Saturday, November 15, 2008

SAR #8320/Weekender

The market's "invisible hand" isn't invisible,

it was never there.


Please, sir, I want some more. The new kids, JPMorgan, BofA, Goldman Sachs, have joined some real banks in demanding the FDIC clearly guarantee their bonds. Also, they claim the FDIC fees are too high. Mr. Bumble hit Oliver with a ladle.

No Shame: Theft holding company - noun. (1) An insurance firm that bets you'll die young. (2) An insurance company that buys the smallest S&L it can find and then asks the Fed for access to the goody bags and the Treasury for a few billion TARP to hide what they're doing. (3) The Hartford, Genworth, Lincoln National and Dutch owned Transamerica.

Straw for the Camel: The Fed, FDIC and Treasury have put the taxpayer on the hook for $5 trillion. So far.

The Paulson Pardons: At the end of his term it is traditional for the President to issue a few, well selected pardons. That may be where Paulson got the idea to give away as much of the $700 billion as possible to his once and future friends and colleagues.
Chinese Fire Drill: In China's miracle cities, factories close, throwing serfs out of work, often without their final pay packets. 67,000 factories havae closed so far, leading to "labor disputes and protests." City streets full of hungry, desperate citizens are making bureaucrats at all levels of the country nervous. Thankfully, we've got Northern Command.

Clean Break: The EPA's ruling blocking a permit for a Utah-based coal-fired electrical generator puts about 100 similar proposed coal-fired power plants at risk. It's not too late for Bush to overrule. Lawyers, to your posts!

Holy Holocene: About 10,000 years ago the earth entered a long warm period called the Holocene, during which agriculture began, cities were built and mankind flourished. As the earth continues to respond to the warming caused by theCO2 civilization has pumped into the atmosphere it is thought that as early as 2016 a tipping point will be reached triggering a series of feedback loops that will make rapidly destabilize Earth's climate. Scientists suggest that only by eliminating the burning of coal is the only way to sharply reduce our emissions sufficiently to prevent this.

Rocky VI: With October's 2.8% decrease in retail sales as an intro, it looks like the Christmas season will need a big finish

Toast, Buttered Side: Paulson now says the problem is that the American consumer can't get a loan to buy a new car and the Treasury's objective is to restart the consumer credit bubble market. TARP won't cover helping Detroit or homeowners because its only job is "the stability of the financial system."

On Being Afraid: Evolution has wired us to react to immediate dangers; things we can see, taste, and feel. Knowing we are doomed if we do not do something about climate change is not the same as feeling doomed. Explains smoking, too.

Public Service Announcement: Layoffs and reductions are the prime topic for discussions in the local pub, after-work bar, and on the train. To help keep readers at the top of their game, The SF Chronicle is publishing an ongoing list of bankruptcy fillings and mass layoffs under the heading WARN . You've been warned.

See, The Problem Is: Debts get paid out of income. Incomes haven't risen since Nixon went to China or before. But consumers kept consuming and now they need to go on a diet. The Recession Diet.
Nose/Face: 80% of current refinery construction projects (30/160), are being abandoned. It takes five to seven years to complete one of these projects. This is a vote for a very long very severe recession. Five years. Or seven.
On bailing out the banks: When you get a mortgage from a bank, the first thing the bank does is sell that debt to Fannie or Freddie (95% probable) and farm out the servicing. Why involve the bank? It adds no value, simply does a little paperwork, sucks out fees and collects bonuses.
Porn O'Graph: Debt divided by income yields a pretty sad picture.

3 comments:

Owner Earnings said...

15 reasons the US economy will get worse: Link Here

CKMichaelson said...

oe -
Pretty much you an roubini have the same list. See http://www.nakedcapitalism.com/2008/11/roubinis-latest-why-things-are-hopeless.html

Owner Earnings said...

Ya, great minds think alike haha.

Too bad Roubini charges for his blog.