Wednesday, August 12, 2009

SAR #9223

A few of us have seen this movie before.

Public Places: The current debate has shown quite clearly that those who call themselves compassionate conservatives simply do not care about anyone but themselves. If anything unfortunate should happen to them, or if they simply fail to get rich, they feel they are personally deserving of government assistance. Others - the majority of us - are untouchables.

Grab an Oar: For the 5th consecutive month, US consumer credit fell - a record $64 billion. Americans are beginning to pay back 20 years of foolishness. But a recovery depends on customers running up their balances; cutting back is not helpful.

'58 Chevy: Where are the poor, those just starting out and teenagers going to get their rides after the government gets through crushing "clunkers" and driving up the price of used cars. Those are the cars lower-income families can afford and need.

Scorecard: Having obligated the citizenry for somewhere between $2 trillion and $24 trillion (opinions vary) to fix the problem, so far they haven't done so. The banks are still do not lend, they've still got drawers full of toxic paper, jobs are still disappearing. They say they were prevented a complete meltdown of the system. But what they really did was give away all that money. Intentions zero, bankers $12 trillion and counting.

Keeping the Powder Dry: Corporate treasurers have about $1.98 trillion socked away in cash and short term paper, up about 20% y/y. Treasurers have figured out that if they keep the money, they get to keep the job.

Out of Slight, Out of Mind: In case you've forgotten, the banks still have all those toxic assets they had last fall when they were going to cause the fall of Western civilization. TARP was supposed to buy them up, but that money went somewhere else. The crap is still sitting in the vault, no one knows what it's worth, and everybody from the bank to Bernanke is still trying to figure out how to stick the taxpayer with most of it.

Go 'way: The nation's governors want DOD to stop trying to get their grubby hands on the states' National Guard and they certainly don't want any 'command and control' assistance.

Shocking: The headline: 'JP Morgan Chase Caught Speculating with Customer Money' But that's not really news. It is what the Wall Street banks have done since I was in knee-pants, and according to my Dad, long before. They have always used the customers' money - why else be a bank? And now there's the public funds, for which they pay a pittance. And with these "other people's" money they speculate, take risks, and pay themselves bonuses. Always have, they just used to be more decorous about it.

Oldie but Goodie: Nearly 30% of all houses sold in June sold for less than the previous purchase price. Buy a house, they are the bedrock of America's prosperity – remember that one?

The Shadow Knows: There are thought to be at least 700,000 REO houses banks have not put on the market for fear of driving the prices down even further. What about the anticipated 6 million more foreclosures in the near term? And the 12% of homeowners who want to get out of being owners as soon as the prices turn around. It's nice to have a dream.

His Story: The depth of the downturn suggests that GDP will grow at a 6 to8% rate over the next year... or so history tells us.

Watching Dinosaurs Mate: GM says the Chevy Volt will get 230mpg. My horse gets better gasoline millage than that. The GM estimate is for less than 40 miles between recharging - in essence the gasoline engine is a generator to recharge the battery when the Volt has gone beyond reach of its extension cord. To figure actual miles per unit of fossil fuel, you'd have to know what the local power plant is spewing into the atmosphere. If the Volt only gets 7 miles to a ton of coal, we'd be better off with gasoline. Or a bike. Or mass transit via electric rail - like we had before GM bought them up and tore them up.

Porn O'Graph: Deleveraging in action.


Anonymous said...

RE: Watching Dinosaurs Mate

Total cost per mile. Calculating MPG the way the EPA did on an electric car would make the telsa Roadster have infinite MPG.


mistah charley, ph.d. said...

If the clunkers are crushed, what will poor people use to get around?

As I mentioned here a week or two ago, my poor old twentieth-century clunker doesn't qualify me for a handout, because it's never been gas-greedy enough.

So I told my spouse, missus charley, m.d. (and she was somewhat skeptical, I must admit) - my next car is a bicycle.

This won't suit everyone, of course, but for some people it's the best option.

Anonymous said...

Watching Dinosaurs Mate: GM says the Chevy Volt will get 230mpg....

In all the stuff written about the US AUTO and GM disaster, I have yet to see any story on how much these guys make selling vehicles and other war material to the US War Racket (no, it is not the Department of Defense!).

The War Racket need for a secure supply of vehicles and other war material was never mentioned as a reason for a US AUTO Bailout. (I'm sure Congress was filled in behind CLOSED DOORS.) And the fact that the US AUTO Industry went bust even with those sweet War Racket contracts indicates how bad off they really are in terms of being competitive. And what about all those other American Industries which suck on the War Racket Tit and only survive because of that?

Sure hope Chinese consumers need Drones.

CKMichaelson said...

Anony 2:29
Wow. How did I not think of the impact losing GM and Chrysler would have on the production of military vehicles? Throw GE into that same bin.

I've never seen the numbers, but I suspect that the US would be a far different place if the Military Industrial Complex had not feasted well and regularly from the defense budget since 1945. And to what end? Security? From whom? Why do we spend $400 billion a year on a group that has no peers and cannot beat the puny enemies it makes up?

Ah, you got me started. ckm

mistah charley, ph.d. said...

Speaking of the Military Industrial Congressional Financial Corporate Media Complex (MICFiC - a conspiracy to milk, shear, and slaughter the sheeple, metaphorically speaking - except the "slaughter" part is not metaphorical), it had a more approriate name before it adopted the Orwellian "Department of Defense" label - as Wikipedia states,

"On 26 July 1947, Truman signed the National Security Act of 1947, which set up the National Military Establishment to begin operations on 18 September 1947, the day after the Senate confirmed James V. Forrestal as the first Secretary of Defense. The Establishment had the unfortunate abbreviation "NME" (the obvious pronunciation being "enemy"), and was renamed the "Department of Defense" (abbreviated as DOD or DoD) on 10 August 1949."