A commercial RE broker and I were discussing the "plan". He said it had to be done; there is no choice. I asked how we borrow the money. He said we borrow it from ourselves, like we always do. He then shook his head and said people don't understand how governments borrow money.
Like Reagan said, apparently it is money "we owe ourselves."
What will Bush do for his next act? Become ruler of the universe and inadvertantly trigger an inflationary expansion which causes space to flatten, background energy to dilute, and lead to a new cosmic 'ice age' irreversible by any technology known even to the alien galaxy-minds that run things?
We're in the money, we're in the money;
We've got a lot of what it takes to get along!
We're in the money, that sky is sunny,
Old Man Depression you are through, you done us wrong.
We never see a headline about breadlines today.
And when we see the landlord we can look that guy right in the eye
We're in the money, come on, my honey,
Let's lend it, spend it, send it rolling along!
Oh, yes we're in the money, you bet we're in the money,
We've got a lot of what it takes to get along!
Let's go we're in the money, Look up the skies are sunny,
Old Man Depression you are through, you done us wrong.
We never see a headline about breadlines today.
And when we see the landlord we can look that guy right in the eye
We're in the money, come on, my honey,
Let's lend it, spend it, send it rolling along!
Well, that didn't take too long, now did it?
I can hardly wait to win some more real estate prediction contests too!
Geez, upthread we were just talking about the end of inflation if you don't combat it Volcker style;-P
Let's see the national debt was 6.783T five years ago a week from now.
Hummmm, five years from now....
aww I can't do the math, make a round 15T.
Hank not withstanding......
O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts.
"Lehman Brothers in Britain collapsed with a mammoth £100 million black hole in its staff pension fund, it emerged last night. The deficit means that many former staff in Britain may not have their retirement promises met in full. Trustees of the fund wrote to the Pension Protection Fund (PPF), the industry lifeboat, last week seeking assistance, as The Times revealed on Saturday."
I'm just glad I never took a dump on Jas Jan over the last couple years when he was posting all his crazy stuff at HBB, Calculated Risk, and other blogs. Gotta say the man has been proven right...unfortunately.
Date \tDebt Held by the Public \tIntragovernmental Holdings \tTotal Public Debt Outstanding
01/19/2001\tNot Available\tNot Available\t5,727,776,738,304.64
01/22/2001\tNot Available\tNot Available\t5,728,195,796,181.57
I mentioned this before but I'm deeply concerned for all the pension funds who will have baby boomers retiring from now till 15 years from now.
They will live longer than the models will predict. And seeing that the markets have been relatively flat for the last 10 years. There is going to be a real shortage...
Idiot economist on Bloomberg today said he wasn't too concerned with the ten trillion, since with we have a 15 trillion dollar "economy". Whatever that is. Probably includes consumption, whatever that is. Well with Wall Street illusory paper wealth gone and everyone else hurting...
Uh, Obama won't do worse than Bush. First of all, he'll get us out of Iraq. Second of all, any increase in healthcare spending (and let's pray that happens) will be more than covered by raising the tax rate on the $250k families.
I'm just glad I never took a dump on Jas Jan over the last couple years when he was posting all his crazy stuff at HBB, Calculated Risk, and other blogs. Gotta say the man has been proven right...unfortunately.
Last week I woke up and realized I really was a "born and bred" dope.
It's a horrible feeling at first. But at least you can do something about it once you acknowledge reality.
How Will Americans Get Rid of the Crooks Like Paulson Who Lord Over Them?
There is ample evidence during the past 14 months that Americans are ruled over by banking and finance Crooks, especially, Bankrupters and Fraudsters of New York City (BFNYC), who control the US government (USG) and the Federal Reserve (Fed).
The crisis is not economic but a political one whereby the Crooks were able to take full control of the political process because democracy allows for it. Hell, democracy facilitates it. The crisis developed under the watchful eyes (wink and node) of Greenspan-Bush-Bernanke-Paulson-Dodd-Frank-Schumer regime, all agents of the Crooks. And the same agents of the crooks are in power to supposedly find a solution to the crisis. There is no solution to the crisis as along as Crooks remain in-charge. And they will remain in-charge after the 2008 election no matter who is elected.
So, How Will Americans Get Rid of the Crooks Who Lord Over Them?
After being disgusted with democratic politicians Americans will elect their Grand leader, a code word for American Hitler without invoking Nazis or Hitler, some time in 1916 or 1920 elections. The Grand Leader will hunt down the Crooks just like the Nazi leaders were hunted down after the WW II. They will be hunted down all over the world and the counties that harbor them would be bombed and even occupied, if needed. Israel is likely to be among these countries, as some of the Crooks will definitely flee to Israel.
There are no good solutions to Americans problems once they allowed the Crooks to take control.
Does anyone read Mike Morgan's website frequently and/or is anyone familiar with him?
I just started reading his site and listened to the conference call he had this morning, and he sounds like a pretty smart guy, and apparently has generated some pretty impressive returns this year.
I on the other hand have not done so well in spite of being as bearish as people like Mish and others on here. So I am considering investing some of my money with Mike, but am curious to get some other peoples' opinions before possibly contacting Mike, so I would really appreciate any help.
We'd better create a lot more $250k families so we can tax them to pay for all these bailouts, and healthcare, and infrastructure additions, and mortgage relief, and etc, etc, etc...
Is there any chance that the US Government will do something completely crazy and wipe out my retirement savings which are all 100% in TIPS? I've been trying to figure out the safest capital preservation mechanism besides guns food and bullets and TIPS is my best bet; inflation proof, deflation proof, if honored. What can happen that they might lead to a wipeout of my savings?
I have called for the institution of an Economic Doomsday Clock, just like the old atomic age scare system, to tell us all just where we are in relation to midnight in the financial world. Stop by and vote!
maybe..and i know many dems who have committed many sins
but match me a repub who has said something like this...
"Monday after Senate Banking Committee Chairman Chris Dodd, D-Conn., said he wants the government to receive a stake in the companies helped by the rescue.
Dodd told CBS's The Early Show on Monday that taxpayers should be "first in line" to get money back once conditions in the industry stabilize and recover.
"We want oversight," he said, adding, "It's important that we act quickly, but it's more important that we act responsibly."
Senate Democrats are also calling for the plan to include aid for homeowners struggling with mortgage payments and caps on executive compensation."
I live in San Diego and for what ever reason it is bikes sell for a lot on craigslist. Sometimes as much as retail. I kid you not it's bizarre. I appreciate the thoughts tho.
I'm going to sell my '06 Lemond on it tho. I hope it will fetch a bunch.
Anyone interested, I'll make a special CR poster deal!
sorry if this has been discussed recently--i did see it here yesterday. did bush want to privatize social security to bail out the ibs? on reflection, i think so. if he succeeded with that, the deluge would have occurred on somebody else's watch.
WASHINGTON (CNN) - President Bill Clinton said Monday that the United States would pay off $216 billion in debt this year, bringing to $355 billion the amount of the nation's debt paid down in the three years since the government balanced the budget and began running surpluses. In a written statement, Clinton said the $216 billion payment represented the largest debt paydown in American history, and he said that the federal government's long-term debt is now $2.4 trillion lower than projected to be when he first took office.
I forecast the future as best as I can based on my read of history. Democracy turns into a very bad system towards the end. Remember Greece? Poor Socrates!
I could be wrong, but I try to tell as I "sees" it.
Anyone else think that the language used was intentionally inflammatory to buy time for GS/MS??? This Fri/Sat/Sun will be interesting days indeed!
"...pending a statutory five-day antitrust waiting period..."
From an earlier thread:
"...California began waiting periods for gun purchases and crime went up. So they increased the waiting period and crime went higher..."
I live in Atlanta--90% of the gas stations in Atlanta are completely out of gas tonight. There are huge lines at the stations that do have gas. I guess we are getting the welcome to the USSA treatment here.
I am effing done with this shit. I have no confidence in the gov, our money, or our future. Might as well embrace it and walk that path on purpose.
Currently Smoking Cannabis
Man, that would be a total mistake! We need more neighbors like you to help chill us out and keep us sane (and chuckling)!
Scary words, and I can't tell whether they're in jest. Like the joke headline trend earlier today, fact has become so warped that it's hard to distinguish it from fiction.
I'm frightened of cash in hand because of a weimar scenario. I'm afraid of inflation protected treasuries because the government has been backed into a mad dog's corner and might do a universal default.
I'm frightened of owning a farm and land because that's the first thing they'll loot when things get desperate.
I'm frightened of guns because that gives the police an excuse to confiscate or murder me when serving a warrant.
I'm frightened of living because I don't know what strange roads this country will walk.
I'm frightened of dying because I cannot say what strange dreams may come.
I live in Atlanta--90% of the gas stations in Atlanta are completely out of gas tonight.
I live in a decaying northeastern metropolis that happens to be a major transshipment point for petroleum. Despite an ideal strategic location, I noted that half the gas pumps at the local fuel dispensary were "temporarily out of service".
Good thing the media is well-trained to report it as panic buying or I'd say we were having an acute petrol shortage here in America.
unlike the financial crisis, the increase in the debt has all been by design
to understand, you need to separate the two, even if the financial crisis does have, for Bush and conservatives, going back to Reagan, the ancillary salutary benefit of increasing the national debt
one of the core neoliberal strategies implemented by Reagan, Thatcher and even someone like Pinochet in Chile, was to reduce taxes while passing government services to the private sector as much as possible, while cutting taxes
in Chile, Pinochet was even able to pass the Chilean version of Social Security to the private sector in the form of retirement accounts, although it required a military dictatorship to do it
as David Stockman revealed, the goal was to make it impossible to use the government to pursue any kind of social program by depriving it of the revenue to do so
the goal was nothing less than to make it impossible for the government to pursue an agenda of urban empowerment like the Great Society, or even the safety nets of the New Deal
and, in a best case scenario, the creation of pressure to destroy, through privatization, as Pinochet did in Chile, the most revered accomplishment of the New Deal, Social Security, and thus, permanently drive a stake through the heart of FDR
Clinton reversed this, and the prospect of success in paying off much of the national debt in a subsequent Gore administration may explain why the Republicans, and the specific capital interests behind them, were so desperate to prevail during the Florida recount, because, if they had lost, they faced the prospect of a government flush with the resources to do all the things they hated, deal with the environment, reduce the cost of education, confront poverty, subsidize health care, etc.
there has been discussion as to how 9/11 has been used to justify American military intervention around the world, and the curtailment of civil liberties generally, less so in regard as to how it provided an excuse for Bush and Cheney to return to the grandiose aspiration of defunding the government pursued by Reagan
interestingly, the most vehement opposition to it has come from far right Republicans, not Democrats, who, by and large, seem totally oblivious to what the finance capital interests behind the Republicans are seeking to achieve
paradoxically, the current financial crisis both helps and hinders their cause, it helps, quite obviously, by exploding the debt beyond the wildest dreams of the financial ideologues, it hurts, by exposing the fundamental hypocrisy behind the entire scheme, and the underlying class fissures that have heretofore been concealed
Anomyous -- I have been wondering the same thing. I have roughly 15% of my portfolio there.
I had the same thinking.....some protection against inflation (even if we know the CPI is gamed by the gov't), and supposedly you have protection against deflation if you hold to maturity.
Now somebody correct me if I'm wrong, but would TIPS perform better than T-Bonds if interest rates start zooming up?
Brad DeLong had a funny post in which he said in effect that Bernanke and Paulson are trying to avoid making the mistakes made in 1929, by Arthur Burns in the 1970s, and by the Bank of Japan in its crisis. Rather they are determined to make their own new and original mistakes. LOL.
"The economy is strong. Very strong. Keep on shopping. Do not worry."
Reminds me of "They Live." I wonder if you put the right kind of sunglasses on whether Bush & Co. look like the alien undead, too. I guess Paulson's halfway there already.
Default on everything. Walk off into the sunset. And live like a nomad. The cost of doing so is approaching net zero
I did it a couple of years ago. It's funny how unmotivated you can become when you enter a certain remaining time horizon and see things how they really are.
I care very little about my job anymore, seeing as our "free market" fanatics have trashed them all and made employment both unpredictable and highly political.
I don't check my mail anymore after I discovered the post office felt a right to jam tons of unsolicited garbage in my face.
I pay cash for most things, I no longer desire to own a house, a new car, or even television. I've discovered that most women in my age range are undesirable and so that led to the discovery that a great deal of economic activity is really about sex... attracting the opposite sex - clothes, house, flashy car.
My cash flow now quite good, I have over $3K per month in disposable income and I blow in on restaurants, or trips and I don't worry abou the future much now because... i don't see one.
CSC, it's the dope talking. No, I don't mean Dubya. Find a new drug. One that won't make you sick. One that won't make you crash your car, or make you feel three feet thick.
I recommend good quality champagne, in moderation.
Socrates was a traitor who sided with those who militarily attacked the Athenian democracy. His basic philosophy on government was "it is the job of rulers to give orders, and the job of the ruled to obey them".
Poor Socrates, my ass. The guy was undemocratic scum.
Whatever bailout passes, US is turning out to be a land of sheeples. First everyone buys into the american ideals. Then everyone buys an american property no matter how much debt. Finally everyone commit their children to pay for wall street. Sheeples, let me hear BAAH!
DeMint Opposes Wall Street Bailout
Plan does not solve the problems that caused the current credit crunch, and could make them much worse
September 22, 2008 - Washington D.C. - Today, U.S. Senator Jim DeMint (R-South Carolina) announced his opposition to the $700 billion plan proposed by the Bush Administration to bailout Wall Street.
"After reviewing the Administration's proposed bailout plan, I believe it is completely unacceptable. This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy. This plan fails to oversee or regulate the government failures that led to this crisis. Instead it greatly increases the role for Secretary Paulson whose market predictions have been consistently wrong in the last year, and provides corporate welfare for investment firms on Wall Street that don't want to disclose their assets and sell them to private investors for market rates. Most Americans are paying their bills on time and investing responsibly and should not be forced to pay for the reckless actions of some on Wall Street, especially when no one can guarantee this will solve our current problems."
"This plan will not only cause our nation to fall off the debt cliff, it could send the value of the dollar into a free-fall as investors around the world question our ability to repay our debts. It's also very likely that this plan will extend the cycle of bailouts, encouraging other companies to behave in reckless ways that create the need for even more bailouts, triggering an endless run on our treasury. This plan may make things look better for Wall Street in the next couple months, but the long-term consequences to our economy could be disastrous.
"There are much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn't want anymore. We should start by reforming government policies and programs that created this mess, including the Federal Reserve's easy money policy, the congressional charters of Fannie Mae and Freddie Mac, and the Community Reinvestment Act. Then Congress should pass a number of permanent and proven pro-growth reforms to encourage capital formation and boost asset values. We need to make permanent reductions in the corporate tax and the capital gains tax rates. We have the second highest corporate tax rate in the world, which encourages companies to take jobs and investment overseas."
"It's a sad fact, but Americans can no longer trust the economic information they are getting from this Administration. The Administration said the bailout of Bear Stearns would stop the bleeding and solve the problem, but they were wrong. They said $150 billion in new government spending using rebate checks would solve the problem, but they were wrong again. They said new authority to bailout Fannie Mae and Freddie Mac would solve the problem without being used, but they were wrong again. Now they want us to trust them to spend nearly a trillion dollars on more government bailouts. It's completely irresponsible and I cannot support it."
there has been discussion as to how 9/11 has been used to justify American military intervention around the world, and the curtailment of civil liberties generally, less so in regard as to how it provided an excuse for Bush and Cheney to return to the grandiose aspiration of defunding the government pursued by Reagan
He said this a couple of days ago and I thing that ihas one of those foot in mouth "lipstick" moments . He really need to come out and carefully slam Paulson -
"Haha, I just heard Obama wants Paulson to stay if he gets elected. He's not very confident in his own pick is he?"
Financial Position
SINGLE-EMPLOYER AND MULTIEMPLOYER PROGRAMS COMBINED
Item 2007 2006
Total Assets $68,438 $61,138
Total Liabilities $82,504 $80,019
Net Income $4,815 $ 4,230
Net Position $(14,066) $(18,881)
friardaddy: I commend Clinton's economic policies, but that's more about good timing.
Not so on timing. Clinton did his tax raise in 92 (not ONE GOP voted for it) and only got it passed by one vote in the House and with Gore's VP vote in the Senate. The GOP tortured him over the tax raise in the 94 elections, costing him control of congress in 94 and 96. From then on, he was hostage to GOP (remember Gingrich?) attempts to disembowel the government and get back to pre-FDR times. From 94 to 2006, the GOP ruled supreme in Congress and with Bush after 2001, did exactly what they liked (started a war and funded it with debt, and cut taxes multiple times, castrated regulation of all kinds (including the financial industry), and generally spent far more money than taxes raised. Remember that voodoo economics that said you increase federal revenues by cutting taxes (with no exceptions).
I love how everyone, wants some equity in the banks in exchange for shitty assets, we are now willing to take shitty equity now for shitty assets. Paulson is riding the A Bomb down just like slim pickens.
As someone who grew up in an urban area despoiled by the Great Society and staffed by Great Society era do-nothing bureaucrats kept in power by union bloc voting until the place fell down around their ears, I have to say that the pining for the golden days of the New Deal are real knee-slappers. You can come and tour a selection of our municipalities with 20% debt burdens on their public budgets.
Ahh, how history seems better when we re-invent it. You guys are gonna have to do a little better than the welfare state. There's a reason people rejected it.
look into the yucatan area of mexico (inland, not the tourist shit). nice folks, beautiful country, cheap RE. we are seriously thinking about bailing there. it was originally supposed to be 5 or 10 years from now, but......
(CNN)Quick Vote
Do you agree with the Bush administration's decision to spend $700 billion to bail out the financial system?
Yes \t31% \t82728
No \t69% \t184496
Total Votes: 267224
Why are they even bothering with CEO pay? Any firm who needs a bailout should automatically lose their top officers, like AIG and f/f. If they don't leave, then they really didn't need the bailout. The only way to save the country? Yes, from the perspective of an investment banker! I just hate the odds; Paulson negotiating with Frank.
Anonymous writes: I'm frightened of cash in hand because of a weimar scenario. I'm afraid of inflation protected treasuries because the government has been backed into a mad dog's corner and might do a universal default. I'm frightened of owning a farm and land because that's the first thing they'll loot when things get desperate. I'm frightened of guns because that gives the police an excuse to confiscate or murder me when serving a warrant. I'm frightened of living because I don't know what strange roads this country will walk. I'm frightened of dying because I cannot say what strange dreams may come.
At the entrance to a classical Buddhist garden sit two lions. Their names are Fear and Desire. They are the source of the delusions that keep you out of the garden of enlightenment.
Runners! Begone with you. The only difference between you scamps and the bankers is the the weight of the Republic's treasure your make off with and the location of your Bahrein. Is it any wonder you were overcome, when your first reaction to a crisis is to bolt with a cry of "every man for himself"?
THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated.
Want to play the "weak state brain drain"? Don't think our franchises will be waiting back here for you when you return.
By the way. Depending on how bad this gets it could well mean the end of the pax americana. Military security, like oxygen is something most people only think about when they don't have it.
I wondered who Paulson reminded me of from an old movie. Thanks to Sue for reminding me of the great scene of Slim Pickens riding the a-bomb to victory. Hank has to feel just like that right now.
Last time I checked, the tax rate in Belize was around 50%. I believe it's still taxed as a British colony, although that's info from ten years ago.
I work for a non-US company now and amusingly they listed me as a British citizen, I have no idea why. We're opening new business in South America next year and I'm hoping to bail out then, probably for good.
People who want to abandon the Republic in a crisis? Mead is sweet but bitter when paid for. I don't know how people could leave their homeland benighted and oppressed for a better angle elsewhere without a tyrant's proscriptions compelling them.
Byzantine_Ruins - Sell high, buy low. The U.S. has tax obligations it can't possibly meet. I'm better off in a country with a younger population and lower cost of living if I can manage it.
Plus I'm a better draw for senoritas than American women.
The current National debt is $9.727 trillion (see TreasuryDirect) as of Sept 19, 2008. That leaves the debt about $273 billion short of my projection with 4 months to go.
It was looking touch-and-go there but I knew Bush had it in him.
Who says he's a miserable failure? He sure succeeded on this one, stoopid lie-bruhls.
WASHINGTON (AP) -- It's the largest government bailout in U.S. history and two days after it was introduced to the Americans paying for it, the proposal is still largely a mystery.
Among the unanswered questions: How will the government mop up the bad mortgage debt on banks' books, who will run the process and how much will it cost?
ADVERTISEMENT
Key elements of the plan remain in flux as behind closed doors Democrats demand modifications that would provide more help for ordinary Americans in return for bailing out the country's financial giants.
The crisis started on March 20, 2001, after Domingo Cavallo, an economic minister, was given powers to restructure the economy. At that time, the government owed bondholders approximately $132 billion, which it was unable to pay (CNN, 2001). In July 2001 the Argentine stock market fell to a two-year low and Argentinas credit rating was cut. Within a week, [President] Cavallo slashed pension funds and state salaries. From August to November 2001, the government swapped debt with international financial institutions and negotiated with the International Monetary Fund (IMF) for additional loans. In November 2001, there was a run on the banks, leading Cavallo to implement bank withdrawal limits. One week later, he announced that all private pension funds would be transformed into treasury bonds or government backed loans to service debts (BBC, 2001).
"since gerald ford, bill clinton is the only president who ever (EVER) submitted a balanced budget to congress...period.
mock turtle | 09.22.08 - 8:03 pm | #
There were only 3 in between, one (D) and two (R). Have you swallowed any other strawmen lately that you'd like exorcised?
Seriously, blaming this on either party is childish and non-productive.
"People get the government they deserve" - Will Rogers
"The rich will require an endless supply of the poor." - Voltaire
...although we certainly helped support her (good thing she lived in a rent-controlled apartment), it was really awful that in her last years (she died at 94), my grandmother had to worry about money.
If Italy did not have national health care, she REALLY would have been fucked. Just saying.
"This is a black week. Those of us who have supported financial capitalism are open to the charge that the system we championed has merely enabled a few spivs to get rich. But it helped produce healthy economic growth and low inflation for a generation. It would take a very big recession indeed to wipe out those gains. Do not forget that in the debate ahead."
These guys have been wrong wrong wrong for ages about how all this financial alchemy spread risk. They were right about the accelerated growth it produced, but guess where all that wealth got squirreled away?
But you see their tactic now? Look how much finance did for you? The recession we are going to have wont take all that away, therefore, it was still a good idea. B -f-in-S. This is the kind of event that when all is said and done will be shown to be one giant redistributive machine. And that is all. In the boom the wealth gains flow to the rich, and in the bust, the risks taken accumulate losses all around. Then you get a period of below average growth afterwards which leaves you back in a decade where you would have been.
As someone who grew up in an urban area despoiled by the Great Society and staffed by Great Society era do-nothing bureaucrats kept in power by union bloc voting until the place fell down around their ears, I have to say that the pining for the golden days of the New Deal are real knee-slappers. You can come and tour a selection of our municipalities with 20% debt burdens on their public budgets.
Ahh, how history seems better when we re-invent it. You guys are gonna have to do a little better than the welfare state. There's a reason people rejected it.
Check out the economic numbers during the 50s and 60s compared to now, wage growth, income inequality, etc.
it has been papered off with easy access to credit, but now that the punch bowl is being taken away, we will soon discover that people are about to be far worse off than they ever were back then
no more credit, stagnant wages, deflation or stagflation looming over horizon and a completely defunded government
the 1970s will be remembered nostalgically
the urban corruption of the 50s and 60s is nothing compared to what is being implemented, a local manifestation of something that has gone international, on a exponential scale, with finance capitalists instead of labor unions and ethnic neighborhoods as the beneficiaries
and, a lot of places did quite well under that model, for example, California built an enormous amount of its infrastructure during that period, an infrastructure, that, while decaying today, was used to generate a lot of wealth and a good standard of living for millions of people who migrated here
But it helped produce healthy economic growth and low inflation for a generation. It would take a very big recession indeed to wipe out those gains.
I didn't know The Economist had so completely lost their minds, I thought they had been a beacon of sanity during the Bush years.
There's got to be a better way to create a strong economy besides creating bubbles that explode every 10 to 20 years. In 1988 the bailout cost around $200 billion, this time it's going to be about a trillion.
Is it going to be $5 trillion in 2028??? Is this the 'free market capitalism' that the GOP fwap-fwap-fwaps to all the time?
I had lunch today with some friends who are CFOs and General Counsels for private equity and hedge funds. One of them mentioned that he had drawn down ALL his credit lines last week and stashed the proceeds in TBills. The others reported that they had done the same thing. They also said that they had heard from numerous friends running finance at other funds of their funds doing the same thing.
I guess that explains last week's the bank lending squeeze and zero TBill yields.
I agree with the Economist's point of view, that free markets produce more wealth over the long run. The bubble we've seen recently was partly the result of private parties, but most was due to government intervention.
Without FNMA, Freddie Mac, the FHA, the FDIC, borrowers and investors would have had much more incentive to exercise caution. With government incentives to bid up house prices coming from all directions, it's no wonder we had a mega-bubble.
It's a pity for this country's next generation that we will increase the power of government in response to this crisis. "Born and bred dopes". LOL!
CR, since we are now officially on the hook for the FNM/FRE debt and guarantees, isnt it more like $15 T? Ok, maybe you dont count the guarantees, but the $1.7 T of on balance sheet debt of the GSE's should deffinitately be included in the count.
Anon,
Sounds like a very reaasonable strategy to me. TIPS do sort of give you the best of both worlds. Not fail safe though, given the huge increase in debt, real interest rates might rise. (good old rates up, bond price down) However, relative to just about everything else not a bad bet.
3rd party analysis projects McCain's tax cuts will cost another $5 Trillion, comparable to the trillion's that Bush's tax cuts cost. Weren't they supposed to "Pay for themselves"?
The Iraq war could cost US its financial system
Published: September 22 2008 03:00 | Last updated: September 22 2008 03:00
From Mr John M. Coates.
Sir, The US government last weekend decided it could no longer risk taxpayers money by supporting Lehman Brothers and on Monday that bank filed for bankruptcy. In assessing the wisdom or otherwise of this decision one fact should be kept in mind: the International Monetary Fund estimates that the total cost to banks of losses stemming from the subprime crisis will amount to $1,000bn; the cost of the war in Iraq, according to other estimates, particularly one by Linda Bilmes and Joseph Stiglitz, will come to $3,000bn.
The US has shot its financial bolt in Iraq, which may cost the country its financial system. It quite simply no longer has the money to stop a run on banks. Seen in this light, the war in Iraq brings to mind the ruinous decision on the part of the French ancien régime to finance Lafayettes campaign during the American revolution.
John M. Coates, University of Cambridge, Cambridge, UK
I made a similar reference to the burgeoning federal deficit in the opening pages of Chapter 1 of my book, Financial Armageddon (first published in March 2007):
"Sometime during 2007 or
2008, the flickering display on the national debt clock will almost
certainly run out of room. The ever-increasing figure will not be
able to fit the extra digit that will pop up when federal government
borrowing breaks the $10 trillion dollar barrier. Unless, of
course, the Durst family, who own the clock in New Yorks Times
Square, decide to upgrade it or there is a sudden bout of fiscal
responsibility in Washington.
"Unfortunately, the odds of the latter are almost certainly nil."
I assume penalties for early [401k] withdrawal, tax rate increases will increase, even on top of decreased earnings.
This reasoning (which I share) is why I've warned everyone who will listen not to convert their 401(k)'s into Roth IRA's. (Opening a Roth is fine; converting into one is not). Not even when the 2010-11 "window" comes along that allows one to spread the taxes owed over two years.
It's true that tax rates are almost certain to be higher when most of us retire 15-30 years from now than they are today. But it's also true that the so-called "tax advantage" of a Roth - the ability to withdraw principal and earnings tax-free at retirement - only exists because of the generosity of a past Congress.
And - in the words of Ric Edelman - "what Congress giveth, Congress may taketh away."
And they will ... you can almost bet on it. Congress will eventually (a few years after the bulge of conversions in '10-'11, of course) give themselves permission to "double-dip" taxes from your Roth. Initially it will apply only to those with high incomes, of course, so that they can put a nice populist spin on it.
I only hope that we, as individuals, can do enough to prepare for the changes that will come down from this financial crisis! One part "don't put all of your eggs in one basket," one part "cross your fingers and pray," and one part "do the best we can to get the least-of-all-evils in office."
3rd party analysis projects McCain's tax cuts will cost another $5 Trillion, comparable to the trillion's that Bush's tax cuts cost. Weren't they supposed to "Pay for themselves"?
$20 Trillion here we go!
BDiego | 09.23.08 - 2:38 am | #
No, they weren't. We were just supposed to believe that they would.
The bubble we've seen recently was partly the result of private parties, but most was due to government intervention.
LOL!
Who, pray tell, manipulated the government intervention? Who actively sought the legislative and policy changes that were exploited to inflate the bubble?
By this standard, Hitler, Mussolini and Tojo were partially responsible for World War II.
We have the technology.
3 rd
I dont know if I should congratulate you CR or really what to do for that matter...
.......
I did find this at TBP and got a hoot out of it...
buymyshitpile.com
Again this is all pretty depressing...
......
ades, When I made this prediction, I hoped I was wrong ... but it ends up I was an optimist.
Best Wishes.
Obama can top that, I'm sure. His health plan alone is a cool trillion.
10 trillion bailout plan to shore up the collapse of the hoopajoop bubble plox.
A commercial RE broker and I were discussing the "plan". He said it had to be done; there is no choice. I asked how we borrow the money. He said we borrow it from ourselves, like we always do. He then shook his head and said people don't understand how governments borrow money.
Like Reagan said, apparently it is money "we owe ourselves."
Somehow I don't think this is so, however.
I was an optimist
Yes, we all know that, CR.
It's okay.
It's discounted.
CR - as great a call as that was, I wish you were wrong for all of our sake.
There are 346,065,536,839 prime numbers less than 10 trillion.
The rest are 'subprime'.
How many primes are there?
What will Bush do for his next act? Become ruler of the universe and inadvertantly trigger an inflationary expansion which causes space to flatten, background energy to dilute, and lead to a new cosmic 'ice age' irreversible by any technology known even to the alien galaxy-minds that run things?
I wouldn't be surprised.
It's all in the market.
Congratulations in advance.
We're in the money, we're in the money;
We've got a lot of what it takes to get along!
We're in the money, that sky is sunny,
Old Man Depression you are through, you done us wrong.
We never see a headline about breadlines today.
And when we see the landlord we can look that guy right in the eye
We're in the money, come on, my honey,
Let's lend it, spend it, send it rolling along!
Oh, yes we're in the money, you bet we're in the money,
We've got a lot of what it takes to get along!
Let's go we're in the money, Look up the skies are sunny,
Old Man Depression you are through, you done us wrong.
We never see a headline about breadlines today.
And when we see the landlord we can look that guy right in the eye
We're in the money, come on, my honey,
Let's lend it, spend it, send it rolling along!
Well, that didn't take too long, now did it?
I can hardly wait to win some more real estate prediction contests too!
Geez, upthread we were just talking about the end of inflation if you don't combat it Volcker style;-P
Someday this war's gonna end...
Jas,
I never thought I'd say this; ever.
But you're right. We're crooked and most of us (myself included) have been blind to it for a long time.
I owe you a beer! Let me know if you're ever in Diego.
......
Sadly, you got it just right!
R2K
god i love those fiscal conservatives!
Nice to know Bush finally outdid his father at something - piling up Federal government debt.
CR,
I wonder if that 10 trillion dollar number will prove to be sychologically significant and alarm folks when we blow by it.
If so, the spike in oil and gold today might be only the start, eh?
and i'd rather have obama's health care then golden parachutes for bush and mccain cronies. At least we'd get something for our Trillio
Let's see the national debt was 6.783T five years ago a week from now.
Hummmm, five years from now....
aww I can't do the math, make a round 15T.
Hank not withstanding......
My 401k (not yet all that big), lost about $1000 last week. Sadly, that was about on part with my net income
R2K
Check this out:
Wall Street Journal, quoting bank lobbyists:
"This is the Super Bowl and New Year's Eve of legislation."
stored in google's cache here:
This is the Super Bowl and New Year's... - Google News
Now look at the article. Hmm...it's been redacted out. Wonder if WSJ's news Murdoch overlords are flexing their muscle.
Oops. Where'd that "p" go in "psychologically"?
Clearly this mess scares the pee out of me.
god i love those fiscal conservatives!
In the words of the greatest veep who ever lived:
"Deficits don't matter."
Know fear:
O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts.
No ones opinion counts with out the $$$ backing it.
I stumbled across this when thinking about telling Sen Graham to get his nose out McCains a@@ and go to work.
Communicating with Congress
Is THAT what this bailout is all about? Helping you meet your national debt prediction?
Really, CR. There are other ways.
In response to this Fox News has asked you CR "Why do you hate our troops?"
Calculated Risk writes:
nades, When I made this prediction, I hoped I was wrong ... but it ends up I was an optimist.
Best Wishes.
This is the so true and really deeply unsettling. Add my thanks to your pile.
आप सही हैं
Close enough for "government work!"
HA!!!! I KILL ME!!!!!
(A.L.F.)
National debt is on the order of 9.1T, Barking Tribe.
R2K
By the way, did everyone realize that most Americans support the bailout?
Really. The CNN poll says so.
Americans want bailout, but cost a concern - Sep. 22, 2008
I guess I'm in the minority.
My 401k (not yet all that big), lost about $1000 last week. Sadly, that was about on part with my net income
When do we get to a "use it or lose it" situation in retirement accounts?
I assume penalties for early withdrawal, tax rate increases will increase, even on top of decreased earnings.
nades, When I made this prediction, I hoped I was wrong ... but it ends up I was an optimist.
sorta like when I was right about the AIG bailout...
sometimes it sucks to be right.
i hope you don't find yourself to be an optimist much more!
If we can't work off the debt, we can always become China's largest kidney farm. Because they will be paid.
Ugh. This is why we practice birth control. No way am I handing this to an offspring.
"That's right, son. Some day you'll provide a rich man a fresh kidney. It's your patriotic duty."
So what was the deficit when he came into office?
In case anybody cares, Ford has joined GM on the no short list.
i hope you don't find yourself to be an optimist much more!
CR,
I'm with YtL on this one.
.......
"Lehman Brothers in Britain collapsed with a mammoth £100 million black hole in its staff pension fund, it emerged last night. The deficit means that many former staff in Britain may not have their retirement promises met in full. Trustees of the fund wrote to the Pension Protection Fund (PPF), the industry lifeboat, last week seeking assistance, as The Times revealed on Saturday."
More governemnt debt this tie in the UK.
CR
Did you break a record for number of visitors at one time today??
Nemo thats too funny. I had been planning on piling on the shorts on GM and Ford all weekend long.
Looks like my brother (the only one I told my story too) ratted me out!
....
The historical high was a little over 100% of GDP during WWII. We're rapidly approaching that figure.
Mark to market is the truth. You want something else?
FORD?!
I'm going to break something. Probably my hand, maybe my front door.
OK...screw it. You guys win. I'm out. I'm done with this culture and society.
I'm just glad I never took a dump on Jas Jan over the last couple years when he was posting all his crazy stuff at HBB, Calculated Risk, and other blogs. Gotta say the man has been proven right...unfortunately.
Date \tDebt Held by the Public \tIntragovernmental Holdings \tTotal Public Debt Outstanding
01/19/2001\tNot Available\tNot Available\t5,727,776,738,304.64
01/22/2001\tNot Available\tNot Available\t5,728,195,796,181.57
I mentioned this before but I'm deeply concerned for all the pension funds who will have baby boomers retiring from now till 15 years from now.
They will live longer than the models will predict. And seeing that the markets have been relatively flat for the last 10 years. There is going to be a real shortage...
......
Idiot economist on Bloomberg today said he wasn't too concerned with the ten trillion, since with we have a 15 trillion dollar "economy". Whatever that is. Probably includes consumption, whatever that is. Well with Wall Street illusory paper wealth gone and everyone else hurting...
Uh, Obama won't do worse than Bush. First of all, he'll get us out of Iraq. Second of all, any increase in healthcare spending (and let's pray that happens) will be more than covered by raising the tax rate on the $250k families.
I'm just glad I never took a dump on Jas Jan over the last couple years when he was posting all his crazy stuff at HBB, Calculated Risk, and other blogs. Gotta say the man has been proven right...unfortunately.
Last week I woke up and realized I really was a "born and bred" dope.
It's a horrible feeling at first. But at least you can do something about it once you acknowledge reality.
so lets look at where we are:
there are no words for the insanity. if someone told you these things would come to pass a year ago, you would have laughed.
question: who in their right mind would be long ANYTHING right now?
How Will Americans Get Rid of the Crooks Like Paulson Who Lord Over Them?
There is ample evidence during the past 14 months that Americans are ruled over by banking and finance Crooks, especially, Bankrupters and Fraudsters of New York City (BFNYC), who control the US government (USG) and the Federal Reserve (Fed).
The crisis is not economic but a political one whereby the Crooks were able to take full control of the political process because democracy allows for it. Hell, democracy facilitates it. The crisis developed under the watchful eyes (wink and node) of Greenspan-Bush-Bernanke-Paulson-Dodd-Frank-Schumer regime, all agents of the Crooks. And the same agents of the crooks are in power to supposedly find a solution to the crisis. There is no solution to the crisis as along as Crooks remain in-charge. And they will remain in-charge after the 2008 election no matter who is elected.
So, How Will Americans Get Rid of the Crooks Who Lord Over Them?
After being disgusted with democratic politicians Americans will elect their Grand leader, a code word for American Hitler without invoking Nazis or Hitler, some time in 1916 or 1920 elections. The Grand Leader will hunt down the Crooks just like the Nazi leaders were hunted down after the WW II. They will be hunted down all over the world and the counties that harbor them would be bombed and even occupied, if needed. Israel is likely to be among these countries, as some of the Crooks will definitely flee to Israel.
There are no good solutions to Americans problems once they allowed the Crooks to take control.
Jas
Does anyone read Mike Morgan's website frequently and/or is anyone familiar with him?
I just started reading his site and listened to the conference call he had this morning, and he sounds like a pretty smart guy, and apparently has generated some pretty impressive returns this year.
I on the other hand have not done so well in spite of being as bearish as people like Mish and others on here. So I am considering investing some of my money with Mike, but am curious to get some other peoples' opinions before possibly contacting Mike, so I would really appreciate any help.
Thanks in advance.
$5.73T x 2 = $11.46T
Go for double, Bushie.
Whats HBB?
I dont know that blog...
TIA
.....
Last week I woke up and realized I really was a "born and bred" dope.
It's a horrible feeling at first. But at least you can do something about it once you acknowledge reality.
ac
We'll you're about a week ahead of time. I'm still in the "I feel dirty" stage.
What comes next?
.....
Housing Bubble Blog
PS;
Paulson plan the ultimate
PIK bond
"question: who in their right mind would be long ANYTHING right now?"
The buy and pray "investors" on the yahoo stock forums.
I am sick and tired of the % of GDP freaks out there! Please include the entire debt of $53 trillion...now tell me what % of GDP that is!!!
We'd better create a lot more $250k families so we can tax them to pay for all these bailouts, and healthcare, and infrastructure additions, and mortgage relief, and etc, etc, etc...
Hi Currently Smoking Cannabis!
I am from the government. I am here to help you moderate your opinions.
Do not worry about the National debt. The National debt is being closely monitored by government experts.
The economy is strong. Very strong. Keep on shopping. Do not worry.
At least we'd get something for our Trillion
Subsidized fixed rate mortages...above-market rates on bank deposits...a war machine to secure cheap gas...
Main Street got plenty. Now it's time to pay the bills.
Is there any chance that the US Government will do something completely crazy and wipe out my retirement savings which are all 100% in TIPS? I've been trying to figure out the safest capital preservation mechanism besides guns food and bullets and TIPS is my best bet; inflation proof, deflation proof, if honored. What can happen that they might lead to a wipeout of my savings?
Hi Shaquille O'Neal!
I am from the government. I am here to help you moderate your opinions.
Everything is great in America!
The economy is strong. Very strong. Keep on shopping. Do not worry.
I say go long on bicycles....
Diogenes was right. Kudos to the poster with that moniker. F this stupid house and these crooked slave masters. F money. F The Man.
Time to get a tub, a dog, and a fat joint...
I've had it with Babylon
ARGHHH!@#@!#$@#$
Jas, hate to say this but I think you just jumped the shark with that one.
Why don't you quit while you're ahead, old chum?
I have called for the institution of an Economic Doomsday Clock, just like the old atomic age scare system, to tell us all just where we are in relation to midnight in the financial world. Stop by and vote!
"Hi Shaquille O'Neal!
I am from the government. I am here to help you moderate your opinions.
Everything is great in America!
The economy is strong. Very strong. Keep on shopping. Do not worry."
Can you please help me with my jump shot?
Hi Anonymous!
I am from the government. I am here to help you moderate your opinions.
Your retirement savings are perfectly safe. Do not worry. Watch TV. Stay uninformed.
The economy is strong. Very strong. Keep on shopping.
The TARP cramdown is making understand what it might have been like for the Iraqis when L. Paul Bremer came to town...
TC writes:
I say go long on bicycles....
Funny you say that.
I was in a bike store this weekend. Asked him how business was.
"The high end bikes" *This place has some $5K bikes (no motor mind you) "have not been moving, the commuter bikes have been flying off the shelves"
I'm heading back to get one this afternoon.
......
Hi Shaquille O'Neal!
I am from the government. I am here to help you moderate your opinions.
I do not have any special knowledge about sports. Do you want me to contact Super Moderator for advice about your jump shot.
The economy is strong. Very strong. Keep on shopping. Do not worry."
This chart of debt increases by Presidency is quite illuminating...
Maximize screen to fully appreciate.
I'm just glad I never took a dump on Jas Jan
I was disappointed. After all, I am corrupt and perverted myself.
mission accomplished!
just in time
Chief inspector: Iran may be hiding secret nukes...
Jas, hate to say this but I think you just jumped the shark with that one.
Why don't you quit while you're ahead, old chum?
Oh come on, this is just the same old Jas.
Sometimes you have to have to get your hands a little dirty and dig for the treasure.
I have a quiz for you smart guys, and this is relevant to the situation with UK Lehman pensions coming up short and Paulson bailout.
With all the hundreds of billions now being thrown about, what is the TOTAL ASSETS (fair market value) of:
Hint: I'm speaking of course about the Pension Benefit Guarantee Corp.
How much do they have in assets right now?
I'm heading back to get one this afternoon.
Check craigslist first. Even in my sparsely populated backwater I see nice bikes going for 1/2 retail, or less.
nades writes:
Funny you say that.
Sad thing is, I wasn't being funny!
elvis spotted in tehran...
us 101st to be deployed
Hi ran!
I am from the government. I am here to help you moderate your opinions.
Patriotism is good. Be a Patriot. Watch TV. Stay uninformed.
The economy is strong. Very strong. Keep on shopping. Do not worry.
the very much worst outcome is to strand our Military Industrial COMPLEX OVERSEAS
Currently Smoking Cannabis:
(On Ford being added to the no shorting list)
OK...screw it. You guys win. I'm out. I'm done with this culture and society.
Crony capitalism at its finest, m'man.
Anyone know if the cliffs at Dana Point are high enough to kill you? Or would a jumper just jack his legs up?
What about the Coronado or Vincent Thomas bridges?
SoCal seems to be a bad place to jump.
Does anyone read Mike Morgan's website frequently and/or is anyone familiar with him?
According to a very bearish writer on the Internet, he was close to bankrupt early this year.
Take it with a grain of salt from somebody on the Internet.
o difference between democrats and republicans?
maybe..and i know many dems who have committed many sins
but match me a repub who has said something like this...
"Monday after Senate Banking Committee Chairman Chris Dodd, D-Conn., said he wants the government to receive a stake in the companies helped by the rescue.
Dodd told CBS's The Early Show on Monday that taxpayers should be "first in line" to get money back once conditions in the industry stabilize and recover.
"We want oversight," he said, adding, "It's important that we act quickly, but it's more important that we act responsibly."
Senate Democrats are also calling for the plan to include aid for homeowners struggling with mortgage payments and caps on executive compensation."
cbs news.com
i await your quote
PeakVT,
I live in San Diego and for what ever reason it is bikes sell for a lot on craigslist. Sometimes as much as retail. I kid you not it's bizarre. I appreciate the thoughts tho.
I'm going to sell my '06 Lemond on it tho. I hope it will fetch a bunch.
Anyone interested, I'll make a special CR poster deal!
.....
sorry if this has been discussed recently--i did see it here yesterday. did bush want to privatize social security to bail out the ibs? on reflection, i think so. if he succeeded with that, the deluge would have occurred on somebody else's watch.
FIRST
Yep, Bush is the the ten trillon buck man, but they ran out of funds and so.....
no brain!
Debt = $144,000 per household
$6k a year in interest payments to each family income at 4% rate (for the time being).
Median income (for the time being) is $45,000 per household.
That's about 13% of gross income.
What about the Coronado or Vincent Thomas bridges?
The Coronado will definitely get you...
....
ades ... what size frame? setup?
Anyone know if the cliffs at Dana Point are high enough to kill you? Or would a jumper just jack his legs up?
Don't die now, man, you're just about to see the maggots (fat, white, spineless) suffer!
"the very much worst outcome is to strand our Military Industrial COMPLEX OVERSEAS"
beats having the trigger-happy goons stateside.
Outsider wrote: "By the way, did everyone realize that most Americans support the bailout?"
The CNN story you link to suggests only that they want the government to do something but not necessarily a trillion dollar giveaway.
Which is a very different thing.
"Yeah, Doc, I want you to fix my broken arm. I'm not crazy about the whole amputation thing, though, that seems like overkill."
Are TIPS a safe place to hide from this madness? Anyone?
republicans are just the same as democrats???!!!
May 1, 2000
5:13 p.m. EDT (2113 GMT
WASHINGTON (CNN) - President Bill Clinton said Monday that the United States would pay off $216 billion in debt this year, bringing to $355 billion the amount of the nation's debt paid down in the three years since the government balanced the budget and began running surpluses. In a written statement, Clinton said the $216 billion payment represented the largest debt paydown in American history, and he said that the federal government's long-term debt is now $2.4 trillion lower than projected to be when he first took office.
csc, hit torrey pines. couple o'good hundred footers should do the job
Hint: I'm speaking of course about the Pension Benefit Guarantee Corp.
I don't know the numbers on the assets but I do know they were expected to blow a $200B dollar hold in the governments balance sheet.
I also remember they shifed more of their portfolio into stocks a while ago. Kind of a "double-down" moment.
If you read the statements from the trustee (chairman) of the PBGC he pretty much knows that it's a sinking ship.
Funny thing is that even with 200B most of the people in those plans will be facing 50% cuts.
mal,
I forecast the future as best as I can based on my read of history. Democracy turns into a very bad system towards the end. Remember Greece? Poor Socrates!
I could be wrong, but I try to tell as I "sees" it.
Best to all.
Jas
trek,
I was wrong its an '05
404 Not Found
Getting it tuned up tonight...
.....
Short GOP
Does the 9.727 trillion include the burden taken over from Fanny and Freddy?
CR, you lose if Bush implements his new accounting standards: moving the decimal place to the left 3 or 4 digits.
BTW, do the new debt numbers include FNM/FRE/AIG/LEH/YADA/YADA/YADA?
beats having the trigger-happy goons stateside.
Did you not see my link from the last thread?
Once Upon a Time...: No, You're Not Crazy
George DEBTya Bush
"Does the 9.727 trillion include the burden taken over from Fanny and Freddy?"
No, they took a 79.9% stake so they wouldn't have to bring it on the books.
sorry, didn't get to the last thread yet merciless, unfortunately I'm employed.
but Arthur Silber's a national treasure imho.
mock turtle -
I would run a budget surplus if the dot com bubble dropped in my lap too.
I commend Clinton's economic policies, but that's more about good timing.
beats having the trigger-happy goons stateside.
ran
hey ran GFYS....
.......
Don't die now, man, you're just about to see the maggots (fat, white, spineless) suffer!
Byzantine_Ruins | Homepage | 09.22.08 - 7:47 pm
I have waited a long, long time for Babylon to fall. But I do think it is time to evaluate a strike. I will be discussing it with the wife tonight.
Default on everything. Walk off into the sunset. And live like a nomad. The cost of doing so is approaching net zero.
I am effing done with this shit. I have no confidence in the gov, our money, or our future. Might as well embrace it and walk that path on purpose.
up thread asked about save haven and TIPS
TIPS probably better than equities
(probably as in its hard to know)
i prefer cash (in hand)
also, CDs (certs of deposit fdic insured)
gold sparkles, or swiss franks
(dollar destruction)
own rural or suburban property outright and have a garden
also i hear you will be able to trade ammunition for rice at the exchange rate of 147 grains of 9mm lead for an equal number of grains of rice
thanks for the stock tip nades, I'll check it out.
Just to help people with rich's little quiz:
PBGC Budget, Performance, and Planning (PBGC.gov)
http://www.pbgc.gov/docs/2007_annual_report.pdf
Anyone else think that the language used was intentionally inflammatory to buy time for GS/MS??? This Fri/Sat/Sun will be interesting days indeed!
"...pending a statutory five-day antitrust waiting period..."
From an earlier thread:
"...California began waiting periods for gun purchases and crime went up. So they increased the waiting period and crime went higher..."
Comrade CSC,
"SoCal seems to be a bad place to jump."
Look to the east. Go up into the National Forest in Azuza. Plenty of High cliffs. You'll definately kill yourself jumping there.
Nostrovia,
I commend Clinton's economic policies, but that's more about good timing.
Everything is about timing. But some things are more accidental than others. Is every successful investor lucky?
RE; Go Long on Bicycles:
I live in Atlanta--90% of the gas stations in Atlanta are completely out of gas tonight. There are huge lines at the stations that do have gas. I guess we are getting the welcome to the USSA treatment here.
A guy jumped off our balcony at work a few weeks ago, so I can report with confidence that 26 stories is definitely enough.
CR,
I have never read a post that has had such a happy feel to it.
I can feel your joy!
Comrade Misean: Thank you for the guidance. You are a 'giver.
LOL, at least you've got a sense of humor! cheers!
....
Everything is about timing. But some things are more accidental than others. Is every successful investor lucky?
yeah, me and my 10 sold-at-a-loss LEH put contracts can speak to that.
the greatest failing of humanity is its failure to understand the exponential functio
I am effing done with this shit. I have no confidence in the gov, our money, or our future. Might as well embrace it and walk that path on purpose.
Currently Smoking Cannabis
Man, that would be a total mistake! We need more neighbors like you to help chill us out and keep us sane (and chuckling)!
Mock,
Scary words, and I can't tell whether they're in jest. Like the joke headline trend earlier today, fact has become so warped that it's hard to distinguish it from fiction.
I'm frightened of cash in hand because of a weimar scenario. I'm afraid of inflation protected treasuries because the government has been backed into a mad dog's corner and might do a universal default.
I'm frightened of owning a farm and land because that's the first thing they'll loot when things get desperate.
I'm frightened of guns because that gives the police an excuse to confiscate or murder me when serving a warrant.
I'm frightened of living because I don't know what strange roads this country will walk.
I'm frightened of dying because I cannot say what strange dreams may come.
Obama can top that, I'm sure. His health plan alone is a cool trillion.
Yeah, but at least you know... you get something in return.
I live in Atlanta--90% of the gas stations in Atlanta are completely out of gas tonight.
I live in a decaying northeastern metropolis that happens to be a major transshipment point for petroleum. Despite an ideal strategic location, I noted that half the gas pumps at the local fuel dispensary were "temporarily out of service".
Good thing the media is well-trained to report it as panic buying or I'd say we were having an acute petrol shortage here in America.
unlike the financial crisis, the increase in the debt has all been by design
to understand, you need to separate the two, even if the financial crisis does have, for Bush and conservatives, going back to Reagan, the ancillary salutary benefit of increasing the national debt
one of the core neoliberal strategies implemented by Reagan, Thatcher and even someone like Pinochet in Chile, was to reduce taxes while passing government services to the private sector as much as possible, while cutting taxes
in Chile, Pinochet was even able to pass the Chilean version of Social Security to the private sector in the form of retirement accounts, although it required a military dictatorship to do it
as David Stockman revealed, the goal was to make it impossible to use the government to pursue any kind of social program by depriving it of the revenue to do so
the goal was nothing less than to make it impossible for the government to pursue an agenda of urban empowerment like the Great Society, or even the safety nets of the New Deal
and, in a best case scenario, the creation of pressure to destroy, through privatization, as Pinochet did in Chile, the most revered accomplishment of the New Deal, Social Security, and thus, permanently drive a stake through the heart of FDR
Clinton reversed this, and the prospect of success in paying off much of the national debt in a subsequent Gore administration may explain why the Republicans, and the specific capital interests behind them, were so desperate to prevail during the Florida recount, because, if they had lost, they faced the prospect of a government flush with the resources to do all the things they hated, deal with the environment, reduce the cost of education, confront poverty, subsidize health care, etc.
there has been discussion as to how 9/11 has been used to justify American military intervention around the world, and the curtailment of civil liberties generally, less so in regard as to how it provided an excuse for Bush and Cheney to return to the grandiose aspiration of defunding the government pursued by Reagan
interestingly, the most vehement opposition to it has come from far right Republicans, not Democrats, who, by and large, seem totally oblivious to what the finance capital interests behind the Republicans are seeking to achieve
paradoxically, the current financial crisis both helps and hinders their cause, it helps, quite obviously, by exploding the debt beyond the wildest dreams of the financial ideologues, it hurts, by exposing the fundamental hypocrisy behind the entire scheme, and the underlying class fissures that have heretofore been concealed
mock- big garden- turtle writes:
no difference between democrats and republicans?
maybe..and i know many dems who have committed many sins
but match me a repub who has said something like this...
+++++++++++++++++++++++++++++++++++
...
Thirty-one House Republicans sent a letter to Paulson and Federal Reserve Chairman Ben Bernanke, asking them to stop using federal funds to save private firms.
Nation & World | Fiscal conservatives declare free market dead | Seattle Times Newspaper
Anomyous -- I have been wondering the same thing. I have roughly 15% of my portfolio there.
I had the same thinking.....some protection against inflation (even if we know the CPI is gamed by the gov't), and supposedly you have protection against deflation if you hold to maturity.
Now somebody correct me if I'm wrong, but would TIPS perform better than T-Bonds if interest rates start zooming up?
Is my reasoning is too simplistic?
Brad DeLong had a funny post in which he said in effect that Bernanke and Paulson are trying to avoid making the mistakes made in 1929, by Arthur Burns in the 1970s, and by the Bank of Japan in its crisis. Rather they are determined to make their own new and original mistakes. LOL.
Hold a rifle in your hands while you read the news. It will make you feel better
"The economy is strong. Very strong. Keep on shopping. Do not worry."
Reminds me of "They Live." I wonder if you put the right kind of sunglasses on whether Bush & Co. look like the alien undead, too. I guess Paulson's halfway there already.
I commend Clinton's economic policies, but that's more about good timing.
friardaddy | 09.22.08 - 7:53 pm | #
hummmm
interesting
so since 1980 nother president has been LUCKY enuf to have the good timing...
sad, just a quarter century of republican bad timing i guess
pure coincidence that bush2 and reagan ran up more debt than all other american presidents put together.
since gerald ford, bill clinton is tthe only president who ever (EVER) submitted a ballanced budget to congress...period.
420 Visitors Online
CSC it's a signal. Do not end it just yet.
Default on everything. Walk off into the sunset. And live like a nomad. The cost of doing so is approaching net zero
I did it a couple of years ago. It's funny how unmotivated you can become when you enter a certain remaining time horizon and see things how they really are.
I care very little about my job anymore, seeing as our "free market" fanatics have trashed them all and made employment both unpredictable and highly political.
I don't check my mail anymore after I discovered the post office felt a right to jam tons of unsolicited garbage in my face.
I pay cash for most things, I no longer desire to own a house, a new car, or even television. I've discovered that most women in my age range are undesirable and so that led to the discovery that a great deal of economic activity is really about sex... attracting the opposite sex - clothes, house, flashy car.
My cash flow now quite good, I have over $3K per month in disposable income and I blow in on restaurants, or trips and I don't worry abou the future much now because... i don't see one.
Haha, I just heard Obama wants Paulson to stay if he gets elected. He's not very confident in his own pick is he?
Vote for PUTIN/PALIN in 2008?
CSC, it's the dope talking. No, I don't mean Dubya. Find a new drug. One that won't make you sick. One that won't make you crash your car, or make you feel three feet thick.
I recommend good quality champagne, in moderation.
Remember Greece? Poor Socrates!
Socrates was a traitor who sided with those who militarily attacked the Athenian democracy. His basic philosophy on government was "it is the job of rulers to give orders, and the job of the ruled to obey them".
Poor Socrates, my ass. The guy was undemocratic scum.
Pas: Thanks for writing that. Many will think I am joking.
If we only have x left, how do we want to spend it? Clinging to a reality that is no longer there?
Mrs. C and I will be contemplating exodus.
Comrade rich,
Yes, the DBP's are the bomb with a lit fuse.
And most don't understand that the PBGC does NOT make the pension whole. They determine what it can pay and adjust pensions accordingly.
Nostrovia,
Actually dope is an anti-depressant. They are working on a thc anti depressant pill...
"I recommend good quality champagne, in moderation."
Fuck that, Food4Less has Gallo on sale for $2 a bottle.
Whatever bailout passes, US is turning out to be a land of sheeples. First everyone buys into the american ideals. Then everyone buys an american property no matter how much debt. Finally everyone commit their children to pay for wall street. Sheeples, let me hear BAAH!
To JonJ:
Mike is very, very good and his options program is excellent. His record is amazing.
He has three programs: one for clients with $250k to play with, another for smaller clients, both of these are option programs, and then another for general investors who don't have the time to do daily trades. Go here to find out more.
https://www.paypal.com/cgi-bin/webscr?cmd=_xclick&business=mike%40morganflorida%2ecom&item_name=375CC&item_number=375CC&amount=375%2e00&shipping=0%2e00&no_shipping=0&no_note=1&tax=0%2e00¤cy_code=USD&lc=US&bn=PP%2dBuyNowBF&charset=UTF%2d8
DeMint Opposes Wall Street Bailout
Plan does not solve the problems that caused the current credit crunch, and could make them much worse
September 22, 2008 - Washington D.C. - Today, U.S. Senator Jim DeMint (R-South Carolina) announced his opposition to the $700 billion plan proposed by the Bush Administration to bailout Wall Street.
"After reviewing the Administration's proposed bailout plan, I believe it is completely unacceptable. This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy. This plan fails to oversee or regulate the government failures that led to this crisis. Instead it greatly increases the role for Secretary Paulson whose market predictions have been consistently wrong in the last year, and provides corporate welfare for investment firms on Wall Street that don't want to disclose their assets and sell them to private investors for market rates. Most Americans are paying their bills on time and investing responsibly and should not be forced to pay for the reckless actions of some on Wall Street, especially when no one can guarantee this will solve our current problems."
"This plan will not only cause our nation to fall off the debt cliff, it could send the value of the dollar into a free-fall as investors around the world question our ability to repay our debts. It's also very likely that this plan will extend the cycle of bailouts, encouraging other companies to behave in reckless ways that create the need for even more bailouts, triggering an endless run on our treasury. This plan may make things look better for Wall Street in the next couple months, but the long-term consequences to our economy could be disastrous.
"There are much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn't want anymore. We should start by reforming government policies and programs that created this mess, including the Federal Reserve's easy money policy, the congressional charters of Fannie Mae and Freddie Mac, and the Community Reinvestment Act. Then Congress should pass a number of permanent and proven pro-growth reforms to encourage capital formation and boost asset values. We need to make permanent reductions in the corporate tax and the capital gains tax rates. We have the second highest corporate tax rate in the world, which encourages companies to take jobs and investment overseas."
"It's a sad fact, but Americans can no longer trust the economic information they are getting from this Administration. The Administration said the bailout of Bear Stearns would stop the bleeding and solve the problem, but they were wrong. They said $150 billion in new government spending using rebate checks would solve the problem, but they were wrong again. They said new authority to bailout Fannie Mae and Freddie Mac would solve the problem without being used, but they were wrong again. Now they want us to trust them to spend nearly a trillion dollars on more government bailouts. It's completely irresponsible and I cannot support it."
there has been discussion as to how 9/11 has been used to justify American military intervention around the world, and the curtailment of civil liberties generally, less so in regard as to how it provided an excuse for Bush and Cheney to return to the grandiose aspiration of defunding the government pursued by Reagan
Word.
CSC, you can buy citizenship in Belize for $15,000 and a nice property for even less. The place is heaven and I'm going to flee there soon.
Comrade CSC,
"Comrade Misean: Thank you for the guidance. You are a 'giver.'"
I'm not passing any moral judgements. Just trying to be helpful. Of course I'd prefer you not do it. But it's your life, do as you see fit.
Nostrovia,
He said this a couple of days ago and I thing that ihas one of those foot in mouth "lipstick" moments . He really need to come out and carefully slam Paulson -
"Haha, I just heard Obama wants Paulson to stay if he gets elected. He's not very confident in his own pick is he?"
Outsider writes:
By the way, did everyone realize that most Americans support the bailout?
I'd be very curious how the question was phrased. CNN polls are notorious for push polling tactics which make results highly suspect.
Anonymous | 09.22.08 - 8:08 pm
I spent time around Blue Creek in the Northeast, as well as quite a bit of time in San Ignacio.
I love Belize. I had no idea the cost was that cheap to immigrate there. THANK YOU.
Is there an English website for Belize real estate?
I believe he wanted to keep him on during the transition period. With that large a mess, it will take time to hand it over to someone else.
Time's up!
Here's the answer to rich's quiz for those who were playing along at home. Unit of account is $1mm.
http://www.pbgc.gov/docs/2007_annual_report.pdf
Financial Position
SINGLE-EMPLOYER AND MULTIEMPLOYER PROGRAMS COMBINED
Item 2007 2006
Total Assets $68,438 $61,138
Total Liabilities $82,504 $80,019
Net Income $4,815 $ 4,230
Net Position $(14,066) $(18,881)
Yes, Belize is lovely. Unfortunately, I have an 89-year-old father and a 19-year-old daughter, both of whom I love, and both of whom need me.
If I can hold out for a few more years, then, maybe...
You can't count the Paulson plan because the taxpayer is going to get that money back!
Ahh, I kill myself...
friardaddy: I commend Clinton's economic policies, but that's more about good timing.
Not so on timing. Clinton did his tax raise in 92 (not ONE GOP voted for it) and only got it passed by one vote in the House and with Gore's VP vote in the Senate. The GOP tortured him over the tax raise in the 94 elections, costing him control of congress in 94 and 96. From then on, he was hostage to GOP (remember Gingrich?) attempts to disembowel the government and get back to pre-FDR times. From 94 to 2006, the GOP ruled supreme in Congress and with Bush after 2001, did exactly what they liked (started a war and funded it with debt, and cut taxes multiple times, castrated regulation of all kinds (including the financial industry), and generally spent far more money than taxes raised. Remember that voodoo economics that said you increase federal revenues by cutting taxes (with no exceptions).
I love Belize. I had no idea the cost was that cheap to immigrate there. THANK YOU.
Don't mention it. I'm glad I could inform. Try to stay away from the "scenic mountaintop" properties. They're cheap and neat, but water is a bitch.
some talking head on cnbc told me earlier there would be no inflation...Everything is fine now...
Did Japan open yet, they probably shouldn't bother.
sue writes:
Did Japan open yet, they probably shouldn't bother
ouch
Back on topic...
If you do not subscribe to the Wall Street Examiner, I suggest you do.
There you will learn things, such that THIS WEEK, the Treasury will issue $98,000,000,000 in new bonds.
That is an annual rate of over $5T.
$10T is so in the bag.
sue writes:
Did Japan open yet, they probably shouldn't bother.
Holiday. They know when to take a day off.
I love how everyone, wants some equity in the banks in exchange for shitty assets, we are now willing to take shitty equity now for shitty assets. Paulson is riding the A Bomb down just like slim pickens.
As someone who grew up in an urban area despoiled by the Great Society and staffed by Great Society era do-nothing bureaucrats kept in power by union bloc voting until the place fell down around their ears, I have to say that the pining for the golden days of the New Deal are real knee-slappers. You can come and tour a selection of our municipalities with 20% debt burdens on their public budgets.
Ahh, how history seems better when we re-invent it. You guys are gonna have to do a little better than the welfare state. There's a reason people rejected it.
CSC-
look into the yucatan area of mexico (inland, not the tourist shit). nice folks, beautiful country, cheap RE. we are seriously thinking about bailing there. it was originally supposed to be 5 or 10 years from now, but......
(CNN)Quick Vote
Do you agree with the Bush administration's decision to spend $700 billion to bail out the financial system?
Yes \t31% \t82728
No \t69% \t184496
Total Votes: 267224
Many will think I am joking
I understand where you're at.
I'd like to leave the US entirely but I haven't managed to make it happen yet on terms I like.
There's quite a bit more I could write but it would border into questionable material from a legal and personal standpoint.
I own almost nothing now. An iPhone which I really like, a laptop, an older car, some clothes. i invest no time or money into this culture now.
Oil. Gold.
The government can remain irrational longer than the citizenry can remain solvent?
Paul Krugman coming up in 3 minutes on Countdown w/Keith Olbermann.
Why are they even bothering with CEO pay? Any firm who needs a bailout should automatically lose their top officers, like AIG and f/f. If they don't leave, then they really didn't need the bailout. The only way to save the country? Yes, from the perspective of an investment banker! I just hate the odds; Paulson negotiating with Frank.
Thanks Rancher. Are you aware if Mike was close to bankrupt earlier this year as someone else mentioned he saw on the internet?
Comrades,
Belize is nice. My father and I own property there. English speaking. Bank privacy.
Could do worse.
Nostrovia,
Anonymous writes: I'm frightened of cash in hand because of a weimar scenario. I'm afraid of inflation protected treasuries because the government has been backed into a mad dog's corner and might do a universal default. I'm frightened of owning a farm and land because that's the first thing they'll loot when things get desperate. I'm frightened of guns because that gives the police an excuse to confiscate or murder me when serving a warrant. I'm frightened of living because I don't know what strange roads this country will walk. I'm frightened of dying because I cannot say what strange dreams may come.
At the entrance to a classical Buddhist garden sit two lions. Their names are Fear and Desire. They are the source of the delusions that keep you out of the garden of enlightenment.
Runners! Begone with you. The only difference between you scamps and the bankers is the the weight of the Republic's treasure your make off with and the location of your Bahrein. Is it any wonder you were overcome, when your first reaction to a crisis is to bolt with a cry of "every man for himself"?
THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated.
Want to play the "weak state brain drain"? Don't think our franchises will be waiting back here for you when you return.
ew thread
Ba de ya - say do you remember
Ba de ya - crashing in September
Ba de ya - never was a debt to pay
Comrade Byzantine_Ruins,
???????????!
Nostrovia,
By the way. Depending on how bad this gets it could well mean the end of the pax americana. Military security, like oxygen is something most people only think about when they don't have it.
CR, I call your 10 trillion and raise you another 2 trillion.
There are only 500 billion stars in the Milky Way. There are 500 billion galaxies.
10 trillion not so much.
I wondered who Paulson reminded me of from an old movie. Thanks to Sue for reminding me of the great scene of Slim Pickens riding the a-bomb to victory. Hank has to feel just like that right now.
Last time I checked, the tax rate in Belize was around 50%. I believe it's still taxed as a British colony, although that's info from ten years ago.
I work for a non-US company now and amusingly they listed me as a British citizen, I have no idea why. We're opening new business in South America next year and I'm hoping to bail out then, probably for good.
???????????!
People who want to abandon the Republic in a crisis? Mead is sweet but bitter when paid for. I don't know how people could leave their homeland benighted and oppressed for a better angle elsewhere without a tyrant's proscriptions compelling them.
Man, good thing the Republicans believe in small government! Otherwise imagine how bad it would be.
Byzantine_Ruins - Sell high, buy low. The U.S. has tax obligations it can't possibly meet. I'm better off in a country with a younger population and lower cost of living if I can manage it.
Plus I'm a better draw for senoritas than American women.
The current National debt is $9.727 trillion (see TreasuryDirect) as of Sept 19, 2008. That leaves the debt about $273 billion short of my projection with 4 months to go.
It was looking touch-and-go there but I knew Bush had it in him.
Who says he's a miserable failure? He sure succeeded on this one, stoopid lie-bruhls.
hmmmm
$700 Billion Dollar Bailout Good For Economy
WASHINGTON (AP) -- It's the largest government bailout in U.S. history and two days after it was introduced to the Americans paying for it, the proposal is still largely a mystery.
Among the unanswered questions: How will the government mop up the bad mortgage debt on banks' books, who will run the process and how much will it cost?
ADVERTISEMENT
Key elements of the plan remain in flux as behind closed doors Democrats demand modifications that would provide more help for ordinary Americans in return for bailing out the country's financial giants.
Are we Argentinos yet?
The page cannot be found
The crisis started on March 20, 2001, after Domingo Cavallo, an economic minister, was given powers to restructure the economy. At that time, the government owed bondholders approximately $132 billion, which it was unable to pay (CNN, 2001). In July 2001 the Argentine stock market fell to a two-year low and Argentinas credit rating was cut. Within a week, [President] Cavallo slashed pension funds and state salaries. From August to November 2001, the government swapped debt with international financial institutions and negotiated with the International Monetary Fund (IMF) for additional loans. In November 2001, there was a run on the banks, leading Cavallo to implement bank withdrawal limits. One week later, he announced that all private pension funds would be transformed into treasury bonds or government backed loans to service debts (BBC, 2001).
my elderly grandmother in Italy got wiped out by the Argentine default in 2001.
"since gerald ford, bill clinton is the only president who ever (EVER) submitted a balanced budget to congress...period.
mock turtle | 09.22.08 - 8:03 pm | #
There were only 3 in between, one (D) and two (R). Have you swallowed any other strawmen lately that you'd like exorcised?
Seriously, blaming this on either party is childish and non-productive.
"People get the government they deserve" - Will Rogers
"The rich will require an endless supply of the poor." - Voltaire
...although we certainly helped support her (good thing she lived in a rent-controlled apartment), it was really awful that in her last years (she died at 94), my grandmother had to worry about money.
If Italy did not have national health care, she REALLY would have been fucked. Just saying.
From the economist lead to last Friday's edition :
Premium content | Economist.com
"This is a black week. Those of us who have supported financial capitalism are open to the charge that the system we championed has merely enabled a few spivs to get rich. But it helped produce healthy economic growth and low inflation for a generation. It would take a very big recession indeed to wipe out those gains. Do not forget that in the debate ahead."
These guys have been wrong wrong wrong for ages about how all this financial alchemy spread risk. They were right about the accelerated growth it produced, but guess where all that wealth got squirreled away?
But you see their tactic now? Look how much finance did for you? The recession we are going to have wont take all that away, therefore, it was still a good idea. B -f-in-S. This is the kind of event that when all is said and done will be shown to be one giant redistributive machine. And that is all. In the boom the wealth gains flow to the rich, and in the bust, the risks taken accumulate losses all around. Then you get a period of below average growth afterwards which leaves you back in a decade where you would have been.
Sickening what that rag has become.
Byzantine_Ruins writes:
As someone who grew up in an urban area despoiled by the Great Society and staffed by Great Society era do-nothing bureaucrats kept in power by union bloc voting until the place fell down around their ears, I have to say that the pining for the golden days of the New Deal are real knee-slappers. You can come and tour a selection of our municipalities with 20% debt burdens on their public budgets.
Ahh, how history seems better when we re-invent it. You guys are gonna have to do a little better than the welfare state. There's a reason people rejected it.
Byzantine_Ruins | Homepage |
09.22.08 - 8:17 pm | #
Check out the economic numbers during the 50s and 60s compared to now, wage growth, income inequality, etc.
it has been papered off with easy access to credit, but now that the punch bowl is being taken away, we will soon discover that people are about to be far worse off than they ever were back then
no more credit, stagnant wages, deflation or stagflation looming over horizon and a completely defunded government
the 1970s will be remembered nostalgically
the urban corruption of the 50s and 60s is nothing compared to what is being implemented, a local manifestation of something that has gone international, on a exponential scale, with finance capitalists instead of labor unions and ethnic neighborhoods as the beneficiaries
and, a lot of places did quite well under that model, for example, California built an enormous amount of its infrastructure during that period, an infrastructure, that, while decaying today, was used to generate a lot of wealth and a good standard of living for millions of people who migrated here
But it helped produce healthy economic growth and low inflation for a generation. It would take a very big recession indeed to wipe out those gains.
I didn't know The Economist had so completely lost their minds, I thought they had been a beacon of sanity during the Bush years.
There's got to be a better way to create a strong economy besides creating bubbles that explode every 10 to 20 years. In 1988 the bailout cost around $200 billion, this time it's going to be about a trillion.
Is it going to be $5 trillion in 2028??? Is this the 'free market capitalism' that the GOP fwap-fwap-fwaps to all the time?
OT-
I had lunch today with some friends who are CFOs and General Counsels for private equity and hedge funds. One of them mentioned that he had drawn down ALL his credit lines last week and stashed the proceeds in TBills. The others reported that they had done the same thing. They also said that they had heard from numerous friends running finance at other funds of their funds doing the same thing.
I guess that explains last week's the bank lending squeeze and zero TBill yields.
Thanks B.ruins for the Paine quote.Tom Paine was once my registered alias.He was a horny son of a gun along with his other virtues.
anyone remember the hot debate in the 2000 campaign about what to do with the budget surplus?
other jim: YES! it was incorporated obliquely into my initial analysis up towards the top of this thread of comments
I agree with the Economist's point of view, that free markets produce more wealth over the long run. The bubble we've seen recently was partly the result of private parties, but most was due to government intervention.
Without FNMA, Freddie Mac, the FHA, the FDIC, borrowers and investors would have had much more incentive to exercise caution. With government incentives to bid up house prices coming from all directions, it's no wonder we had a mega-bubble.
It's a pity for this country's next generation that we will increase the power of government in response to this crisis. "Born and bred dopes". LOL!
CR, since we are now officially on the hook for the FNM/FRE debt and guarantees, isnt it more like $15 T? Ok, maybe you dont count the guarantees, but the $1.7 T of on balance sheet debt of the GSE's should deffinitately be included in the count.
Anon,
Sounds like a very reaasonable strategy to me. TIPS do sort of give you the best of both worlds. Not fail safe though, given the huge increase in debt, real interest rates might rise. (good old rates up, bond price down) However, relative to just about everything else not a bad bet.
So what's the prediction for the next president?
$12T or $15T ?
I know, let's raise taxes on the 'rich'. ROTFL
Better look in the mirror. There are not enough rich but there are enough suckers
3rd party analysis projects McCain's tax cuts will cost another $5 Trillion, comparable to the trillion's that Bush's tax cuts cost. Weren't they supposed to "Pay for themselves"?
$20 Trillion here we go!
The Iraq war could cost US its financial system
Published: September 22 2008 03:00 | Last updated: September 22 2008 03:00
From Mr John M. Coates.
Sir, The US government last weekend decided it could no longer risk taxpayers money by supporting Lehman Brothers and on Monday that bank filed for bankruptcy. In assessing the wisdom or otherwise of this decision one fact should be kept in mind: the International Monetary Fund estimates that the total cost to banks of losses stemming from the subprime crisis will amount to $1,000bn; the cost of the war in Iraq, according to other estimates, particularly one by Linda Bilmes and Joseph Stiglitz, will come to $3,000bn.
The US has shot its financial bolt in Iraq, which may cost the country its financial system. It quite simply no longer has the money to stop a run on banks. Seen in this light, the war in Iraq brings to mind the ruinous decision on the part of the French ancien régime to finance Lafayettes campaign during the American revolution.
John M. Coates, University of Cambridge, Cambridge, UK
It is unbelievable that such dramatic increases in debt can be done with legislation that is only three pages long!!
Web Hosting Services and Domain Name Registration : 1&1 Internet Inc.
Bush will have the distinction of having borrowed the most money with the least return in history.
Save perhaps for a few middle-ages monarchs, on a relative scale.
I made a similar reference to the burgeoning federal deficit in the opening pages of Chapter 1 of my book, Financial Armageddon (first published in March 2007):
"Sometime during 2007 or
2008, the flickering display on the national debt clock will almost
certainly run out of room. The ever-increasing figure will not be
able to fit the extra digit that will pop up when federal government
borrowing breaks the $10 trillion dollar barrier. Unless, of
course, the Durst family, who own the clock in New Yorks Times
Square, decide to upgrade it or there is a sudden bout of fiscal
responsibility in Washington.
"Unfortunately, the odds of the latter are almost certainly nil."
I assume penalties for early [401k] withdrawal, tax rate increases will increase, even on top of decreased earnings.
This reasoning (which I share) is why I've warned everyone who will listen not to convert their 401(k)'s into Roth IRA's. (Opening a Roth is fine; converting into one is not). Not even when the 2010-11 "window" comes along that allows one to spread the taxes owed over two years.
It's true that tax rates are almost certain to be higher when most of us retire 15-30 years from now than they are today. But it's also true that the so-called "tax advantage" of a Roth - the ability to withdraw principal and earnings tax-free at retirement - only exists because of the generosity of a past Congress.
And - in the words of Ric Edelman - "what Congress giveth, Congress may taketh away."
And they will ... you can almost bet on it. Congress will eventually (a few years after the bulge of conversions in '10-'11, of course) give themselves permission to "double-dip" taxes from your Roth. Initially it will apply only to those with high incomes, of course, so that they can put a nice populist spin on it.
Sigh.
I only hope that we, as individuals, can do enough to prepare for the changes that will come down from this financial crisis! One part "don't put all of your eggs in one basket," one part "cross your fingers and pray," and one part "do the best we can to get the least-of-all-evils in office."
BDiego writes:
3rd party analysis projects McCain's tax cuts will cost another $5 Trillion, comparable to the trillion's that Bush's tax cuts cost. Weren't they supposed to "Pay for themselves"?
$20 Trillion here we go!
BDiego | 09.23.08 - 2:38 am | #
No, they weren't. We were just supposed to believe that they would.
The bubble we've seen recently was partly the result of private parties, but most was due to government intervention.
LOL!
Who, pray tell, manipulated the government intervention? Who actively sought the legislative and policy changes that were exploited to inflate the bubble?
By this standard, Hitler, Mussolini and Tojo were partially responsible for World War II.