Tuesday, February 3, 2009

SAR #9034

After 30 years of screwing around, we are out of second chances.

Word for the Day: Cognitive Dissonance: Holding two diametrically opposed opinions, as in Secretary Geithner saying "We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system," as he argues for the next TARP and the stimulus bill.

Quoted: "The financial debacle has many causes and implications, but it would be wrong to underestimate systemic corruption."

Trying Times: The Israeli Army is sufficiently concerned about the possibility of international tribunals investigating their soldiers for war crimes in Gaza that all officers from battalion level down are wearing black facemasks to conceal their identity.

Fixer-Uppers: In Q408 more money went into fixing up old homesteads than went into buying new ones. Make do or do without, a sign of the times.

Insulating the Economy: How big a boost would the economy get if the Feds underwrote bringing every house, office and factory in the country to some energy-saving decent level of insulation? And then double glazing the windows. And updating the HVAC systems. Less than the stimulus bill. Less than the TARP's already wasted. Plus it would create jobs all over the place, and leave behind a tangible recurring benefit that would, in fact, repay the expenditure. And cut down on energy use.

Some Numbers: Residential construction was down 23% in December (YOY) and down over 50% from the March '06 high.

Before: The Italian GOP Rightists have banned 'foreign' foods from Lombardy, the Venito and other places where they are in power. It's aimed at 'kebabs and Chinese foods'. Except the pastas are fro China. The tomato's from Peru, as is the potato. Get that gnoochi out of here.

Sweet 16 18: For the 18th consecutive year, glaciers in North and South America and Europe shrank, some retreating as much as as 10 feet, and on average twice as fast as 10 years ago.

Here's The Plan: There's no need to wait a week to find out the basic outline of Geitner's plan to bail out Wall Street. In terms even an economist could understand, it's this: The Treasury is going to buy worthless assets for whatever the bankers want. Secretly. That's it. Simple.

Always Something: Rising sea levels are forcing sea water further up the Ganges, salting out farmland and invading the water table.

For Your Own Good: Ever get a call from your credit card company advising you they had noticed "unusual activity" on your card and wanted to make sure you had made the purchase? Now they're looking at what you buy to see if they still want you as a customer.

Great Migration: Some 26 million rural Chinese have lost their jobs in the big seaboard cities and are making their way back home. Unhappily.

Tax Breaks: The GOP will not support Obama's stimulus unless it includes even more tax breaks for business. Over 90% of US corporations pay less than 5% of their income in taxes. What's to cut?

Porn O'Graph: Do you buy this chart?


Anonymous said...

I don't get the graph. What is contained in the Comsumption line.

CKMichaelson said...

The key point of the chart is the downturn in consumption - both all consumer goods (left scale) and durables. Both scales are logs, and the source is http://www.econbrowser.com/archives/2009/01/the_consumption_2.html
Maybe I should go back to double tagging the graphs... both to the graph itself and the article where I found it.

Anonymous Monetarist said...

An old post, on the subject of 'cognitive dissonance':

Tuesday, November 25, 2008
Cognitive Helplessness and Learned Dissonance

Learned Helplessness is a psychological condition in which one continues to be hurt or damaged physically or mentally after having learned of one's powerlessness in a situation.

Cognitive Dissonance is the feeling of uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.

As we review today's latest SOMA (Secure Official Money for 'Assets') program the progression from outrage to acceptance continues:

Discussion of the PPT on Hee-Haw elicited a remark from hometown hero Citizen Santelli that 'we know the Bank PPT exists' which resulted in the backbenchers proclaiming ' Where is the outrage?' '... and we like it!'

We're just powerless to deal with folks not wanting to sell assets worth a nickle at a nickle so we need a joint venture partnership between the Fed and the Treasury where the Treasury provides the equity to the Fed administered SIV. Let's leverage that puppy up and go collect full-faith and credit nickels in front of the printing press constrained bulldozer.

As the government coats the financial skeleton with taxpayer financed adamantanium, there are glimpses of cognitive dissonance setting in.

Someday the FED will have to mop up all these meatballs but we can't worry about that now.

If the government crowds out the private, more so because of the quality (what we are paying for the assets) as opposed to the quantity (and ultimately you can't fix a broken dam with more water), the government then has to bring the private sector in utilizing the very methods that have crowded them out, but we can't worry about that now.

Learned helplessness leads to cognitive dissonance.

The combination leads to cognitive helplessness and learned dissonance.

But we can't worry about that now

CKMichaelson said...

AM - thanks for the memories...

Anonymous said...

Quoted: "The financial debacle has many causes and implications, but it would be wrong to underestimate systemic corruption."

It would be wrong to underestimate systemic and UNPROSECUTED corruption. Unprosecuted, crime spreads all the way from S&L Disaster to TARPing.

Go long Corruption, it has a great future in America.

CKMichaelson said...

I suspect that most Americans are already long Corruption, no matter where they invested or who they voted for. But I'm not sure how much future it has.