I wish i coudl come up with somehting funny and snarky, but at this point, why bother?

We're all "The Onion" now.

What has Ken Fischer to say about all this?

I was thinking, "Wright Model B", myself.

Whenever someone from the Government says "Time is of the essence", it ain't reassuring.

This is the same government, after all, that can't agree to pass a non-binding resolution or fund the essential functions of govt, for that matter.

Ken Fisher 12/10/07 "Here are a few factors I don't fear as we enter 2008, either because they won't happen or don't matter: further collapses in the mortgage market; a credit crunch; Hillary as president (or whomever we elect--more on that next month); $125 oil; inflation; rising long-term rates; folly from the Federal Reserve (though I expect folly there); Iranian idiocy (a pleonasm); or anything you read in BusinessWeek. What do I worry about? I told you last month. My biggest fear is of a rising yen and for the reason I detailed. To wit: The U.S. and European markets are being propped up by speculators who borrow in yen.

But otherwise, buy stocks and be happy. It's still easy--five years into this bull market--to find above-average companies selling at below-average valuations. And this when valuations are in general low compared with the cost of long-term capital. "

Hey! There goes Mr. Hanky with a stimulus package for the markets! We should know whether it worked within about ten minutes.

Where is my check already?

Dry, I have a client who wasn't taking the additional deduction for domestic manufacturing. Isn't that common knowledge now? You got yours, right?

dryfly, are your customers building way back machines? I'm sure the demand would be pretty strong!

Interesting that there is that much strength in some areas of the economy.

Ya - I don't get it. One side of me says don't worry the other side (the one that's been through three recessions) says these guys are missing signals.

But if they have firm orders, make the parts & ship them... just watch the AR real close.

Conjure and I want ponies. Time is of the essence.

Farming/ethanol related inputs?

Shouldn't they be saving that ethanol for drinking? Corn squeezin's?

Many will recall that, some months ago, Conjure said that a shock wave would pass through the U.S. economy with NO WARNING.

The shock wave is arriving.
mp | 01.11.08 - 3:55 pm | #

But, but, you're warning us.

Dryfly, are your folks making those lockboxes that the real estate agents put on empty houses?

thanks for the chuckle.

Oh, boy! Mishkin says Conjure and I are going to get lots of ponies!

But general industrial stuff - components used in hydraulics, engines, transmissions, sensors, controls... etc.

dryfly,

It's obvious.. the government is beefing up the war machine. They must be building tanks and other heavy equipment.. Invasion of Iran is the best stimulus package ever!! Maybe even invasion of China?!!???1

I would like to say you're welcome to everyone for donating my scary rumor.

Dryfly, are your folks making those lockboxes that the real estate agents put on empty houses?
albrt | 01.11.08 - 3:57 pm | #

Exactly - its going to go toward cheap consumer stuff and those are the things that are almost totally made offshore.

Industrial & infrastructure stuff is mostly domestic production however.

But go figure - politicians don't know squat about where stuff comes from... except campaign contributions that is.

Purpose of any Stimulus package is to help this year. "Time is of the essence"

To play devil's advocate again:

Would the stimulus package only help us maintain (relatively) unproductive economic activities instead of focusing our efforts on developing better ways of doing things? Might the artificial preservation of broken clumsy institutions leave less room and resources for new ones to take their place?

Do bailouts stifle progress by causing economic waste to pile up and render more and more effort meaningless?

Or is life ultimately better if you occasionally take out the trash even if you hate doing it?

...

These are just questions I have. I'm not necessarily against the bailout. But I'm more and more skeptical each day that anything the Fed does is going to make things better.

mise,

ty but I wasn't going to reveal that I was THAT uncool - LOL - but I guess that that is clear already...

hey how about a video clip?

I suspect the White House will propose to lower the corporate tax rate and call it the :

"Help the Middle Class Bill of 2008"

If Congress rejects it, Bush can claim the Dems hate the middle class.

Jim

ooh that is harsh for LV - I though 'sin' activities did well in recessionary times?

Crispy- "The consumer is tapped out..."

It would seem so.

Major new competition to Vagas in Macau. Much shorter flight for Asian gamblers and no hassle from Homeland Security.

World's biggest casino bets on Macau - USATODAY.com

Jim

ac- "It would be nice to start using this vast economy for the sake of progress again."

Now, that's an alien concept.

Why should anyone do that, when one can play dotcom, flip houses, wait for Fed puts, and get free ponies?

CR, you might find this Reinhart and Rogoff paper from Havard interesting. It looks at past financial crisis of developed countries and asks if the U.S. will experience the same post-bubble "V" growth downturn of bust or if "this time is different". The conclude that it probably isn't and we'll be extremely lucky if the affects are only short lived and mild.

Found it on Brad Setser's Blog.

RGE - Read Reinhart and Rogoff
http://www.economics.harvard.edu/faculty/rogoff/files/Is_The_US_Subprime_Crisis_So_Different.pdf

I also thought this remark on the parallels of the subprime investing to 80's emerging economy lending interesting.

"Another parallel deserves mention. During the 1970s, the U.S. banking system stood as an intermediary between oil-exporter surpluses and emerging market borrowers in Latin America and elsewhere. While much praised at the time, 1970s petro-dollar recycling ultimately led to the 1980s debt crisis, which in turn placed enormous strain on money center banks. It is true that this time, a large volume of petro-dollars are again flowing into the United States, but many emerging markets have been running current account surpluses, lending rather than borrowing. Instead, a large chunk of money has effectively been recycled to a developing economy that exists within the United States’ own borders. Over a trillion dollars was channeled into the sub-prime mortgage market, which is comprised of the poorest and least credit worth borrowers within the United States. The final claimant is different, but in many ways, the mechanism is the same."

Yikes..

Albrt, Quality.

mp,

free ponies...yum!

though I have a three year old daughter who is holding out for a unicorn like bacon d!

The first time through I read that as "crime is of the essence".time for more caffeine...

Excellent comments as always everyone. And excellent coverage too CR & Tanta.

You want to talk stimulus package, why not a middle class income tax cut. You could be revenue neutral and deliver a HUGE stimulus to the middle class if you reapportioned the Bush tax cut for those making over 250k to those making under 250k. If you raise the upper rate from 35% to 38% you could lower the middle rate from 25% to maybe 19% or less - it would make a big difference. It may be spent on junk from China, or keeping the mortgage current. But the savings for those making over 250k can be invested overseas in the blink of an eye with no USA benefit.

Conjure Bag offers the following Ombudsthingy letter:

Dear Calculated Risk Reader:

If you're writing with a problem, tell your mother/wife/mistress (choose one). She'll care, we don't.

If you're writing with a question, wait one week. It will answer itself.

If your're writing to share something, don't bother. We already know.

With All Our Love,

CR & Tanta

But general industrial stuff - components used in hydraulics, engines, transmissions, sensors, controls... etc. Not directly consumer automotive and very little home building products. Given the commodity bubble, sounds like things that might go into ramping up commodity production.

I suspect that what might make this financial crisis a little different than others is that the people who have the money to loan have been seriously screwed by the intermediaries. Some month's ago, Banker mentioned that Wall Street would continue to do what Wall Street does because the holders of the money have to put it somewhere. The notion there is that, in this era of disintermediation, IBs and real estate agents will be the last intermediaries standing. I'm not so sure.

On a bullish note, should the United States decide to engage in massive federally funded infrastructure development, then the holders of the money will love those bonds - they don't have to go through the banks who screwed them the last time around.

Dryfly:

I work in a factory. Just before the holidays they seemed to be about to enter "hunker down" mode: longer than usual holiday shutdown, unemployment office gearing up, letters to employees about what to do about unemployment, then all of a sudden bam!! not only no long shutdown, worked between christmas and new year, and now ramping up. odd. I do believe the mucky mucks upstairs are getting suckered. (suckoring themselves perhaps?) This doesnt FEEL right. But what do I know? Just a little peon. I know they think supplying cre construction will help. ha.

MP: Pink ponies. Wait for the pink ones. From what I hear they are the absolute very fabulous bestest onez ever.