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.