Tuesday, October 21, 2008

SAR #8295

The reward for stupidity, greed and incompetence

should be bankruptcy, not bonuses.

Trees in the Forest: Today is pay-up-day for those who wrote some $360 billion in guarantees for Lehman debt. Of that face amount, the experts say so much cross betting took place that the loss will only be $6 billion net, which seems most incredible to me. Today we'll see if it's true.

Transparency: Paulson hired the Bank of New York Mellon to manage the $700 billion bailout. The administration declines to say how much the taxpayers will be paying Mellon.

Emendations: Bush is at it again, rewriting the Constitution. Madison's original version did not include the part where the President gets to decide which parts of laws he has to follow. The latests one he didn't like said he couldn't use any of the Pentagon's funds "to control the oil resources of Iraq".

Numberology: As part of the clever government plan to get banks to trust each other more, the SEC has interpreted accounting rules to let banks keep pretending that worthless paper is worth whatever they want to pretend it is worth.

Another View: Two former MI5 heads view the US response to the 9/11 attacks as a "huge overreaction... to what was "another terrorist incident" not much different than any other, except for the narcissistic over-reaction by the Bush administration and the subsequent rush to dictatorship.

Taxable Truth: The GOP is traditionally claimed that taxes are too high on corporations, that to generate jobs taxes on corporations should be lowered. McCain bleats this regularly. The GAO says that most corporations do not pay any income taxes. What is lower than zero?

Peeking at Oil: Exporting oil companies must first meet the needs of their populations, which reduces the amount available for export. Mexico is instructive: Since reaching peak production in 2004, Mexico'ss production has dropped an average of 5.4% a year, internal consumption has risen 1.2% a year, and exports have dropped 16% a year. In 2008 exports (mainly to the US) will decrease by 28%.

Could the US election be stolen? Wrong question. It should be: Will the US election be stolen again?

What Have I Done For You Lately ? The IEA says it would be irresponsible of OPEC to cut oil production, for it might hurt chances of a early economic recovery. The agency did not comment on the effect of low prices on the stability of oil-producing countries.

Petri-dish: Perpetual growth is not possible in a world of finite resources. We need an economic system that will let us live within our means, instead of a system based on unsustainable growth.

Capital free capitalism: The US is $10 trillion in debt. US banks are insolvent. Business are folding because they can't roll over their debt. The ordinary citizen can barely make minimum payments on the credit cards that have supported the whole circus for a number of years. This is not capitalism; no one has seen any capital in years. This is creditism.

Becalmed: The credit crunch is leaving wind generating projects blowing in the wind.

Once Upon A Time: Deregulation and privatization would pave the streets with gold, they said. Instead we got chaos, catastrophes, wars, and a financial crises that threatens to become the end of times. But the elite who caused it are still making out. Bush was, for them, a great success.

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