Wow. First Chrysler, now this. What is coming up next?

Tenth?

CR: The article notes that the government is trying to limit this program to new loans only, and not for refis of existing business loans.

How will they be able to tell the difference?

god this depression is depressing

I thought Paulson tried to "float" this one already.  Something about 4.5%.  I think the trick was get a "new" house at 4.5 and default on the old.

Elvis:
this one's for you.
University of Michigan Law Student Should Have Come to ATL First - Above the Law - A Legal Tabloid - News, Gossip, and Colorful
Commentary on Law Firms and the Legal Profession

This is idiotic.

Starter is broken.

Well I have a couple businesses that I would borrow to the hilt to pay myself out a nice salary. Then let the business default and walk away. Sounds like a great plan to me.

Seriously, I am trying to think what we have bought that was made in the UK in the last 5 years. Not counting when we were there.

Cucumbers

who can convince the people?

~~~~

God or a like facsimile ...

Seriously, I am trying to think what we have bought that was made in the UK in the last 5 years.

Burberry? Aston Martin?

made in uk:
new castle?
guiness?

made in great britain:
tanqueray!

Anyone know what percentage of U.S. households do NOT carry any revolving debt?

It's not easy to parse via google.

My follow-up question is: Besides the top 5% of wager earners, is their any organic income growth over the past 10 years?

I have a new porn business I want to start in London, so this is great!
Anonymous | 12.17.08 - 10:35 pm

Well, you will need to import attractive women.

"I'm a free market guy," Bush said. "But I'm not going to let this economy crater in order to preserve the free market system."

Somebody should explain to Bush that if we had free markets we would not have had the Internet bubble, the housing bubble or the commodity bubble because in free markets the Federal Reserve would not have been able to set artificially low interest rates in order to generate economic growth by encouraging extreme risk-taking behavior.

If we had free markets, the economy would have gone into recession in the late 90s and this whole mess would never have happened.

Is there really British Porn? I mean that does not involve spanking?

German porn. Sex without showering before and after.

ac..

while you and i may disagree often enuf

i have to say amen to your comment above about artificially low interests rates

and that a recession would have been good for the system

can we have market forces and reasonable levels of investment, and bank regulation?

(and enforcement)

The most Off Topic post, EVER (LOL):

Info on the pron business:

In good times and in bad, sin sells; booze, tobacco and sex have all weathered countless economic storms over the centuries.

This recession is a little different, though. It's been extremely challenging for adult filmmakers, who are not only wrestling with anemic consumer spending, they're also competing with a nearly infinite supply of free, amateur videos from countless user-generated sites, not to mention a glut of traditional inventory.

"From my experience, as long as I've been in this business, this is the first time I can say that we're absolutely feeling the effects of the economy," says Steve Orenstein, president and founder of Wicked Pictures, and a 29-year veteran of the adult-entertainment industry. "There was a line we used to use about this business being recession proof. When people talked about the economy, we'd say our business is fine. But look, now you'd have to be blind and deaf not to see that there are problems."

Orenstein hasn't cut any pictures out of the production pipeline -- he still plans on making 48 films this year because, he says, cutting back on pictures would only cut back on his profits. He is, however, looking at ways to reduce expenses, especially since he's facing increased oil-related costs for transportation, distribution and for DVD cases, which are an oil-based product. And raising prices to cover the added costs is out of the question, given the economic environment.

"We haven't laid anyone off or cut any salaries, but we're trying to be smarter -- cut the things we probably should have cut ten years ago," says Orenstein.

Turns Out Porn Isn’t Recession-Proof | Epicenter | Wired.com

ac..

(and enforcement)
mock turtle

BTW, let me just reiterate, when I say "free market" it's not that I'm anti-regulation, I'm against the government trying to regulate the business cycle.

I think it's perfectly reasonable for the government to do stuff like setting rules that limit leverage. They've shown that they can do stuff like this effectively.

On the other hand, I see no evidence that the government can effectively regulate the business cycle. In fact all the evidence I see suggests that their attempts to do so typically make things worse (especially when it involves manipulating credit).

Honestly if I felt there was a compelling case that the government could create growth that was sustainable in the long-term using these quick stimulus methods, I'd have to support it. I don't see it though.

And all the people that seem to be making the best predictions are Miseans, not Keynesians. So I have to assume their theories are more valid.

That's just basic scientific method...

I don't know about porn stars, but the model who wouldn't take dollars any more was a canary in the coal mine. Seems like ancient history.

homedad43 writes:
Nova:
Thank you.

Werner writes:
New Government Scheme to Restart Business Lending

Are these the new "Wunderwaffen" ?
Werner | 12.17.08 - 10:54 pm

I will translate for you. "wunderwaffen = miracle or wonder weapon." He is referring to the V2 rocket, panzerfausts, und Zyklon B, during his idea of Germanys golden age. Or he may have meant waffen ss. I am not sure.

The article notes that the government is trying to limit this program to new loans only, and not for refis of existing business loans.

Does that even make sense?

Morgan Stanley is already issuing new FDIC-backed debt and buying back old uninsured debt. How will Chancellor "Don't Call Me Darling" avoid the same scam, or more complex funding arrangements that achieve the same end?

Gotta love all the government "schemes".

I have read that there are very large numbers of applicants for pole dancer positions, due to the recession.

I'd volunteer to do some follow up research, but my wife has an irrational distaste of knowledge for its own sake.

So, long pr0n, booze, smokes and rocknroll?

Hodcoodanode!?

C

PS: John Lee Hooker's deep study into this phenomenon:
YouTube - Whiskey & Women

the idea that you can make the economy grow simply by expanding the money supply.
ac | 12.17.08 - 11:07 pm | #

I accept that as a truism, but it leads to volitility in expansions and contractions.

Re: attractive women, eastern europe, and pole dancers. There are some great looking Polish young women at a place near O'Hare. I knew something was up when four friends picked me up at the airport.

Time to start a UK based hedge fund and borrow money as seed capitial..woho!

cd - confirmed no Medicaid ar 54k

the idea that you can make the economy grow simply by expanding the money supply.
ac | 12.17.08 - 11:07 pm | #

I accept that as a truism, but it leads to volitility in expansions and contractions.
Blackhalo

If that's a truism then shouldn't Zimbabwe and Argentina should be the richest countries in the world?

Does Zimbabwe have 80% unemployment simply because this is just a down cycle on their way to the next boom? Their money supply certainly is expanding.

If I understand what you're saying correctly, aren't these countries counterexamples to your claim?

That's OK.
We can give the POM's 20 bucks for the Malvinas.

Nemo posted a couple threads ago:

Any (oil prices -- sd) article that does not mention futures prices beyond the front month cannot be taken seriously. That is some serious contango. Theories?
Nemo | Homepage | 12.17.08 - 4:18 pm | #

Looking here at Light Crude Oil (Pit) Futures Prices / Light Crude Oil (Pit) Quotes  helpfully provided by Nemo, the number that leaps out is the oil future price for November 2011. What the heck is that telling us?

Thanks. 'Nite, all.

. . . there are some great U-tube stories on money as debt, or the Goldsmiths tale.
Blackhalo | 12.17.08 - 11:19 pm

The youtube version of Paul Grignon's classic comes in pieces. This video is the full length version:

Google Videos Error

It should be required viewing in K-12.

[Bush on Fox:

"I'm a free market guy," Bush said. "But I'm not going to let this economy crater in order to preserve the free market system"]

So, what happened to "The fundamentals of the US economy are strong" ?

No one pays any attention to that imbecile.

ac wrote

Again if deregulation were really the cause, why are countries that are more regulated that the US having similar problems? China, for example, still has it's own version of Glass-Stegall. I don't think you can blame a housing bubble in Spain on Phil Gramm.

--

ac

i can not explain spains real estate boom in any detail . i do know that as a percentage of gdp spain had one of the highest if the the very highest current account deficit of any of the g-20 nations

also spain had interest rates well below inflation rate for several years, and this related possibly to manipulation of the euro

but on the other hand i do argue that the demise of glass-steagall (part) that regulated investment banks separate from savings banks was a major contributing factor to our present financial crisis

i would also argue that failure to regulate credit default swaps as a form of insurance was also indicative of the kind of major contributing regulatory breakdown that was a factor in bringing about the financial crisis

and i would say phill graham and charles schumer are near the center of the list of congressional critters responsible

(btw, i dont hold clinton responsible because the vote was 92 to 2 in the senate and almost as lopsided in the house...veto proof

and he was not about to piss off the senate that was trying him...his hand was weakened (by his own immoral behavior!)

How come they all think that the problem is lack of lending?

Can't they understand that borrowers are so stretched that it is lack of willingness to spend that is the cause of the problem..

Or is it that they do not want to accept this?

I Dunno ... these policy makers just DO NOT INSPIRE CONFIDENCE IN THE WAY THEY ARE HANDLING THIS MESS

yes excessive capacity

but would also argue gross mis-allocation of capital into financial services

I have a car dealer buddy. They have a council where they meet with other local dealers and comiserate. A universal theme is good buyers either come in with financing lined up or cash. Not many. The prospects that come in with the intention of borrowing are ALL getting turned down for poor credit or poor DTI.

Those that need credit are in no position to borrow and those that can get credit don't want it. This isn't a credit crisis. It's a debt crisis and a wage crisis.

[)--General Growth Properties, Inc. (NYSE: GGP - News) announced today that its syndicate of lenders for the $900 million Fashion Show and Palazzo mortgage loans has entered into a Forbearance and Waiver agreement that extends until February 12, 2009.]

Is this a CDS trigger?

Just when I thought the 50 billion ponzi scheme was too much...

Siemens scandal

Premium content | Economist.com

I'm finding it hard to read CR lately. I'll see more dismal news and feel a visceral clutch of fear in my stomach. I'm scared for my kids and me and for all of us, and there's just not much I can do besides watch this train loaded with toxic chemicals, nukes, and bio weapons tumble off the track and erupt in a fireball. No matter what any of us does at minimum we'll be sucking in those fumes, if not consumed by the blast.
It is literally giving me a stomach ache. I wish someone plausible would tell me I'm worrying for nothing.

Jes,

To quote Ayn Rand: "Don't worry, it will all work out somehow."

Oh wait, I'm quoting her villain!

Jes, Kudlow can be plausible at times.

Madoff Scandal Shaking Real Estate Industry - NY Times
Madoff Scandal Shaking Real Estate Industry

Mock/ac:

Totally OT except it isn't at all--there's an interesting discussion in Mike Davis's Late Victorian Holocausts on "The Crisis of River Conservancy" in China. Some excerpts (from pp. 366-369 of the paperback edition):

Sedimentation in the Yellow River Delta is a problem in hydraulic control that dwarfs the challenge of all other civilized rivers except perhaps the modern Mississippi.... Deposited on the nearly flat north China plain, the sediment will either force the river into chaotic and rapidly changing meanders like a great writhing snake or, if the channel is constricted by human engineering, will lead to the rapid buildup of the riverbed high above the plain...."

"There were, in fact, two warring schools about how to tame the Yellow River. One school of river managers wanted to confine the river between high, narrowly spaced levees to maximize its channel-deepening power and emancipate more floodplain for tillage, while the other advocated lower levees set five to ten kilometers apart."

The two approaches are seen to reflect conflicting philosophies, with the former approach corresponding to "a Confucianist tendency to curb nature" and the latter to "the Taoist approach of letting nature follow its own course."

Neither approach is entirely successful, of course--the Taoist approach brings frequent floods; the Confucianist approach typically means a longer mean time between floods but the floods when they come are particularly disastrous, often involving the river moving hundreds of miles laterally.

But it's this passage that seems especially resonant today, at least to me:

"In 1800, the Yellow River flood=control system...was more than 200 years old. As Randall Dodgen points out, the river 'had gone longer without a change of course, but it had never been held in one course for so long by dint of human labor and engineering.' It was the singular misfortune of the Qings that this inescapable hydraulic cycle, which in its final stages entailed almost geometrical increases in the costs of dike construction, reached its crisis point in coincidence with economic recession and the most destructive civil war in history. Already by the early 19th century, more than 10% of the Imperial budget was devoted to increasingly desperate efforts to control the path of the Yellow River."

I don't find argument by analogy and metaphor particularly satisfying, but still....

Thanks, kids! You made me laugh.

Jes

i wrote nearly the same comment, in august two years ago

been suffering since, just as you describe

sometimes the truth is hard to handle

maybe you still have time to brace yourself

there are several ideas to be found from time to time on these pages

personally i favor getting debt free, saving up cash, and learning some trade and self sufficiency related skills

im sorry for the angst

More from cbpp.org - states slashing education in revenue difficulties:

Center on Budget and Policy Priorities

Mid-page links are worth exploring, including the jobless and poverty numbers (10.3m people).

My experience suggests that lax responses to poverty, nutrition, and education, set up generational under-performance of those who might otherwise have been carried through hard times by gov programs but who are stunted, less smart, less employable, have risk aversion to the cost of education at many levels. It has huge ramifications for girls' education, empowerment and making choices about conception and family size, and thus participation in the workforce. So it would be good to move on beyond the idea that social spending is a deadweight loss to the economy, but is more like investment and harm reduction. Seems to work for the nat sec'y business.

If this system fractures at state and muni level the results will be felt for a generation.

And I'm a furriner. I'm just reflecting experience from the last severe recession I saw. It was not pleasant...

C

Henry Kissinger stated the premise succinctly in 1970: "Control oil and you control nations; control food and you control the people."
---------------------------------------
Glib, but not necessarily true. That kind of control can be wrested from you.

My "CR new post" spider-sense is tingling.

Since 1984, though, we've been steadily increasing debt/GDP even in expansionary periods. That's unprecedented, at least in this century.
Yalt | 12.18.08 - 12:12 am |

true except for the second clinton term

when the feds retired US debt

karelian - from where I come from a strong line of defense is bitching about Brits. It's a national pastime.

Please don't take that away from us....

Actually we're quite equal opportunity: everyone gets trashed. There is equity in the world.

If it weren't for my Brit colleagues confirming the charges on daily basis, I would thin makings differently I might have less to do where I m
C

"...but I fail to see how it encourages companies to borrow."

I agree, somewhat.
But at least this puts the focus on business, where it should be, not on banks, as in the US, which is futile. However, I think a government purchase/contract/improvement that purchases goods or services from business is still a much better way to go. It would have two effects: first: jobs and money go into circulation and second, a company with contracts and work is creditworthy can actually borrow money.
I think the Bernanke/Paulson bank-centric view is incorrect and is largely cronyism. We have wasted enormous future production propping up unproductive pals of Hank.

"- the idea that you can make the economy grow simply by expanding the money supply."

Definitions are in order! Money as a marker (which is what we print and what the government 'creates') or money as stored value - as future work, ultimately? The Debt-Deflations understand the difference. Ben Bernanke does not.

true except for the second clinton term

when the feds retired US debt
mock turtle | 12.18.08 - 12:26 am | #

Far more than offset by the expansion in other debt. The only period since 1984 when there was even a lull in debt growth was during the Bush I presidency.