Thursday, April 9, 2009

SAR #9099

We mortgaged our future; it's been foreclosed.

Lies, Damned Lies, & Government Reports: The Treasury is nearly through massaging the numbers and inserting obscure language in its report on the bank stress tests and will release a confusing and inadequate report late on the last Friday of the month. The holding of breath is not required.

Tale of Two Cities: "Upward Curve of Treasury Yield Could Signal Recession's End" and "Fed Sees No Economic Recovery This Year" New York/Washington. The real world is somewhat to the west.

Snake Oil: The administration - presumably at the urging of those who'll make management fees from the idea - proposes there be "Bailout Bond Funds" open to the working stiff to put his 401k pennies in. Giving the ordinary taxpayer a chance to lose money directly, in addition to giving money to AIG indirectly through the government. Do we really look that stupid?

Pushing on String: The American consumer ignored Bernanke and Geithner's pleas to go out and spend. In February consumers reduced their credit card debt at an annual rate of 9.7%. This is the steepest drop since 1978. So much for a consumer-driven recovery.

Not Again! While the White House studies if some hedge funds that contributed to Obama's campaign are too big to fail, the hedge funds are looking for loopholes that will let them in on TALF funds. Every day in every way they all are getting greedier and greedier.

Ah, the model: "French workers hold 4 managers in factory." And: "Almost half of French approve of locking up bosses."

With a Straight Face: The FDIC is barred from incurring any obligation greater than $30 billion. Which is a bit inconvenient, in that it is putting up $850 billion under the PPIP plan. No problem, Ms. Bair says, because the toxic assets the near trillion will buy are worth more than that, so there's no risk and thus no obligation of public funds.

All Work and No Pay: German exports slumped 23.1% in February from a year earlier, while Japanese export earnings were down 50.4% in January.

Who's On First? Foreign central banks are not increasing their reserves - in any currency. If central bank reserves are not increasing their reserves - and given the world-wide economic downturn, no surprise - they are not going to be buying huge amounts of US Treasuries this year. Who will? At what price?

The Good Quick Hands People: Life Insurance companies, including Hartford and the Prudential, will be next to belly up to the bar TARP. Seems they made bad investment decisions, they're not making quite as much money, their share prices are down and certainly they shouldn't be penalized for their incompetence.

Daydreams: Nassim Taleb has a list of obvious principles to follow to manage an economy and avoid surprises. It's what my curmudgeon dad called using common sense. Where's the fun in that?

Double Entry Bookkeeping: US banks have about $5 trillion in questionable mortgages and another $3 trillion in shaky consumer credit and loans. These are "assets". To balance them there is a bit less than $1 trillion in common stock. Brother, can you spare a dime?

Things That Didn't Work: Here's a list of failed experiments Dr. Bernanke's disaster prevention lab has conducted in its thus far unsuccessful search of a cure for the uncommon economic collapse.

Reminder: We are doomed. Permafrost is melting fast all over the Arctic, lakes are forming everywhere and methane is bubbling up out of them far more rapidly than previously estimated. Previous sudden warming periods are associated with rapid increases in methane in the atmosphere. Consider yourself warned. Again.

Builder Bob: Pulte’s acquisition of Centex will create the nation’s largest home builder. But then, anyone who builds more than 2 houses a month is a major house builder these days.

Tax Abuse: The 10 largest paper manufactures will split $8 billion from Uncle Sugar this year under a transportation bill provision designed to lower use of fossil fuels. They earned this by adding diesel fuel to a process that does not require any. My mother wanted me to be a lawyer but I had a conscience.

Asked and Answered: "Will the PPIP Bankrupt the FDIC?" Yes. The better question is will it bankrupt the US Treasury?

Excuse Me? Somali pirates hijacked a Danish-owned, US-flagged container ship with at a crew of at least 20 Americans on board. US-flagged? Most US-owned ships aren't US-flagged, yet here's a Danish ship with an American crew flying the American flag. And it gets hijacked?

Plot Thickens: Pranksters, criminals, or terrorists have infiltrated the computers managing the US electrical grid and left behind programs that could disrupt the system. This is potentially more dangerous than our simply not maintaining the grid.

Better Late Than: Moody's finally got around to lowering the outlook for states and municipalities. Rating agencies are always the last to know.


Anonymous said...

RE: Plot Thickens:

Wasn't it a few years ago. During the summer as I recall, that the entire Northeast went black. I seem to remember our fearless leaders (Bloomberg of NYC) and the FBI immediately (I mean within minutes) telling us that it wasn't a terror attack. Just like Flight 800 I guess.

Government has been lying straight faced to us since the the Warren commission and the Gulf of Tonkin and the only difference now is that we the people know it and are to apathetic to care.


Anonymous said...

Daydreams: Nicholas Taleb has a list of obvious principles to follow to manage an economy and avoid surprises. It's what my curmudgeon dad called using common sense. Where's the fun in that?

It is actually NASSIM!

If you really want to see someone SHRED and DECIMATE Economists, read BLACK SWAN. It also indicates there are many other charlatans and fraudsters in other American "disciplines".

Nassim's Agent

Charles Kingsley Michaelson, III said...

A thousand apologies! I know better - I've well read copies of two of Nassim's works on my bookshelf this very minute.

Color me embarrassed.

Anonymous said...

I meant "Too"

I can't do comma's but I do know the difference between too and to.


Charles Kingsley Michaelson, III said...

RBM - Me, two.
And commas are just to be sprinkled, not stirred.

I'm Not POTUS said...

I think Maersk had to flag the ship as American in order to ship US funded relief supplies. I'm not sure though. But someone in Congress from a maritime New England district must have made that a requirement for funding to get their vote.