortgage-collapse-2009-7Whitney Tilson (right) and Glenn Tongue of T2 Partners have updated and expanded their excellent presentation on the housing and mortgage markets.We walked through their conclusions on the housing side yesterday.Here’s the bottom line on the mortgage side:We are in the “middle innings” of the mortgage and foreclosure crisisBanks have taken less than half of the losses they’ll ultimately have to recognize on all those crappy loans.Subprime is old news, but deliquencies on Alt-As, Option ARMs, Prime, Jumbo Prime, and HELOCs (Home Equity Lines Of Credit) are soaringMortgage mods aren’t workingForeclosures will continue to soar, especially as a new wave of Alt-A mortgage resets begins to hit later this year.The recent signs of stabilization are the “mother of all head fakes.”We’ve summarized mortgage portion of T2′s presentation in the slides that follow. You can download the whole presentation yourself here (PDF), or scroll through it here.START >And don’t miss T2′s update on the housing-market collapse. Plenty of downside to go!
Goldman May Lose Millions From Ex-Worker’s Code Theft (Update1)By David Glovin, Christine Harper and Saijel KishanJuly 7 (Bloomberg) — Goldman Sachs Group Inc. may lose its investment in a proprietary trading code and millions of dollars from increased competition if software allegedly stolen by a former employee gets into the wrong hands, a prosecutor said.Sergey Aleynikov, an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading software. Teza Technologies LLC, a Chicago-based firm co-founded by a former Citadel Investment Group LLC trader, said it suspended Aleynikov, who started there on July 2.At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov’s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public yesterday. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”‘Preposterous’The prosecutor added, “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.”The proprietary code lets the firm do “sophisticated, high- speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.Defense attorney Sabrina Shroff said in court that the government’s allegations are “preposterous.” The firm was aware that Aleynikov, who is the father of three young girls, was downloading programs to his personal computer to do work at home and that he hasn’t disseminated the code, the lawyer said.“If Goldman Sachs cannot possibly protect this kind of proprietary information that the government wants you to think is worth the entire United States market, one has to question how they plan to accommodate every other breach,” she said.Michael DuVally, a spokesman for Goldman Sachs in New York, declined to comment.$750,000 BailU.S. Magistrate Judge Mark Fox ordered Aleynikov, who earned $400,000 a year, to be held on $750,000 bail, after prosecutors claimed he posed a threat to the community. Aleynikov planned to earn three times his salary by joining a startup company and engaging in high-volume automated trading, prosecutors said. Aleynikov posted bail yesterday and was released.Aleynikov didn’t speak at the hearing, except to say that he understood the conditions of his bail.Teza, co-founded by former Citadel trader Misha Malyshev, said in an e-mailed statement that it first learned of the allegations on July 5 and suspended Aleynikov without pay following an investigation.The firm “was not aware of the alleged misconduct” and offered to cooperate with the government, according to the statement.Reverse Engineering“Someone stealing that code is basically stealing the way that Goldman Sachs makes money in the equity marketplace,” said Larry Tabb, founder of TABB Group, a financial-market research and advisory firm. “The more sophisticated market makers — and Goldman is one of them — spend significant amounts of money developing software that’s extremely fast and can analyze different execution strategies so they can be the first one to make a decision.”Someone could use the code “to implement the same strategies and maybe on certain stocks they can be faster and, in effect, take away money that would normally be Goldman’s,” Tabb said in a phone interview. “The second thing that they can do is actually analyze the code so that they know what Goldman’s going to do before Goldman does it and kind of reverse engineer Goldman’s strategies and make money basically at the expense of Goldman.”‘Wake-Up Call’Harvey Pitt, former chairman of the U.S. Securities and Exchange Commission, said proprietary electronic data poses significant risks for all financial institutions.“This is a wake-up call to all financial institutions to review their security systems, not just with respect to trading codes, but with respect to all proprietary information,” said Pitt, now chief executive officer of Kalorama Partners LLC in Washington.Goldman appeared to have taken some steps to prevent the theft of its code, Pitt said. “The real question is whether, in light of this outrageous conduct on the part of one of its employees, it should have taken more steps,” Pitt said.Aleynikov spent four hours with a Federal Bureau of Investigation agent after his July 3 arrest, Shroff said. He told the agent that he’d done nothing wrong, authorized prosecutors to seize his personal computers, and said he hadn’t known the server he was using was in Germany, she said.32 MegabitsOnly 32 of 1,024 megabits of the software code was transferred, Shroff said.“It is not disseminated,” she said of the code.Facciponti said at the hearing that Aleynikov could disseminate the code “in 10 minutes” using a cell phone. Once the government obtains access to the German server, prosecutors will see if Aleynikov transferred other confidential data as well, he said. It’s logical to conclude that Aleynikov planned to use the code at his new company, the prosecutor said.“This is the most substantial theft that the bank can remember ever happening to it, in the sense the entire platform has been taken from it,” Facciponti said. “There has been no breaches anywhere on this magnitude at the bank.”Aleynikov worked at Goldman from 2007 until June, the government said in the complaint. He was part of a team of workers responsible for improving the computer platform. His alleged transfer of computer codes ran from June 1 to June 5, according to prosecutors.Moscow, RutgersAleynikov studied applied mathematics at the Moscow Institute of Transportation Engineering before transferring to Rutgers University, where he received a bachelor’s degree in computer science in 1993 and a master’s of science degree, specializing in medical image processing and neural networks, in 1996, according to his profile on the social-networking site LinkedIn.Before joining Goldman Sachs, he worked for about eight years at IDT Corp., the U.S. vendor of prepaid calling cards, where he led the team responsible for developing routing systems, according to the profile.His profile on LinkedIn describes him as a vice president in equity strategy at Goldman Sachs and includes two recommendations from colleagues at the firm.Goldman ProfitGoldman was the world’s biggest and most profitable securities firm until it converted to a bank in September following the bankruptcy of smaller rival Lehman Brothers Holdings Inc. Goldman earned $2.3 billion last year, down from a record $11.6 billion in 2007, as market turmoil caused it to report a fourth-quarter loss, its first in a decade as a public company.Goldman’s equities business generated $2 billion of revenue in the first three months of 2009, down 20 percent from the first quarter of 2008, the company reported in April. Second-quarter results are due to be reported next week.
This is the most important post on this thread! Morbid brings to us what we really need. We need to look at history very carefully to discern the mistakes and the reasons behind the mistakes. It has now been 6 months of Obama, and he is a duplicate of Hoover. He is using the economic dogma that has been built by intellectuals in the employ of uber-acquisitors to maximize their wealth, and he thinks he can fix this disaster with the same dogma that got us here. We are ignoring history completely, and we will replaythe disaster again. It will not be a disaster for the uber-acquisitors, they will pick up the debris at fire sale prices. The population will suffer and the nation-state will have failed in its responsibility to provide for the general welfare. When a country gives welfare to the rich and ignores the widows and orphans, their is usually great distress to civil society. Why dowe ignore something as accessible as the history of the Great Depression?
So after all this pain and the “saving” by americnas, we have lowere dout debt by 100 Billion or .1 trillion?The savings rate increase they tout up to 6% is jsu tlike the unemployment numbers – FAKE. They count paying off debt in that number. That is not savings in cash or in some bank. if we do indeed have 5 trillion more to go who will take thsoe loses?And on this snippet “The Obama administration, hoping for a surge of investment sparked by health care reform and “green” energy opportunities, forecasts rapid growth of 5% in 2010 and 2011.” what are they smoking? if all their decsions they have made are counting on that to happen, it is no wonder they are talking second stimulus.Wall street will love second stimulus talk – becuase it will allow them to keep the Ponzi scheme they run to keep going.So Wonder how big will the second stimulus be? Anyone have an idea?U.S. debt shrinking at glacial paceTHE CREDIT TRAPPart 6: Consumers hit again as some banks raise credit card rates, feesPart 5 : Checking accounts are targets as banks find ways to boost feesPart 4: Sliding economy raises questions about credit scoresPart 3: Credit cards’ soaring rates bite consumersPart 2: Why banks are boosting credit card interest rates and feesPart 1: How rising home values, easy credit put your finances at riskUSA TODAYEighteen months into a deep recession triggered by a credit bubble, consumers have made little progress shrinking a mountain of debt. Until they do, the economy will struggle to grow — likely for years.Household debt peaked at $13.9 trillion in 2008, almost double the figure from 2000. Since then, as consumers cut up credit cards, refinanced outsized mortgages and slashed spending, debt has fallen — all the way to $13.8 trillion, according to the Federal Reserve.”We really have a long way to go,” says economist James Hamilton of the University of California-San Diego.Until the fourth quarter of last year, American consumers had never reduced their total debt in the post-World War II era. Yet the payback or “deleveraging” since then represents a small step along a very long road.”The kind of deleveraging we need to see takes six or eight years. … The retrenching of the U.S. consumer is a huge adjustment the whole world is going to have to absorb,” says Harvard University’s Kenneth Rogoff, former chief economist of the International Monetary Fund.Household debt peaked at 133% of disposable income in 2007 vs. 65% in the mid-1980s. To pare it back to a sustainable level, consumers will have to pay off — or walk away from — roughly $5 trillion of the total debt outstanding, says David Rosenberg, chief economist of the investment firm Gluskin Sheff. That’s more than China’s total economic output.Some debt will be erased through home foreclosures and credit card defaults. But the remainder must be painfully repaid, by consumers holding expenditures below earnings for years. Already, the savings rate, which fell into negative territory before the financial crisis, has jumped to 6.9%.That’s a big change from the pre-crisis period when consumers fueled a consumption binge by borrowing against the bubble-inflated value of their homes.But it’s not enough.The twin collapse of the housing and stock markets has destroyed more than $12 trillion in wealth since 2007. And wages now are flat-lining amid the recession even as interest charges continue adding to the debt tab.Consumers also have a harder time changing spending patterns than do corporations. Moving to a less costly home or scrapping a gas-guzzling car takes time. “This is a complete change in behavior. … We’re really just in the opening chapters of the deleveraging cycle,” Rosenberg says.The required deleveraging shadows the economy’s growth prospects. During the recent boom, consumption accounted for nearly 70% of economic output. With consumers pulling back, it’s not clear what will replace that lost spending. The Obama administration, hoping for a surge of investment sparked by health care reform and “green” energy opportunities, forecasts rapid growth of 5% in 2010 and 2011.But many are skeptical. “It’s very hard for me to see the basis for that,” says Dean Baker of the left-leaning Center for Economic and Policy Research.http://www.usatoday.com/money/perfi/credit/2009-07-06-usa-spending-debt_N.htm
Everyone has an opinion and sometimes when writing one, it can come across in a way not intended. all opinions should be respected and if not, then dont respond in a way that suggests someone is stupid, needs help, needs counsleing, etc…if another’s opinion bothers you. Take away what makes sense and not what does not. SWK and GSM offer some great insight as almost all who post here does, but the tone and frquency of personnal attacks seems to be increasing on this site.
Everyone has an opinion and sometimes when writing one, it can come across in a way not intended. All opinions should be respected and if not, then don’t respond in a way that suggests someone is stupid, needs help, needs counsleing, etc…if another’s opinion bothers you. Take away what makes sense and not what does not. SWK and GSM offer some great insight as almost all who post here do, but the tone and frquency of personnal attacks seems to be increasing on this site.
so how stupid can Goldman be to state this in court: ““The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public yesterday. “The copy in Germany is still out there, and we at this time do not know who else has access to it.””Is’nt that what most people feel and beleive Goldman has been doing? Squirm Goldman, Squirm… Average Joe American is hot on your tail and wants to see you taken down… Bloggers, Web sites, some mainstream news are hot on your tail…Average Joe American wants more than Bernie Madoff, They want Goldman, AIG, Citi, BOA, et al on the carving board… It’s interesting now to watch you all fighting to see who survives…A simple question? How Can average Joe American have any chance of playing (if they wanted to) or trusting wall street and the stock market when you have companies with these lighting fast, computer generated trading models and programs in place?
52% of Walmart employess get some sort of health insurance. They are proposing health insurance now for its workers based on some metric that determines how profitable an employee is… lol ….
Oh, goody … they can start with Al Gore and his not-so-green lifestyle.
I think it is pretty obvious what sector is not in trouble … that would be your Federal Government.
Alan Greenspan had a classic description of the average Joe/Jane paying of their debt … “Liquifying their balance sheets.”
You mean which segment is not in trouble YET. With tax collections headed South, and demand for federal $’s headed North, there is plenty of trouble ahead. Actually, is it here now, just temporarily covered with a band-aid.Independent Contractor
Sounds reasonable to me. What is wrong with paying your own way? How about this old line? “To whom much is given, much is expected.”Independent Contractor
U.S. House May Include Surtax on Wealthy in Health-Care PackageJuly 7 (Bloomberg) — House Ways and Means Committee members are likely to propose a surtax on high-income Americans to help pay for an overhaul of the health-care system, according to people familiar with the plan.The tax would be similar to, yet much smaller than, a surtax proposed in 2007 by Ways and Means Committee Chairman Charles Rangel, a person familiar with the committee’s talks said. That plan would have added at least a 4 percent levy on incomes exceeding $200,000, and was projected to reap as much as $832 billion over 10 years.Two people familiar with closed-door talks by committee Democrats said a House bill probably will include a surtax on incomes [household] exceeding $250,000, as Congress seeks ways to pay for changes to a health-care system that accounts for almost 18 percent of the U.S. economy. By targeting wealthier Americans, a surtax may hold more appeal for House Democrats than a Senate proposal to tax some employer-provided health benefits…According to the Tax Policy Center, a Washington research group, about 4.3 million of 150 million U.S. households filing tax returns will earn more than $200,000 this year…Mark Weinberger, vice chairman of New York-based Ernst & Young LLP, said that while Republicans won’t back higher tax rates, House Democrats at this point don’t need bipartisan support.http://www.bloomberg.com/apps/news?pid=20601213&sid=a3wUXb42NPX0
Tax Bill Appeals Take Rising Toll on Governments | The New York Times (July 1)Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop, threatening local governments with another big drain on their budgets.The requests are coming in record numbers, from owners of $10 million estates and one-bedroom bungalows, from residents of the high-tax enclaves surrounding New York City, and from taxpayers in the Rust Belt and states like Arizona, Florida and California, where whole towns have been devastated by the housing bust.“It’s worthy of a Dickens story,” said Gus Kramer, the assessor in Contra Costa County, Calif., outside San Francisco. “These people are desperate. They know their home’s gone down in value. They’ve watched their neighborhoods being boarded up. They literally stand in there and say: ‘When can I have my refund check? I need to feed my family. I need to pay my electric bill.”…In a survey conducted by the National Association of Counties, 76 percent of large counties said that falling property tax revenue was significantly affecting their budgets, said Jacqueline Byers, the association’s research director.Officials in some states say their property tax revenue is falling for the first time since World War II…The pain at the state level is trickling down to county and local governments. To compensate, about 10 percent of large counties are raising the tax rates associated with home values to minimize the revenue loss, the county association said…The appeals are not just coming from individual homeowners. Condominium associations and entire subdivisions are pushing for new tax assessments, as are companies that own office towers, industrial parks and shopping malls.New Jersey, which has the nation’s highest property taxes, has been besieged by tax appeals from homeowners like Peggy Tombro, whose rambling home in Bound Brook is assessed at a value of $1.8 million but is languishing on the market with an asking price of $1.3 million. Her taxes are increasing to $53,000 a year.”I don’t know what else to do,” said Ms. Tombro, 63, who has gone back to work selling antiques to pay her tax bill.In the Inland Empire of California, near Los Angeles, Joylette Lynch, 70, is challenging the assessed value of her home as she tries to scrape together $1,158 a month to pay her mortgage, taxes and other bills. Her two-bedroom house in a community for older residents was worth as much as $280,000 three years ago, but houses on her block are now selling for less than $100,000.”If the house is not worth what I bought it for, why am I paying the same amount in taxes?” she asked.Ms. Lynch, meanwhile, lost her job at a Bed, Bath & Beyond this year, and is behind on her mortgage payments. Shaving a few hundred dollars off her annual tax bill of $4,300 might not keep her out of foreclosure, but it would help, she said…http://finance.yahoo.com/taxes/article/107274/tax-bill-appeals-take-rising-toll-on-governments.html?mod=taxes-filing
If you’d like a complete pix of what Rosie sees for America’s foreseeable economic future, it’s here, today, on Squawk Box:http://www.ritholtz.com/blog/2009/07/david-rosenberg-on-squawk-box/
“Kill the umpire,” the fan cried to open the 1996 baseball season in Cincinnati, and eight pitches later, the man behind the plate, John McSherry, was dead, all 320 pounds of him screaming for more and more oxygen to feed his spastic heart. He’d been killed by a billion molecules of sink-clogging, Drano-resistant cholesterol that fed on his coronary artery and sucked up his life’s blood like a vampire in the heat of the night. The next day Howard Stern had characteristically railed that the antidote was obvious. It was the same for all fat people: “DON’T EAT,” he howled. As if the ump hadn’t known. The fact was, he couldn’t stop. He loved the taste of food – every sugary, fat-ladened, carbohydrated morsel. The first bite was a special ecstasy, as was the last, and everything in between. The man, it seemed, was a Cuisinart with four limbs.Franz Kafka wove a tale 100 years earlier that was a mirror image of McSherry’s tragedy. His “A Hunger Artist” described a professional faster – a sideshow freak in 19th century Europe who attracted attention and spare coins by withering away inside a wooden cage. The gapers marveled at his shriveled skeleton, stuck their hands through the bars to nudge his boney ribs, and awed at his resolve to starve himself to the precipice of self-extinction. “I always wanted you to admire my fasting,” confessed the hunger artist, “but you shouldn’t have. The fact is, I have to fast, I can’t help it. I couldn’t find the food I liked. If I had found it, believe me, I would have made no fuss and stuffed myself like you or anyone else.”The juxtaposition: one man who couldn’t stop and another one who couldn’t start – eating, that is. Their stories, though, are really not about food, but life itself – what compels us to do what we do, what forces us to act or not to act, what makes us who we are: is personal behavior really beyond our control? Shakespeare would retort that the fault lies not in our stars, but in ourselves. On the other hand, who are we other than this amorphous, gelatinous blob of moving flesh and bone molded primarily without our input, first by DNA, and then by environment into the living person we know as ourselves? Are we all just walking Cuisinarts, or better yet, mobile computers with a consciousness? Modern science has progressed to the point of asking, “Can machines think?” and if they can, it might well ask the corollary, “Are people machines?” The fact is that sophisticated modern machines can do just about anything a human being can do. The difference between “us” and “them” may only be our consciousness. We are “aware” whereas they are not. But if true, who wants to be a machine that simply knows it’s a machine? Who wants to walk the Earth as a preprogrammed robot with no input or free will? Unless the John McSherrys of the world can stop eating and the hunger artists can start, we might as well just turn out the lights.Our economy’s lights, if not switched off in a rehash of the 1930s Depression, have certainly been dimmed in a 21st century version likely to be labeled the Great Recession. Much like John McSherry, U.S. and many global consumers gorged themselves on Big Macs of all varieties: burgers to be sure, but also McHouses, McHummers, and McFlatscreens, all financed with excessive amounts of McCredit created under the mistaken assumption that the asset prices securitizing them could never go down. What a colossal McStake that turned out to be. Now, however, with financial markets seemingly calmed and an inventory-based recovery in store for the balance of 2009, there is a developing optimism that we can go back to the lifestyle of yesteryear. PIMCO’s driving thesis however, if not a juxtaposition, is succinctly described as a “new normal” where growth is slower, profit margins are narrower, and asset returns are smaller than in decades past based upon the delevering and reregulating of the global economy, which in turn should substantially inhibit the “gorging” of goods and services that we grew used to in decades past.Forecasts based on econometric models inevitably miss these secular/structural breaks in historical patterns because it is impossible to quantify human behavior, and long-term trends involving risk-taking and in turn derisking are decidedly human in their origin. Bell-shaped curves with Gaussian/random distributions fail to anticipate that human beings do not make decisions by chance or independently of each other, but in many cases in reaction to one another. Humanity’s personal and social computers appear to be programmed that way. And so, instead of “normal” distributions, economists and investors must learn to be on the lookout for “black swans,” and if not, then certainly “fat tails,” which differ from the measurement of natural phenomena accepted in science. “New normals,” flatter-shaped bell curves, and structural shifts in previously accepted standards become not only possible, but probable as human nature reacts to itself and its prior behavior. The efficient market hypothesis was always dead from the get-go, but academic tenure and Nobel prizes were food for the unwilling or perhaps unthinking.PIMCO and yours truly are not masters of the antithesis, a subjective approach which might derisively be called “crystal ball gazing,” but we try to focus on what might be legitimate changes in the way economies and financial markets are affected by seemingly irrational or “non-normal” behavior and events. The supersizing of financial leverage and consumer spending in concert with the politicizing of deregulation describes in fifteen words our most recent brush with irrational behavior and inefficient markets. Greed will come again. But for now, the trend is the other way and it promises to persist for a generation at a minimum. The fact is that American consumers have suffered a collapse in wealth of at least $15 trillion since early 2007. Global estimates are less reliable, but certainly in multiples of that figure. And when potential spenders feel less rich by that much, the only model one can use to forecast the future is a commonsensical one that predicts higher savings, lower consumption, and an economic growth rate that staggers forward at a new normal closer to 2 as opposed to 3½%. There’s no magic in that number, and no model to back it up, just a lot of commonsense that says this is how people and economic societies behave when stressed and stretched to a near breaking point.I was impressed this weekend by an article in the Op-Ed section of The New York Times by staff writer Bob Herbert. “No Recovery in Sight” was the heading and his opening sentence asked, “How do you put together a consumer economy that works when the consumers are out of work?” That is really all one needs to ask when divining our economy’s future fortune. Unless an optimist can prescribe how to put Humpty Dumpty back together again and shuffle him/her back to work then there can be no return to an “old normal.” As unemployment approaches 10%, what is less well publicized is that the number of “underutilized” workers in the U.S. has increased dramatically from 15 to 30 million. Those without jobs, as well as those individuals who only work part-time and have become discouraged and stopped looking, total 30 MILLION people. The number is staggering. Commonsensically, one has to know that many or most of these are untrained for the demands of a green-oriented, goods-producing future economy. Imagine a welding rod in the hands of an investment banker or mortgage broker and you’ll understand the implications quicker than any economist using an econometric model.What this all means to you as an investor is near obvious as well. Unsurprisingly, what still can be modeled is the direct correlation of real profit growth to real economic growth, assuming a constant division of the “pie” between profits, labor and government. If long-term economic growth declines by 1½% then profit growth will as well. This, after settling at perhaps half of absolute peak profit levels of 2007, because of the rise of savings rates from 0 to 8% or higher. But to add to the woes of the investor class, one has only to observe that their share of the pie is shrinking. What does the General Motors example tell us all about the rebalancing of power between the investor class and the proletariat? What do trillion-dollar deficits and the recent reinitiation of PAYGO government programs tell you about the future of corporate tax rates? They’re headed higher. Do you really think that a national health care program can be paid for with cost-cutting as opposed to tax hikes at insurance companies and benefit-paying corporations throughout all sectors of the American economy? The new normal will not be investor-friendly unless your forecasting dial is turned to “Pollyanna” or your intelligence quotient is significantly less than 100.Investors who stuffed themselves on a constant diet of asset appreciation for the past quarter-century will now be enclosed in a cage featuring government-mandated, consumer-oriented fasting. “Non Appétit,” not Bon Appétit, will become the apt description for the American consumer, and significant parts of the global economy, including the U.S. Because this is so, short-term policy rates will be kept low for longer than cyclical norms, and the outlook for risk assets – stocks, high yield bonds, and commercial and residential real estate will involve just that – risk. Investors should stress secure income offered by bonds and stable dividend-paying equities. Consumer Cuisinart consumption is a relic of the past.William H. GrossManaging Director
The Big Picture athttp://www.ritholtz.com/blog/2009/07…cds-1994-2008/has an investment graph today–that includes stock dividends–showing the “S&P500 vs CDs (1994-2008)”.Says Barry Ritholtz:Imagine two people who added $10,000 to their investment accounts on January 1st, every year for the past 15 years.One of them is risk averse. They put the money into Certificates of Deposits, getting a few percentage points each year, but the principal is insured.The other is less risk averse; they put money into an S&P500 Index each year.Who comes out ahead? The answer might surprise you…
I attach one pithy Big Picture blog comment:maynardGkeynes Says:July 7th, 2009 at 12:09 pmAnd think how much better CDs would have done without a deliberate policy by the Fed to keep the Fed Funds rate absurdly low in order to pump the stock market. Greenspan and now Bernanke have made Job #1 to punish small savers who just want to make prudent, safe investments at their local banks and sleep at night. Now those same people, who were enticed into risky investments, have seen their net worth devastated by the real estate and stock market bubbles. It’s terrible, and nobody seems to care about what happened to these folks except for the good guys like Barry and Jim Grant.
And it ain’t good.
ongoing Itulip debate on Political Correctness- Eastern VariantGhost of Marx haunts China’s riotsBy Jian JunboSHANGHAI – The weekend violence that has left 156 people dead and more than 816 injured in Urumqi, capital of northwestern Xinjiang Uyghur Autonomous Region, is the latest example of growing conflicts between China’s majority Han ethnic group and ethnic minorities.At the heart of the escalating problem are China’s antiquated policies towards its ethnic minorities – a raft of Marxist measures that are now pleasing neither the ethnic Han, nor the minorities. As China’s gargantuan economy has advanced, former leader Mao Zedong’s vision of political and economic equality between Han and non-Han has gradually been undermined.The end result could be seen on the bloody streets of Urumqi…China ethnic riots news capture (Warning: Graphic)http://www.iTulip.com/forums/showthread.php?t=10706As of Monday evening, at least 156 people were found dead and more than 800 others injured, including armed police officers, the Xinjiang Public Security Department said. More than 50 dead bodies were found in back streets and alleys, officials said, adding grimly that the toll may rise.
Very amusing. Guess I’m getting uncoördinated in my old age!SWK
How Al Gore lives really has no bearing on the validity of what he has to say about the environment. Snide comments like that are really unnecessary.SWK
Fair comment. I think many of us sometimes come across in our posts as more abrasive or intemperate than we mean to be. I also figure many of us are going through personal hardships of one kind or another, or simply the sorts of ordinary difficulties and frustrations people face every day, and use the anonimity of a forum like this to blow off a little steam. Surely most of those who post here, deep down, are not caustic, sensitive, and impatient jerks. but thoughtful folks with highly varied views, experiences, and backgrounds who yearn to see the world a better place. We can all learn from each other, and should strive to be more respectful of one another, even while we may vehemently dispute one another’s particular views.SWK
THE BIG WHOREHOUSE ON THE POTOMAC by Paul Craig RobertsJuly 2, 2009–As Americans celebrate July 4th, they can contemplate that the union of “free and independent states,” like the former British colonial power, has evolved into its final manifestation–a complete whore house. While Members of Parliament in London charge their expense accounts with every personal expenditure, including the rental of adult xxx-rated films, an American newspaper put the reporting of public policy out to bids until politico.com blew the whistle.In Washington, everything is for sale, including journalistic integrity. The Washington Post, which abandoned investigative reporting eons ago, decided to boost its sagging revenues by spreading her legs. The Post’s business division put out a flyer offering lobbyists access at the Post’s CEO’s gracious home to “those powerful few” in the Obama administration, Congress, and among the Post’s editors and reporters who decide the nation’s policies, such as health care.The Washington Post’s flyer offered a Wal-Mart low cost of a mere $25,000 for one “salon” to interact with decision makers and $250,000 for eleven interactions.Alas, people with an old-fashioned sense of integrity impugned the Washington Post’s new business model, and the Post’s boss, Katharine Weymouth, had to rescind the offer that would have rescued the newspaper by turning it into a “facilitator for private lobbyist-official encounters.”I say damn the old fashioned moralists. America would be much better served if the Washington Post was selling access to lobbyists instead of selling the US government’s PSYOPS operations in Iran, Afghanistan, Iraq, Georgia, Ukraine, Serbia, Venezuela, Honduras, and everywhere else, for which the paper receives a pittance: the reporter can tell his editor that he has a deep source within the government, hardly an adequate recompense for wars that cost American taxpayers hundreds of billions of dollars at a time when Americans cannot pay the mortgages on their homes.America would be better off if the Washington Post whored for lobbyists than for the US Imperial State, which has failed to adjust its imperial ambitions to its bankruptcy. As an example of its whoring for US Imperialism, on July 2, the Washington Post reported President Obama’s claim that Russian Prime Minister Putin is a person who lives partly in the past, with “one foot in the old ways of doing business and one foot in the new.”If Putin has “one foot in the new,” he is ahead of Obama who has both feet in the past.Obama said that Putin needs to learn that “the old Cold War approaches” to relations with the US are “outdated.”The Post reported this as if a failure of Putin’s is endangering US/Russian relations. The Post did not point out that it is Obama, not Putin, who has wars of aggression against three independent countries—Iraq, Afghanistan, and Pakistan, with a fourth war threatened with Iran. We know for a fact these wars originated in Bush administration lies and deception, but Obama continues the occupations and expands the wars, thus endorsing the deceptions…http://www.vdare.com/roberts/090702_whorehouse.htm
This is a great interview- he goes into detail about the impact of NO JOBS and why there will be no jobs for long time.
http://www.ritholtz.com/blog/2009/07/rosenberg-stocks-have-run-ahead-of-fundamentals/second rosenberg interview today…
I’m just wondering if the word “millions” doesn’t kind of take the air out of this story. Significant figures for Goldman involve at least nine digits to the left of the decimal point.
Er, excuse me, would you believe ten digits.
As I posted the other day and others seemed to slam me on eliminating shorting which morphed into a gambling discussion basically and thepros and cons of shorting and exotic instruments and exotic stock. its one thing for shiller to provide good data on current state of housing, but its another to use it like this, in what amounts to basically another gambling/ponzi scheme and yet it legal i suppose to do so. It is thinking, and crap like this that continues to foster what avergae joe american sees as excessive greed and dishonesty by the ENTIE financial system and markets.I had heard about this 2 months or so ago, but didnt actually beleive it would launch… So if you wish to particiapte do so at your own risk and on the backs of those Averge JOE American famailies loosing thier homes…the following discussion from: playshttp://www.businessinsider.com/robert-shillers-new-housing-etfs-are-a-dangerous-ripoff-2009-7Robert Shiller’s New Housing ETFs Are A Dangerous Ripoff (UMM, DMM)UMM Jul 7 2009, 04:15 PM EDT14.00 Change % Change-3.20 -18.60%DMM Jul 7 2009, 04:15 PM EDT36.47 Change % Change+3.07 +9.19%Allow me to introduce you to an investment product so disgracefully ridiculous that one could only assume it was launched on a dare.Very quietly, on June 30th 2009, some firm called MacroMarkets LLC (co-founded by the otherwise well-regarded Robert Shiller) launched two ETFs that purport to be able to give investors 300% of the return or it’s inverse of the S&P/ Case-Shiller Composite-10 Home Price Index.In other words, buying one of these plutonium bomb experiments is supposed to let the investor grab a triple helping of whatever the housing market in 10 metro areas does in a given day.I’m sorry, but if you’re wondering where the line should be drawn on this stuff for sanity’s sake, it is literally right here. Are you guys kidding me?In case you enjoy car accidents or slow-motion trainwrecks, I’ll give you the ticker symbols:MacroShares Major Metro Housing Up (UMM)andMacroShares Major Metro Housing Down (DMM)AKA Dumb and Dumber, AKA The Two Horsemen of the ETF Apocalypse, AKA Little Boy and Fat Man (yes, a Hiroshima/ Nagasaki reference).I’m in a rage right now over the launch of these two products and I hope those financial journalists who are able/ willing to spend the time accurately dissecting these two things will do so to the full extent if for no reason other than to prevent the needless losses that I believe both will generate at the expense of naive investors.Why am I so angered by the fact that these Frankenstein creations were permitted to slither out of the freakshow tent they belong under?How about these factors for a start:Lack of serious price discovery? Check.Lack of actual underlying real estate holdings? Check.1.25% expense ratio? Check.Disclaimers in the prospectus that absolve these instruments of any responsibility for not being able to perform the way they are supposed to? Check.“Don’t worry brah, these are triples! You can flip ‘em 5 seconds after you buy ‘em! Party on!”Oh, and before you tell me that these products are a good way for homeowners to “hedge” the value of their own homes…I’ll ask you whether or not you believe thata) a triple-short product truly has the ability to accomplish this objective for any period longer than one trading day?orb) the housing market in Phoenix is exactly the same as the housing market in Lanford, Michigan or Quahog, Rhode Island or Smurf Village for that matter?How do these instruments (claim to) work exactly? Here’s David Van Knapp’s explanation on Seeking Alpha:Unlike most ETFs, Up and Down do not invest directly in a relevant underlying asset such as stocks, bonds, or houses. Instead, they invest in short-term Treasury securities and overnight repurchase agreements. The paired trusts have a binding agreement to pledge assets to one another over time, according to a predetermined formula that is driven by changes in the housing index, based on the movement of housing prices. This transfer of value back and forth gives “investors” exposure to the direction of U.S. home prices.The structure resembles a see-saw as the assets are shuffled between the paired trusts. Because of the pairing requirement, an equal number of shares for each fund will be created. Because of the leverage factor, the Up and Down ETFs will experience changes of 3x the changes in the S&P/Case-Shiller Composite-10 Home Price Index.Am I being Punk’d? Is Ashton Kutcher gonna pop out from behind my Bloomberg terminal with a camera crew?Oh, and here’s a snapshot of how Dumb and Dumber are performing today, as of this 2:15 writing on July 7th:DMM up 9.94% on the dayUMM down 20% on the dayI see, so had you shorted both at the close yesterday, you’d be up 10% right now on the day. Inverse my foot. This is garbage and someone should be held accountable.MacroMarkets has tried this type of thing already and I offer condolences for the investors who got involved with some of their other failed products.From an otherwise-flattering portrait of Shiller in Fortune Magazine today:MacroMarkets has been down this road before. In 2006 it offered MacroShares that tracked the rise and fall in oil prices. But in 2008, after oil prices soared from $88 to $145 in only five months — an event that the MacroShares were not designed to handle — MacroMarkets wound them down. The company introduced another pair of oil MacroShares in July 2008, but they attracted few traders and were liquidated in June.Bob Shiller comes off like a true believer in this concept of being able to hedge everything in life, but many times, the execution of such an idealistic goal falls far short of the intention. In this case, the execution may literally subvert the intention as these wrecking balls cut their destructive swathe though the middle class investors they are being marketed to.How about this, I’m going to launch an ETF that lets you bet on what I’ll have for dinner tonight. How will we achieve this goal? Will we use spaghetti and meatball futures and arcane swaps contracts that nobody monitors? Yeah, sure…something like that. But don’t worry, it’ll be triple long or short, so you can coast off the volatility that the churning acids in my stomach produce as I consume the plate of food.Why don’t we launch ETFs based on the Boston Bruins win/loss record for the 2010 season, or how about a Jon and Kate reconcilliation target date index-linked fund?How about we just place a Guiness Book of World Records-sized roulette wheel on the corner of Wall and Broad and see how much more of America’s wealth we can vaporize before this decade’s end.Is no one else disgusted? Hello?Bueller?Sources:ETFs That Bet on Housing (Seeking Alpha)MacroMarkets LLC Official WebsiteDon’t Blame Bob Shiller (Fortune)
http://globaleconomicanalysis.blogspot.com/2009/07/tell-wells-fargo-bank-of-america-jp.htmlthis Mish is lunatic. would you accept IOUs from gov? no, not me. IOUs is not currency. IOUs is probably not fix-income/debt backed by collateral or high interest to compensate high risk or have some protection. Accepting IOUs as currency will only guarantee absolute loss at XX% (38%? 50%? 62% or 100% loss). IOUs can not be worthless? wanna bet? so how can you blame banks not accepting it. California has to balance the budget than looking for easy IOUs way out.
Home foreclosures expected to surge in coming monthsMoratoriums from banks, government to expire, setting off new wave of default actionsBy Don Lee | Washington BureauJuly 6, 2009WASHINGTON – — Just as the nation’s housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.Amid rising unemployment and falling home prices, mortgage loan defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on many troubled properties, in part because they had signed up for the home-stability plan from President Barack Obama’s administration, which required them to consider the alternative of modifying loans to make it easier for borrowers to make paymentsmore at:http://www.chicagotribune.com/business/chi-mon-foreclosures-0706-jul06,0,145094.story
United StatesAmerica’s Fiscal Train WreckJuly 06, 2009By Richard Berner | New YorkAmerica’s long-awaited fiscal train wreck is now underway. Depending on policy actions taken now and over the next few years, federal deficits will likely average as much as 6% of GDP through 2019, contributing to a jump in debt held by the public to as high as 82% of GDP by then – a doubling over the next decade. Worse, barring aggressive policy actions, deficits and debt will rise even more sharply thereafter as entitlement spending accelerates relative to GDP. Keeping entitlement promises would require unsustainable borrowing, taxes or both, severely testing the credibility of our policies and hurting our long-term ability to finance investment and sustain growth. And soaring debt will force up real interest rates, reducing capital and productivity and boosting debt service. Not only will those factors steadily lower our standard of living, but they will imperil economic and financial stability.United StatesAmerica’s Fiscal Train WreckFamiliar challenges. Sound familiar? Warning about these challenges has long been a staple for economists. Five years ago, for example, I summarized my concerns about our coming fiscal problems, along with the interplay among them and unexpected longevity, inadequate thrift and saving infrastructure, mediocre education outcomes, and inadequate energy policy (see America’s Long-Term Challenges, May 21 and May 24, 2004). I was merely the latest in a long line of alarmists; for example, Pete Peterson famously noted more than 20 years ago that “America has let its infrastructure crumble, its foreign markets decline, its productivity dwindle, its savings evaporate, and its budget and borrowing burgeon. And now the day of reckoning is at hand” (see “The Morning After,” Atlantic Monthly, October 1987). The Congressional Budget Office (CBO) has since 1997 – under directors from both sides of the aisle – carefully laid out ever-more depressing fiscal scenarios in its annual Long Term Budget Outlook, the latest of which appeared last week.The problem, ironically, is that the day of reckoning hasn’t come. This has seriously undermined doomsayers’ credibility and, more importantly, it has made the electorate and elected officials complacent about the threat from unsustainable fiscal policies. Some even proclaimed that “deficits don’t matter.”Fast forward to today. Yet the last five years have brought our ever-distant fiscal crisis rapidly forward. Some of the deterioration is obviously cyclical: Courtesy of the financial crisis and recession, aggressive fiscal stimulus, and ongoing military outlays, the federal deficit has ballooned to US$1.8 trillion or 13% of GDP in fiscal 2009. But the bulk of the threat is structural: The fiscal stimulus package included spending increases with minimal bang for the buck, leaving more debt than growth. In its FY2010 budget, the administration proposes to extend several tax cuts enacted in 2001 and 2003, provide relief from the alternative minimum tax, and increase both mandatory and discretionary spending compared with current law. Most important, by 2019 the full force of rising entitlement outlays and debt service will begin to hit the budget. No rosy growth scenario will provide sufficient resources to meet all the claims on future federal revenue. And while tax hikes or a broader tax base will likely be part of the solution, the real cure is to curb the growth of entitlement spending.Against that backdrop, voters and politicians are nervous: Two recent polls suggest that Americans are more worried about deficits than healthcare by a ratio of 2:1. But despite voters’ deficit anxiety, near-term action to reduce long-term deficits seems highly unlikely for two reasons. First, no one wants to endanger a still-fragile economy by raising revenues or cutting spending until they are sure of economic recovery. Second, while there is no shortage of fiscal scolds inside the Beltway, the political will to change popular entitlement programs is still absent.Healthcare the main culprit. Analysis of those programs makes it easy to see why. The rise in federal healthcare outlays under Medicare and Medicaid is the main long-term factor boosting deficits. These popular programs create a safety net for the elderly and disadvantaged that has been a band-aid for our flawed system of financing healthcare.The base is already large: In 2010, some 100 million Americans will be enrolled in Medicare, Medicaid and SCHIP (the State Children’s Health Insurance Program), and outlays amount to 5% of GDP. Longer term, Medicare enrollment will rise significantly as the population ages. More importantly, future per capita cost growth for both programs is well in excess of per capita GDP, meaning that outlays for these three programs will double to 10% of GDP by 2035 and nearly double again by 2080. Translated into budget outcomes, according to CBO, these programs will account for virtually all of the likely growth in primary federal spending – total spending less interest on debt held by the public – in relation to GDP, and thus all the likely expansion of the deficit and debt. In contrast, social security cost increases will play a relatively minor supporting role.There is no lack of options to alter the unsustainable path for Medicare and Medicaid outlays. At the end of 2008, for example, CBO analyzed 115 of them, any handful of which could significantly slow the growth of spending or find the means to pay for it. To name two: Raising the age of eligibility for Medicare by two years (to 67) starting in 2014 would save US$85 billion by 2019. Limiting the tax exclusion for employment-based health insurance to amounts below the 75th percentile for such premiums and doing the same for health-insurance deductibles for the self employed would net US$452 billion over 2009-18. Note that the second option would raise additional revenue, but would not address burgeoning entitlement spending. Yet the prospects for actually adopting any of these measures are dim. There is no serious discussion in Washington of, or appetite for, curbing eligibility for federal health programs. Nor, more important, is there the will to rein in the growth of per capita costs.Meanwhile, the current healthcare reform effort aims at the apparently conflicting goals of curbing costs and increasing access and quality. In the long run, those goals may turn out to be complementary. But in the near term, politics likely dictate that increasing access will take priority over cutting costs. And increasing access to today’s health options will be expensive. For example, preliminary CBO estimates of Subtitles A through D of Title I of the proposed “Affordable Health Choices Act” indicate that expanding access to health insurance for 39 million Americans by granting subsidies will cost US$1 trillion over the next decade. Proposals to cut costs may yet emerge to fulfill the president’s requirement that any healthcare reform be deficit-neutral. But political agreement will be hard to come by; witness the storm of opposition to a “public insurance plan” when the outline for any such plan is still vague. Thus, in the short-to-intermediate term, increasing access first means bigger deficits are likely. Pundits are describing the president’s ability to deliver a healthcare reform package that improves Americans’ lives and contains costs as a defining moment for his leadership. As I see it, it is also a bellwether for our willingness to tackle our fiscal challenges.Deficit disorder. America’s now chronically rising deficit will almost surely expand debt beyond the appetite of global investors to hold it without significant concessions in the form of higher interest rates or a big enough decline in the dollar to make it look cheap, or both. Soaring deficits and debt imply higher real interest rates. That hasn’t happened in the current recession, of course, because of the weakness in private credit demands resulting from the collapse of corporate external financing needs and the deleveraging of the American consumer. But rates likely will rise significantly when recovery begins to lift private credit demands. Standard estimates suggest that a 20-point sustained increase in debt/GDP – what we will experience between 2008 and 2010 – will boost real rates by 70-110bp.But many question whether rising deficits and debt will have significant longer-term market consequences. Optimists cite the example of Japan, where massive deficits boosted government debt to 160% of GDP with apparently no effect on interest rates. The comparison is not apt for two reasons. First, Japan’s lost deflationary decade pulled down nominal yields, but there were serious consequences for real yields. Real 10-year JGB yields averaged 1.7% over that period, much higher than the 30bp of annual real growth experienced in Japan. Indeed, my colleague Robert Feldman points out that this positive gap between real rates and real growth clearly boosted Japan’s deficits and debt unsustainably (see Fiscal Reform and the r-g Problem, June 17, 2005). Second, Japan’s massive current account surplus, which averaged 3% of GDP, means that Japan has no need to rely on foreign saving inflows.In contrast, America’s budget deficits are worsening our persistent internal and external saving-investment imbalances. Our chronic external deficit has shrunk to 2.9% of GDP in recession, but rebounding oil prices and imports suggest it will grow in recovery. Even a coming sea change in consumer behavior and the incipient rise in our personal saving rate to 7-10% of disposable income (5-8% of GDP) won’t be enough to offset federal dissaving. State and local governments are awash in red ink, now more than 1% of GDP and growing. Consequently, we still need sizeable inflows of saving from abroad to finance federal deficits.Fiscal credibility deteriorating. Some are concerned that our reckless fiscal policy will trigger a downgrade of the US sovereign debt rating, making the financing of our burgeoning deficits more difficult. While worries that the US will default on its debt are illogical, global investors and officials are concerned about the credibility and the sustainability of our fiscal policies. So am I. They fear that we will adopt policies that will undermine the dollar and the domestic value of dollar-denominated assets through a combination of risk premiums and inflation. I worry about that too, although such policies probably would be accidental rather than deliberate. As a result, interest rates may have to rise significantly to compensate investors, including reserve portfolio managers and sovereign wealth funds, for such dangers. While the dollar will for now retain its reserve-currency status, such concerns put it at risk.http://www.morganstanley.com/views/gef/index.html#anchor098c0c3c-6a29-11de-9228-3fb01e8a07e2
Your language is offensive and your post adds nothing substantive or constructive to the subject matter of this blog, Guest. Empty vulgarity is the sign of a lazy mind.SWK
Barack Obama is more than half way through his first year in office. What grade would you give him for his performance to date?A 7%B 7%C 13%D 21%F 52%http://www.houmatoday.com/Number of votes cast: 1554
Ambrose Pritchard-Evans on the JOBS issue:http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5742937/The-unemployment-timebomb-is-quietly-ticking.htmlSWK
This sort of “polling” is utterly unreliable statistically, because it is not random. It is limited to the predispositions of those who visit that site, and further filtered by those motivated to take the “poll” (who are more often going to be folks that want to grouse about the topic at hand).SWK
SWK,Well, why didnt you say you were a lawyer? That makes SO much sense to me now. I understand your defence of that political class of parasites so much better.I certainly must doff my hat to such learned commentary. I after all, have only worked on 6 continents managing large complex multi-site organisations for the last 25 years, travelled widely and am self taught in the arts of economics. No university education I’m afraid, just the school of hard knocks for me.Humble comparitively yes I know.And you lable me bombastic? This may come as a surprise SWK but I don’t seek your approval for what I post. I may not be eloquent enough for you but I do comment with a modicum of insight and always what I believe to be core truths. And quite rightly, you have every right to critique my opinions and comments. But I do recommend you get off your rather high lawyer’s horse and lose the personal attack (lawyer’s training?) when disagreeing with comments.For the record, I do stand by what I posted – all of it. The US political system is the system in deep crisis. It has been captured by the Banksters and the US citizens are considered mere serfs. And SHAME on the educated classes of the US for quietly standing by and in so doing abetting this disaster.
Good post MM. THanks.
I must have missed the offending post.
Well said kilgores
Thanks agent 67- lol
Still waiting for that 600 we discussed a few months back, OR.
IMO he is an “F”- so far. taken a bit furthur, he is an F to me because he has chosen to surround himslef with – a bunch of clueless advisors. Change Barrack – your clock of your popular support is ticking rather quickly now. Make a move, a play, something that says real change… something that inpsires people, something that gives averge jow american hope, something that says you mean what you say and can be trusted..How about take a month- pick the successors to Bernanke, Giethenr, Rommer, Summers, et al, and go wake one day and say 2, 3, 4, 5,6 or however many ar eneeded are being repalced because thier performance has not resulted in CHANGE or JOBS. That would send the type of message Average Joe American wants to hear and would send the message to the congress, the Corprate Gods, the Banksters, Wall Street, and any other greedy thieves, you are next and get with MY program and the peoples program of fixing things for all.If you choose same old strategies, policies, people you willbe a one term Prez and your pol numbers by this time next year will be a Bush low water marks. It’s yoour Choice…
and my typing stinks too much novacaine in my system i guess form the tooth docotr…lol
Boys will be boys…lol SWK and GSM bring a lot to this site…each has valuable insight..anyone know where Pete Ca is?
The Role of the International Republican Institute (IRI) in the Honduran CoupThe International Republican Institute talks of “coup” in Honduras, months beforeBy Eva GolingerThe International Republican Institute (IRI), considered the international branch of the U.S. Republican Party, and one of the four “core groups” of the congressionally created and funded National Endowment for Democracy (NED), apparently knew of the coup d’etat in Honduras against President Zelaya well in advance. IRI is well known for its role in the April 2002 coup d’etat against Venezuelan President Hugo Chávez and its funding and strategic advising of the principal organizations involved in the ouster of President Jean Bertrand Aristide of Haiti in 2004. In both cases, IRI funded and/or trained and advised political parties and groups that were implicated in the violent, undemocratic overthrow of democratically elected presidents.After the 2002 coup d’etat occured in Venezuela, IRI president at the time, George Folsom, sent out a celebratory press release claiming, “The Institute has served as a bridge between the nation’s political parties and all civil society groups to help Venezuelans forge a new democratic future…” Hours later, after the coup failed and the people of Venezuelan rescued their president, who had been kidnapped and imprisoned on a military base, and reinstalled constitutional order, IRI regretted its premature, public applause for the coup. One of its principal funders, the National Endowment for Democracy (NED), was furious that IRI had publicly revealed the U.S. government had provided funding and support for the coup leaders. NED President Carl Gershman was so irritated with IRI’s blunder, that he sent out a memo to Folsom, chastising him: “By welcoming [the coup] – indeed, without any apparent reservations – you unnecessarily interjected IRI into the sensitive internal politics o Venezuela”. Gershman would have much prefered that NED and IRI’s role in fomenting and supporting the coup against President Chávez have remained a secret.IRI, chaired by Senator John McCain, was created in 1983 as part of the National Endowment for Democracy’s mission to “promote democracy around the world”, a mandate from President Ronald Reagan. In reality, one of NED’s founders, Allen Weinstein, put it this way in a 1991 interview with the Washington Post, “A lot of what we do today was done covertly 25 years ago by the CIA.” IRI’s own history, according to its website (www.iri.org) also explains that its original work was in Latin America, at a time when the Reagan administration was under heavy scrutiny and pressure from the U.S. Congress for funding paramilitary groups, dictatorships and death squads in Central and South America to install U.S.-friendly regimes and supress leftist movements. “Congress responded to President Reagan’s call in 1983 when it created the National Endowment for Democracy to support aspiring democrats worldwide. Four nonprofit, nonpartisan democracy institutes were formed to carry out this work – IRI, the National Democratic Institute for International Affairs (NDI), the Center for International Private Enterprise (CIPE), and the American Center for International Labor Solidarity (ACILS).”“In its infancy, IRI focused on planting the seeds of democracy in Latin America. Since the end of the Cold War, IRI has broadened its reach to support democracy and freedom around the globe. IRI has conducted programs in more than 100 countries.”In its initial days, IRI, along with the other coup groups of the NED, funded organizations in Nicaragua to foment the destabilization of the Sandinista government. Journalist Jeremy Bigwood explained part of this role in his article, “No Strings Attached?”, “’When the rhetoric of democracy is put aside, NED is a specialized tool for penetrating civil society in other countries down to the grassroots level’ to achieve U.S. foreign policy goals, writes University of California-Santa Barbara professor William Robinson in his book, A Faustian Bargain. Robinson was in Nicaragua during the late ‘80s and watched NED work with the U.S.-backed Nicaraguan opposition to remove the leftist Sandinistas from power during the 1990 elections.”The evidence of IRI’s role in the 2002 coup d’etat in Venezuela has been well documented and investigated. Proof of such involvement, which is still ongoing in terms of IRI’s work, funding, strategic advising and training of opposition political parties in Venezuela, is available through documents obtained under the Freedom of Information Act posted here: , and also available in my book, The Chávez Code: Cracking U.S. Intervention in Venezuela (Olive Branch Press 2006). None of the claims or evidence regarding IRI’s role in fomenting and supporting the April 2002 in Venezuela and its ongoing support of the Venezuelan opposition has ever been disclaimed by the institution, primarily because all evidence cited comes from IRI and NED’s own internal documentation obtained under FOIA.Hence, when the recent coup d’etat occured in Honduras, against democratically-elected President Manuel Zelaya, there was little doubt of U.S. fingerprints. IRI’s name appeared as a recipient of a $700,000 Latin American Regional Grant in 2008-2009 from NED to promote “good governance” programs in countries including Honduras. An additional grant of $550,000 to work with “think tanks” and “pressure groups” in Honduras to influence political parties was also given by the NED to IRI in 2008-2009, specifically stating, IRI will support initiatives to implement [political] positions into the 2009 campaigns. IRI will place special emphasis on Honduras, which has scheduled presidential and parliamentary elections in November 2009.” That is clear direct intervention in internal politics in Honduras.The U.S. Agency for International Development (USAID) also provides approximately $49 million annually to Honduras, a large part of which is directed towards “democracy promotion” programs. The majority of the recipients of this aid in Honduras, which comes in the form of funding, training, resources, strategic advice, communications counseling, political party strengthening and leadership training, are organizations directly linked to the recent coup d’etat, such as the Consejo Nacional Anticorrupción, the Archbishop of Tegucigalpa, the Honduran Private Enterprise Council (COHEP), the Council of University Deans, the Confederation of Honduran Workers (CTH), the National Convergence Forum, the Chamber of Commerce (FEDECAMARA), the Association of Private Media (AMC), the Group Paz y Democracia and the student group Generación X Cambio. These organizations form part of a coalition self-titled “Unión Cívica Democrática de Honduras” (Civil Democratic Union of Honduras) that has publicly backed the coup against President Zelaya.IRI’s press secretary, Lisa Gates, responded to claims that IRI funded or aided (which also involves non-monetary aid, such as training, advising and providing resources) groups involved in the Honduran coup as “false reports”. However, there are several interesting links between the republican organization and the violent coup d’etat against President Zelaya that do indicate the institute’s involvement, as well as to the above mentioned funding that exceeds $1 million during just this year. In addition to its presence on the ground in Honduras as part of its “good governance” and “political influence” programs, IRI Regional Program Director, Latin America and the Carribean, Alex Sutton, has recently been closely involved with many of the organizations in the region that have backed the Honduran coup. Sutton was a featured speaker at a recent 3-day conference held in Venezuela by the U.S.-funded ultraconservative Venezuelan organization CEDICE (Centro para la Divulgación de Conocimiento Económico). CEDICE’s director, Rocío Guijarra, was one of the principal executors of the 2002 coup d’etat against President Hugo Chávez, and Guijarra personally signed a decree installing a dictatorship in the country, which led to the coup’s overthrow by the people and loyal armed forces of Venezuela. The conference Sutton participated in, held from May 28-29 in Venezuela was attended by leaders of Latin America’s ultra-conservative movement, ranging from Bolivian ex president Jorge Quiroga, who has called for President Evo Morales of Bolivia’s overthrow on several occasions, Peruvian Mario Vargas Llosa and his son Alvaro, both of whom have publicly expressed support for the coup against President Zelaya in Honduras, and numerous leaders of the Venezuelan opposition, the majority of whom are well known for their involvement in the April 2002 coup and subsequent destabilization attempts. The majority of those present at the CEDICE conference in May 2009, have publicly expressed support for the recent coup against President Zelaya.But a more damning piece of evidence linking IRI to the Honduran coup, is a video clip posted on the institute’s website at http://www.iri.org/multimedia.asp. The clip or podcast, features a slideshow presentation given by Susan Zelaya-Fenner, assistant program officer at IRI, on March 20, 2009, discussing the “good governance” program in Honduras. Curiously, at the beginning of the presentation, Zelaya-Fenner explains what she considers “a couple of interesting facts about Honduras.” These include, “Honduras is a very overlooked country in a small region. Honduras has had more military coups than years of independence, it has been said. However, parodoxically, more recently it has been called a pillar of stability in the region, even being called the U.S.S. Honduras, as it avoided all of the crisis that its neighbors went through during the civil wars in the 1980s.”Important to note is that what Zelaya-Fenner refers to as “U.S.S. Honduras” and “avoid[ing] all of the crisis that its neighbords went through during the civil wars in the 1980s” was because the U.S. government, CIA and Pentagon utilized Honduras as the launching pad for the attacks on Honduras’ neighbors. U.S. Ambassador at the time, John Negroponte, and Colonel Oliver North, trained, funded and planned the paramilitary missions of the death squads that were used to assassinate, torture, persecute, disappear and neutralize tens of thousands of farmers and “suspected” leftists in Nicaragua, El Salvador, Guatemala and Honduras.Zelaya-Fenner continues, “Thus, Honduras has been more recently stable, and it’s always been poor, which means that it’s below the radar, and gets little attention. The current president, Manuel Zelaya and his buddies, the leftists in the Latin American region have caused a lot of political destabilization recently in the country. He is a would-be emulator of Hugo Chavez and Hugo Chavez’ social revolution. He has spent the better part of this administration trying to convince the Honduran people, who tend to be very practical and very ‘center’ that the Venezuelan route is the way to go. Zelaya’s leftist leanings further exarcerbate an already troubled state. Corruption is rampant, crime is at all time highs. Drug trafficking and related violence have begun to spill over from Mexico. And there’s a very real sense that the country is being purposefully destabilized from within, which is very new in recent Honduran history. Coups are thought to be so three decades ago until now (laughs, audience laughs), again.”Did she really say that? Yes, you can hear it yourself on the podcast. Is it merely a coincidence that the coup against President Zelaya occured just three months after this presentation? State Department officials have admitted that they knew the coup was in the works for the past few months. Sub-secretary of State Thomas Shannon was in Honduras the week before the coup, apparently trying to broker some kind of deal with the coup planners to find another “solution” to the “problem”. Nevertheless, they continued funding via NED and USAID to those very same groups and military sectors involved in the coup. It is not a hidden fact that Washington was unhappy with President Zelaya’s alliances in the region, principally with countries such as Venezuela and Nicaragua. It is also public knowledge that President Zelaya was in the process of removing the U.S. military presence from the Soto Cano airbase, using a fund from the Bolivarian Alliance of the Americas (ALBA – Bolivia, Cuba, Ecuador, Dominica, Honduras, Nicaragua, St. Kitts, Antigua & Barbados and Venezuela) to convert the strategically important Pentagon base into a commercial airport.IRI’s Zelaya-Fenner explains the strategic importance of Honduras in her presentation, “Why does Honduras matter? A lot of people ask this question, even Honduran historians and experts. Some might argue that it doesn’t and globally it might be hard to counter. However, the country is strategic to regional stability and this is an election year in Honduras. It’s a strategic time to help democrats with a small “d”, at a time when democracy is increasingly coming under attack in the region.”There is no doubt that the coup against President Zelaya is an effort to undermine regional governments implementing alternative models to capitalism that challenge U.S. concepts of representative democracy as “the best model”. Countries such as Venezuela, Bolivia and Ecuador, are building successful models based on participatory democracy that ensure economic and social justice, and prioritize collective social prosperity and human needs over market economics. These are the countries, together now with Honduras, that have been victims of NED, USAID, IRI and other agencies’ interventions to subvert their prospering democracies.http://www.chavezcode.com/2009/07/role-of-international-republican.htmlObviously, you ALL have “skin in this game”.A “GAME”, Morbid? It’s BLOODSPORT for all the money and power in the hands of a few oligarchs who accept no limits to their power to oppress and theive from the working peoples, and your tax dollars are making it possible for democracy to be MURDERED along with PEOPLE who were living and breathing before the coup plotters killed them using your money.So once again I ask you to answer to why you are presenting support for anti-democratic forces and the overthrow of democratically elected governors. You’ve felt compelled to interrupt a timely and factual presentation of severely under-reported news of severely underestimated and under-recognized import by offering up disinformation, misinformation, uninformed opinion and the kind of bigoted spin that relies on people never consulting historical fact so they remain without the context and perspective they need in order to understand events and the future impact on their lives of possible outcomes, so it is now incumbent upon you to answer why you do this thing.It’s put up or shut up time, Pal.
and the latest update:http://www.chavezcode.com/2009/07/day-10-president-zelaya-in-washington.htmlPresident Manuel Zelaya arrived early this morning to Washington, D.C., to participate in several meetings with the Organization of American States (OAS) and the U.S. Department of State. The Honduran president, ousted in a military coup on Sunday, June 28, has a scheduled meeting at 1PM (EDT) with Secretary of State Hillary Clinton. It is unclear what exactly is expected of this meeting. Most likely President Zelaya will request the US Government cease ALL military and economic aid to Honduras until the coup government steps down. However, it is unlikely that Washington will comply with this request in its entirety. The Department of State has already been clear that it is not subject to suspending any aid directed toward “democracy promotion”, which includes large part of the $49 million it is investing this year in Honduras through USAID. There have also been no moves to remove the US military presence from Honduras, which probably won’t happen either, since the Pentagon undoubtedly wants to maintain the presence, and also shares very close ties with the Honduran military involved in the coup against President Zelaya.[note from me: see the sordid, bloody history of the school of the americas]Today, a group of representatives from the coup government have also arrived in Washington, and have a scheduled press conference at 3pm at the National Press Club in Washington DC. Their visit has been organized by Republican Senator John McCain, who is also the chairman of the International Republican Institute, heavily implicated in the Honduran coup (see my blog entry below). A lobbying firm with close ties to McCain, the Cormac Group, has organized the coup representatives’ press conference this afternoon. John W. Timmons, founding partner of the Cormac Group, was legislative counsel to Senator McCain and directed his legislative agenda, principally in the area of commerce. Cormac Group also represents the neo-fascist, anti-castro Cuban mafia company, Barcardi USA.Yesterday, President Obama mentioned the situation in Honduras in a speech he gave before the New Economic School in Moscow. He stated the following: “Even as we meet here today, America supports now the restoration of the democratically-elected President of Honduras, even though he has strongly opposed American policies. We do so not because we agree with him. We do so because we respect the universal principle that people should choose their own leaders, whether they are leaders we agree with or not.”http://www.chavezcode.com/2009/07/day-10-mtg-with-clinton-over-costa.htmlPresident Zelaya’s meeting with Secretary of State Hillary Clinton has just concluded in the State Department’s offices in Washington. President Zelaya is still meeting right now with Sub-Secretary of State Thomas Shannon and National Security Council Advisor on Latin America, Dan Restrepo. Clinton gave several remarks at the end of the meeting with President Zelaya, announcing that Costa Rican President Oscar Arias will lead “negotiations” between President Zelaya and the coup government in order to reestablish constitutional order in the country. Clinton refused to respond clearly to a question regarding whether or not the US Government was formally and legally considering the events in Honduras as a “coup d’etat”, stating that since “negotiations” and “diplomatic efforts” are going on now, Washington prefers not to comment more on the situation. Clinton, and later State Department spokesperson Ian Kelly, would not comment on the presence of the coup representatives delegation in Washington today, invited by Senator John McCain. Nor would they respond to inquiries regarding alleged meetings between those coup government representatives and Sub-Secretary of State Thomas Shannon.The main question here is why any negotiations at all are being conducted with a criminal, coup government that violently kidnapped and forced a democratically elected president into exile. The US government says it won’t negotiate with terrorists, yet it will negotiate with criminals, repressors, human rights violators, kidnappers and coup leaders. And, its letting them roam freely through the halls of Congress today.——————What did i tell you yesterday? That’s right: that Hillary’s job would be to play like a democratically elected leader of a sovereign nation should NEGOTIATE WITH THE COUP PLOTTERS BEFORE HE CAN RETURN TO HIS COUNTRY AS LEADER.
By the way, Morbid, if you won’t answer, I will only be able to conclude that you are vocalizing your support for anti-democratic forces violating the rule of law because you don’t actually like democracy at all – in fact, your values stand in direct opposition to the democratic ideals America loves to claim she stands for, exactly as your predatory cheap-labor social-darwinist ideology demands and commands.
Yeah,The interest free money to the banks is meant to let them reap the investment/interest bearing gain they can eke from it – screwing the small saver in the process. It is all about bail, bail, bail – out the big boys and their criminal elite partners.A time of reckoning is coming – I pray.Why doesn’t Obi take oil off the table – that would help the little people and stop the GS’s of the world from screwing us further.
It is no part of goodness to suffer fools and tools gladly, politely, or in silence, because their obfuscations and misinformation actively enable and protect the corruption and lies that cause immense unnecessary suffering for billions of human beings.There is no reason why tyranny, tyrants, and their supporters and apologists should not at once be hurled to the dustbin of history.
MM CA,I hear you. I think all of America and the World HOPE that Obi will succeed. And yet…I am afraid that past is the best predictor of the future – and the longer the past has been in place the more enduring the same future. It’s called psychic inertia.My hope for Obi is that he remembers how Lincoln ran his presidency – he was basically all alone. So many were against him and yet he persisted and used his talking skills to sway/shame the nation. But these days the people are too much on the dole – to many parasites.Decouple from the system as best you can – the only protection I can see at the moment to insulate you and yours from the “Future Shocks” that is surely coming.
GSM:Whatever. I didn’t mean to offend you. I didn’t label YOU bombastic — I said I thought your generalizations were so.You seem really sensitive about not having a formal university education, but there is no reason for you to lash out at me, or strive to denigrate the honorable and majestic profession of which I am proud to be a member. You have a fairly good command of the English language and you obviously know how to express yourself, but you sound like a petty adolescent which a huge chip on his shoulder when you rant about my status as a lawyer.It astounds me that even an intended compliment — my earlier comment that “I generally enjoy reading your posts and agree with the gist of much of what you say” — would compel you to declare vociferously that you don’t seek my approval for what you post. No need to worry about others considering you to be a mere serf, as you will consider YOURSELF to be so for as long as you continue to feel inferior to and victimized by those you characterize as members of the “educated classes.”SWK
I really think people have it all wrong about how much energy we use and our standard of living verses the rest of the world. It does not matter how much resources we use, it does matter how we use those resources, Do we add value, create wealth with those resources or doe we consume wealth. A one time this nation created most of the wealth in the world but unfortunately we have become a consumer of wealth for our pleasure. Look at the explosion of sports events at the high school level played under the lights at night time, running buses all over the place for the event, local stadiums built for night time games, concert halls replacing local factories so people can listen to the music.. People must realize at the rate we are going it is just a manner of time before our education system and health care system will also have to be like the rest of the world – after all we can not expect the rest of the world to fund our lavish health care system.I do not think Zimbabwe should be our role model but apparently some people do with the policies they would like to see implemented.
Obama is below F. he is pursuing same old democratic policy. no change, no nothing. opposite of him is Bush pursued same old republican policy. american people voted wrong.
We are the World! Rest in Peace Michael Jackson!
GSM, thanks for an excellent post (2009-07-05 23:08:11) cutting through all the chaff that one is exposed to while speaking the truth. It’s important to remember that the words of criticism used to denounce your position– “abrasive,” “caustic,” “vehement,” “simplistic,” bombastic,” “self-righteous,” “intemperate”…are more likely descriptive words of the idle “can’t-we-just-get-along” supporters of the system that is dragging us to Hell.Their arguments are compromise, surrender, apology, weakness, and defeat of our principles. If this system of corrupted government you so accurately describe is allowed to continue to grind down justice, opportunity and integrity–consistently supported by these voices of socialism—it is clear they’ll be plowed under with the rest of us.“When we are born, we cry, that we are come to this great stage of fools.” King Lear vi
Hope- my 2 yr old daughters name…Change- What Obama promisedVison- lacking for many years nowGreed- Banksters, CEO’s, Wall Street.. (Not all but almsot all)Misfits- Most of congress (most but not all)Freedom – slipping awayConstitution- Being dismantled slowy (GM, Chrslar Bankrputcies)Pain- 30 Million underemlpoyed Average Joe AmericansHurting- 45 Million uninsured Average Joe AmericansHomelessness- prolific now, tent cititesHunger- almost 40 million on food stampsAmerica- spilling blood still for other countries and peoples freedom througout the world because we careGood- 300 million Americans (almsot all)Caring-300 Million Americans (almsot all)Obama – you have 300 million that will support you, lead and enlist the 300 million and lets get going and fix things once and for all…Start Changing now… drive all the bad numbers to zero…
Gu,Actually you are correct about my having an anti-democratic outlook. I stopped voting in 1992 in USA elections because I concluded that the entire enterprise was hijacked and bankrupt.These days I would characterize myself more as a Voltaire Economist.
Voltaire distrusted democracy, which he saw as propagating the idiocy of the masses. To Voltaire, only an enlightened monarch or an enlightened absolutist, advised by philosophers like himself, could bring about change as it was in the king’s rational interest to improve the power and wealth of his subjects and kingdom. Voltaire essentially believed enlightened despotism to be the key to progress and change.Voltaire considered himself a deist. He did not believe that absolute faith, based upon any particular or singular religious text or tradition of revelation, was needed to believe in God. In fact, Voltaire’s focus was instead on the idea of a universe based on reason and a respect for nature reflected the contemporary pantheism, increasingly popular throughout the seventeenth and eighteenth centuries and which continues in a form of deism today known as “Voltairean Pantheism.”He wrote, “What is faith? Is it to believe that which is evident? No. It is perfectly evident to my mind that there exists a necessary, eternal, supreme, and intelligent being. This is no matter of faith, but of reason.”Voltaire died on 30 May 1778. When asked on his deathbed by a priest to renounce the devil and turn to God, he is alleged to have replied, “Now is no time to be making new enemies”.
Heard on Main Street: “Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?”
O Roubini, Roubini, wherefore art thou Roubini?
he’s deciding what side of the fence he is on. I’m thinking Him and Obama may be working a deal soon
@found it at prorev : No I had not seen that, but it is a logical extension of the sort of ethics that drive private health care. I’m just glad I live in Canada and have access to excellent care. My mother has had multiple heart surgeries by top flight surgeons (valve replacements over the years due to rheumatic fever in Britain as a child).I have given birth to two children & had a discectomy & my spouse has had a total knee replacement. We do not have crushing debt, never had to stress out during our recovery about how on earth we were going to pay for it and returned to work healthy, happy, productive and debt free. And everyone here has the same access regardless of income. Don’t believe any of the bogus propaganda regarding how bad Canadians have it, utter b.s. My mother would have been dead years ago if she had to rely on the system south of the border. Health care is a human right. No one has the right to profit from others misery. Read up on Tommy Douglas & Norman Bethune if you want a Canadian perspective on health care delivery.
if the u.s.a. was an electrical appliance it would be short circuitingout all the power supplied to it to some outside ground which wouldbe storing up that power to service and reconstruct something entirely unknownto the existing appliance, soon to be deconstructed/scrapped and replacedby some other globalllllly functioning, more useful, fixture.as they used to say..’charge it’! even as it drains away, short?as for trust, it is just defacto manifest high probability outcomeprediction based on the likely mutually energetic exchanges predicatedon emerging emergent relations and surface stability, all things being equalas they say, or all things being stable and supported by ecologic dynamic exchange and mutual dependence, as it were or is. as in the “deal” whereemergent has a basis on which to exist as an emergent identity, otherwise,we are all just so much biota/animalia or otherwise lacking that humanthingy, or so he thought before bedtime.pss. good night, sweet dreams and may the morning be.
Ho Hum, yawn
I love Obama. I think he’s doing a damn fine job, and I’d give him an A.SWK
All the angry jabberwocky in the world won’t make a lick of difference. You can rail against the system all you want, but you can’t change it by setting yourself up outside it unless you manage to convince a colossal percentage of Americans to do so as well, and you surely can’t do that while you’re calling them lily livered and lazy appeasers of your principles (whatever those are).Oh, and three cheers for socialism.SWK
Honestly, SWK, this post seems over-the-top in superciliousness. You tell GSM not to be so sensitive to his inferior educational status, in effect, but at the same time damn him with faint praise in telling him he has a “fairly good command of the English language.” You seem to be doing a lot of policing of this site recently. Are you a lawyer or a barrister?
PB:GSM does indeed have a fairly good command of the English language, and as I added, he knows how to express himself. I don’t see how that is “faint praise.” It’s just praise.This entire line of dialogue started when I responded to a post GSM made, expressing my view that he was making sweeping, conclusory generalizations about problems that were too complex to be described that way, in particular, a statement which I read to say that anyone who runs for public office is self-serving. Frankly, it’s getting a little old reading posts by folks who seem to feel they have some sort of monopoly on the truth, or that their perspective is the only legitimate one. I don’t find this endless verbal wailing about the government and the banks and everything else under the sun to be particularly enlightening or constructive. It’s just spewing bile.I do respect your opinions, though, and I’m sorry if I seem to be “policing” the site. That’s not my intention. I guess I’m just guilty of doing a little spewing of my own, and sometimes in my own particular supercilious idiom. I don’t mean to be churlish. I can try to be more circumspect in my comments going forward, although it has been my experience that no matter how circumspect I am, someone is always going to read something I did not intend into one of my posts at some time and take offense.To answer your last question, I am an American lawyer. I lived in London for a while, where I earned an LL.M. in international and comparative law. I am registered to practice in patent cases before the U.S. Patent and Trademark Office. I have handled domestic and international transactional work, as well as litigation, for over 23 years. During that time I have been employed in both the public and private sectors. I have tried and handled appeals of both criminal and civil cases in state and federal courts. I have taught international topics, including public international law, at a law school and to undergraduates at a large state university. Besides law, my academic training includes work in philosophy, economics, computer science, and mathematics.SWK
Gu. get a life!
Except that what Al spews is increasingly being proved to be rubbish … but the rest of us are expected to modify our lifestyle while he jets around giving us his wisdom.
So America has become Germany. Way to go, America. Enjoy standing on line to return your Coke bottles for the deposit, and don’t forget to take your cloth bags to the store.
He does do quite a bit of policing, so I think he’s a Democrat.
Truth be told, I’ve been a registered Republican twice and a Democrat twice. I have voted more than once for third party candidates over the past 33 years.Sorry if my commentary comes off as an attempt to stifle views with which I disagree. It is not so intended.SWK
Me too but not short anything:-)