Obama Wants a 'Better Plan'? Here's One: Bite the Bullet 58 comments
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In view of the growing clamor against many basic aspects of the economic stimulus plan, President Obama has said “give me a better plan”. I think a real discussion of a better plan should be held.
The present stimulus plan proposes to get the economy going again by pumping into the economy massive amounts of money, nearly all of which is created at the Fed. Many people worry about the risk of hyperinflation. It is clear that much, perhaps most, of this money will be lost on ill conceived bail out schemes. Future generations will inherit staggering debts from this approach.
The problem, as I see it, is that monetary creation has raised the price of most things to unsustainable levels. This monetary creation (created by dramatically increased bank leverage, off balance sheet vehicles, new financial products such as derivatives and in particular CDSs, new financial intermediaries such as hedge funds and private equity) and massive amounts of new credit throughout the system, much of which is not collectible, pushed up prices to unsustainable levels. Houses, commodities and stocks were recently at non sustainable levels. When the credit started collapsing, deleveraging the financial institutions became essential to the financial institutions survival, and the prices started to drop. Larry Summers has now turned to the same policies Alan Greenspan used to fix the “dot.com” crisis of 2000. The difference is that the Obama government is on steroids, which is to say giving many multiples of the money pumped into the economy by Alan Greenspan.
However, the result will be similar, only worse. Just as Alan Greenspan’s “solution” in 2000 is a direct cause of the problem in 2007, a 2009/2010 monetary bailout through massive monetary creation will set the seed of a soon to be had problem of even greater proportions. If the government achieves short term stabilization by massive injections of money, we are only setting ourselves up for a much bigger problem now burdened by a staggering new debt levels in a very few years. More likely, is that the current stimulus plan will simply not work given the magnitude of the problem.
An alternative is to “bite the bullet”. By this, I mean to let the bankrupt institutions fail. The Obama government is now starting to talk in this way in limited terms. The proposal for the auto industry is starting to sound very much more pragmatic. In fact, the current government proposal for GM is almost identical to the proposal of this author in November of last year (see “A Solution for General Motors”). If we can do this for industrial companies, why not do this for banks, and more broadly financial institutions?
I remember in mid 2007 discussing the coming economic problems with my friends, and to a man they all said we had two options. Go the Japanese way and spend decades dealing with the problem or go the way of the Nordic countries and deal directly with the problem and quickly put them behind us. Everyone also said in 2007 that it was inconceivable that we would go the way of the Japanese since we knew how badly it turned out. Now in 2009, we are clearly going the Japanese way of a bailout and we can expect similar results. Let’s look briefly at some of the characteristics of dealing with the problem in Norway in the early 1990s as explained by Jarle Bergo.
The most important characteristics of the resolution of the Norwegian crisis can be summarized as follows:
- The banks' own collective guarantee funds handled the problems in the banking sector before the crisis became systemic.
- No blanket guarantee for the banks' debts was provided by the government.
- No regulatory forebearance.
- No liquidity support to banks whose solvency was in doubt.
- A clear and transparent division of responsibility between the political authorities, the supervisory authority and the central bank was established early on.
- Government support was contingent on strict requirements being met, e.g. existing shareholders accepting a write-down to cover losses to the extent possible.
- No micro-management of the banks.
- Measures taken to prevent supported banks exploiting the situation vis-à-vis non-supported banks.
- No asset management companies or "bad banks".
While we are late to apply some of these specific actions, this list of policies illustrates a markedly different approach to the problem than we are pursuing through economic stimulus.
Why did we say “no” to the Japanese way in 2007, and now we go that way? The real reason is that we are frightened of the public reaction that not enough is being done “to fix the problem”. One cover-up explanation is the Nordic countries have small banking systems while the US has a large banking system. I would submit if we solved Citi and B of A and maybe Wells Fargo and JP Morgan, the FDIC could deal with the rest. We have many strong regional banks which will quickly step up to play major roles in banking that are not burdened with the enormous problems of the largest banks.
“Biting the bullet” will have serious fall out, in addition to the failure of several of our largest banks, particularly for private equity, hedge funds, some investment banks and insurance companies really operating as a hedge fund like AIG. A major decline the major US financial institutions will have serious short term effects on the economy.
But the human spirit of all the affected people may better survive a couple really miserable years than a decade or two of not totally miserable, but still never healed economic conditions like Japan. A full discussion of this option might reveal the Nordic way a better down the road option than the Japanese road we are currently on. And the Nordic solution completely avoids the most terrible of all possible outcomes, albeit still of small probability, which is hyperinflation. Hyperinflation is a state of affairs which completely destroys virtually everything in our world as we know it today. Let’s take President Obama up on his challenge and find a better way.
Let me conclude on a personal note. Much of my professional life has been spent working as a turnaround man for businesses with troubles, first as a banker who had clients with credit problems and then running the companies with problems and finally taking ownership positions in companies with problems to turnaround. A successful turnaround requires that one face the facts. The present course of US economic policy is not likely to be successful. It is highly probable to be disastrous. While "biting the bullet” needs to be better defined, I find when you know the present course is not correct, you must work to find a realistic course that brings you to your desired goal. Collectively, I am sure we as a people can find a better way than the current US policy.
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This article has 58 comments:
Totally agree with your POV. Hyperinflation would be much more devastating in a couple of years from now than biting the bullet now.
No they won't. The markets will protect themselves from this attempt to off lay debt to future generations. Hyperinflation will ensure that the pain is felt in the here and now. The Haves will end up paying for the Have Nots, from whom they largely stole it all in the first place.
On Apr 05 08:29 AM Adrena wrote:
> Bonjour,
> Totally agree with your POV. Hyperinflation would be much more devastating
> in a couple of years from now than biting the bullet now.
>
Mr. Wood,
I'm no big fan of the current stimulus plan(s), and agree we're at risk of our own "Japanese decade" (or worse), but I'm not certain how many "strong regional banks" there are to step up to the plate. Granted, they avoided getting involved with many/all of the exotic debt instruments that plague the bulge bracket banks, but they were certainly big players in the CRE market, and that particular shoe is looking like its starting to drop.
The banking system supports the military system, so the reason why the bullet cannot be bitten is clear: collapse of the far-flung empire, leading to collapse of Western military and economic dominance. Now that the election is over and we have been guaranteed four more years of the same old same old, has there been any movement to bring home the troops? No, instead we will move some from Iraq to Afghanistan. The army stays in the ME. I hope SA authors don't get too upset with my insistence on political commentary, but it is impossible to understand our economic and fiscal policy without understanding the underlying political realities, and this is ever-more clear now that Washington is overtly setting industrial policy. If ever anyone wanted to 'see' Leviathan, now all one need do is open one's eyes.
Massive debt attempting to cure a massive debt problem should be seen by a second grader as pure creepy stuff. All the bullets from the Fed will be already shot at the wrong target. Massive government programs will have been wasted and we will all be cooked. It is the classic political solution sent to solve a financial problem.
We are going through the painful effects of de-leveraging, the painful effect of a downward spiral in globalization, and the unintended consequences that always occur when the government gets involved.
However, I see no reason to support the idea that we now should slide into a depression based on your belief system.
I am always amazed at comments that we are facing hyperinflation when the velocity of money has fallen off a cliff. YES the FED is printing money, and YES the FED is monetizing some of the debt.
But, to suggest that this automatically leads to hyperinflation when the value of EVERY asset class, other than gold, has fallen dramatically, makes no sense to me.
If anyone seriously thinks that nationalizing Citi or BofA will lead to a better outcome with the Feds running it would have to prove to me that the Feds, with all of the attendant politicization, are better at managing banks --- something I have not ever seen.
I would suggest there are PROFOUND differences between the economies of Norway and the US. For example, the politicians in Norway get very high ratings and have a high degree of credibility;i.e. people trust that the government would do a good job.
Finally, the Japan crisis was more than just "zombie" banks, as I read it. It was the fact that the banks were continuing to prop up their insolvent sister companies in their Keiretsu. They were not only holding bad loans at book value, they were loaning to insolvent entities, making the problem worse.
Conversations I've had with folks during the day reveal to me ,at least, that this endless rhetoric from Obama and other political figures about fiscal Stimulus is having the desired effect .
That effect being that the populace now believes that no bad can be done,especially here in OZ as they wait for the fiscal stimulus check from the Australian government .
I note that someone in the Obama camp might have been reading the authors articles. Why couldn't they have also read a bit of history.. .. .modern Japanese History. ?
There's just not enough work to do at decent pay. Genuine, productive work. As our Humanbeing/machine homo sapiens species has invented tool after tool to make work less burdensome, and continues to roboticize everything, not enough new 'work' has been created to employ the net millions every year that are coming 'on line'. It strikes me that so many people now, if they lose their jobs, cannot replace them. Ever.
This has been happening for some time. But we are only at the beginning of an burgeoning number of people who cannot find similar work at similar pay---even well-trained ones whose industries either migrate, get absorbed or die off. The jobs they had are gone. If it is truly due to demand destruction, instead of 'demand delay', then there is more, much more global strife ahead.
The interconnectedness of government sponsored employment, like the Defense Department, which leeches hundreds of thousands of career opportunities out into the private sector, is not hard to see. Cutting budgets for just about anything then results in more unemployment. This is a real dilemna.
It seems that creating good jobs with decent pay (a factor of supply/demand if ever there was one, i.e., the less Computer Engineers there are the higher the pay for the existing one; the less burger-flippers there are, the more they get paid) is where the real crux of the problem lies, not in banking systems.
If we do not have entrepeneurs, real job generators/creators, (not just folks who quit working for another and essentially go self-employed like the lawyer who does not want to work for a large firm and goes solo, essentially buying a job) if we do not have meaningful work to be accomplished by the millions and billions, what does the future hold?
In the absence of new employment, a new paradigm may have to be born--providing for the life-time unemployed in some semblance of middle class living, forever. Otherwise, bloody revolution is around that corner.
Doug T
www.mutualfundwealth.com/
It is the time element I am most concerned with.
Go ahead and tax me. Just don't take the next decade (or so) of my life.
1 in 9 is on food stamps. Unemployment benefits are running out for 700,000 plus people. 17% of our fellow citizens are unemployed. My house has lost value. My construction company will mow your yard for Pete’s sake.
If this isn't a dad gum depression, I do not want to find out what one really is.
On Apr 05 08:39 AM Dave Wrixon wrote:
> <Future generations will inherit staggering debts from this approach.>
>
>
> No they won't. The markets will protect themselves from this attempt
> to off lay debt to future generations. Hyperinflation will ensure
> that the pain is felt in the here and now. The Haves will end up
> paying for the Have Nots, from whom they largely stole it all in
> the first place.
The misinformation and confusion disseminated by financial newspapers and TV programs is astounding.
Glen Beck of Fox news recently had an aggressive piece on the US dollar becoming worthless due to the coming runaway inflation. Mr. Beck at Fox, like most everyone at CNBC, is going bonkers over the Federal Reserve printing money and the coming supposed inflationary Armageddon. It seems to me they don’t understand what they are talking about because they only tell half of the story. CNBC, arguably the biggest financial news program by viewership affectionately calls itself, ‘The best of the best’ or ‘The only business network that has the information and experience you need’. Every day on their program they have guests and panels of so called, ‘market mavens’ or ‘experts’ overwhelmingly spewing misguided information which is nothing more than self serving spin.
My personal favorite was a prediction CNBC made in December 2008. Larry Kudlow, one of their pundits said, ‘we are now officially in a recession and now we know it began one year ago’. What? I almost fell out of my seat. Let me get this straight. Larry Kudlow and 95% of their featured ‘experts’ and regular pundits were proclaiming for all of that year that we were avoiding a recession. They claimed the stock market was going to stay flat and have moderate growth. They also said we would have a ‘soft landing’ in real estate, remember that phrase?(A soft landing infers no crash) If you watched CNBC you will recall they said numerous times a day for a year. During this time the Dow Jones Industrial Average decreased. It didn’t stay flat or increase, but dropped from 14,000 to 8,000, a loss of more than 40% in just over a year! They also spoke about the soon resurgent bull market; but, there is no bull market. The market continued to drop as they fostered false hope. Again, this is a network that calls themselves, ‘the best of the best’ and ‘the only business network that has the information and experience you need’. Another glaring example is one of CNBC’s most popular talking heads Jim Cramer. He proclaimed that Bear Stearns stock was not only a hold, but a great buy at 60 dollars per share. This was one week before it went completely out of business and plummeted to 0. This brings me to purpose for my letter. I’d like to clear up a large misconception that most news organizations are creating, the concept of inflation from the printing of dollars. It’s astounding to me that there isn’t a person anywhere on TV or in the Main Stream media that’s getting this issue right or giving other viable alternative outcomes except for inflation. Perhaps the main problem is most people have no idea how money is created in our system.
Let’s first look at few definitions.
Monetization – the third definition is most important and what causes inflation, 1 and 2 mean nothing without 3.
1. To establish as legal tender.
2. To coin (money).
3. To convert (government debt) from securities into currency that can be used to purchase goods and services
Inflation
1. The act of inflating or the state of being inflated.
2. A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
Deflation
1. The act of deflating or the condition of being deflated.
2. A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit.
Monetization is a key aspect to understanding the issue of inflation. If the TV pundits were having an accurate discussion about these issues they would put more focus on concept of monetization, not how much money is being printed. When the government prints money this does not automatically mean we are going to have inflation or a sinking dollar. In fact deflation is what we have now, the opposite of inflation, (re-read the definitions). If the money being printed does not get into the hands of the consumer, it is not inflationary or in economic terms ‘monetized’. Banks do not loan money to people who are broke, who have too much debt, who are losing their jobs, and whose homes are worth less than their mortgage. Right now our entire world is witnessing record amounts of money/debt being destroyed by massive decreases in the price of everything like we’ve never seen before in history. Debt destruction is difficult to conceptualize. You must first understand that money is debt. As an example: When the worth of your home is less than what you owe, and this trend continues along with the loss of jobs, people stop paying their debts. In turn the banks absorb these debts and can no longer keep lending. As this cycle continues, prices go down, and banks go out of business.
Here are two important facts. Debt destruction is money destruction and credit is money or purchasing power. Credit is how 95% of people buy homes, cars, even food and where has the credit gone? Money and credit are synonymous. When credit is revoked or decreased and debt payment slows and/or stops, money creation ceases to exist and deflation ensues. Many Americans, including people I have personal contact with have seen a decrease in the credit offered to them from their home equity lines, and their credit cards. Some people’s available credit has been shut off altogether! The increase which was inflationary has already happened, the pundits are 15 years late! Did the properties in your neighborhood triple from 1995 - 2005? Why did they? It’s interesting we hardly heard a peep about runaway inflation or a collapsing dollar until now!? We were in a huge inflation due to the biggest housing, stock market, and commodity bubble in history and now that it’s over, we are hearing about inflation ad nauseam? Reference the attached chart to view what true monetization looks like to see what creates inflation. This IS NOT what’s happening today. Today banks are not lending anywhere near the level they lent in the past so outstanding debt is falling as people/companies gradually repay their loans or default on them. This contracting of outstanding credit as I have detailed above leads to deflation as money is destroyed. Even when debt is repaid deflation ensues if banks aren’t lending it back out, which they are not. Banks need to expand credit for inflation to actually kick in and you do not see that happening to any level as seen in previous years. In fact, it is decreasing as I just detailed. Now that the bubble is bursting there is talk of inflation. Why? People hear the government is printing money and they misunderstand the implications. We know from the snippet of information I detailed above that financial pundits being wrong is not an abnormal concept, it’s a common theme! Right now if you have any US dollars the buying power of those dollars are getting stronger. This means you can buy more today at a lesser price than last year, this is the textbook definition of deflation NOT inflation. The dollar index has soured over the past 6 months. Again, if it was devaluing the dollar why has the dollar been up against just about ever currency in the world during the last 6 months? It’s not devaluing the dollar, that’s why. Could we have runaway inflation at some point way off in the future? Sure, but first we’re going to have a massive deflation and depression. This is because the money that’s going to the banks is not being lent, it’s being hoarded and the banks are buying treasuries. Our credit is shrinking, jobs are shrinking, net worth’s are shrinking, and taxes are on the rise. This is not inflationary!!
Again, inflation is what took place over the past 10 plus years ending just a few years ago when the Federal Reserve, (a private banking cartel who will not tell us where our bailout money is going) printed money and pumped it into our hands by lowering lending rates at breakneck speed. At the same time lending standards became non-existent allowing everybody and their brother to borrow money to buy just about anything they wanted from cars, homes, collectibles, even boats and jet skis, and we know what good investments they are. Prices went to the moon and this is called INFLATION. Please re-read the definition of inflation and tell me without borrowing or increasing credit how we can have inflation again? The media is wrong. Visit this link greatdepression2006.bl... and read what the mainstream media, government officials, those akin to Warren Buffet of that day, and the Harvard Economic Society who was the CNBC and Wall Street Journal of the 20’s and 30’s had to say. They got it wrong. They said everything was great just months before the greatest stock market crash in history where the market fell 80%. Nothing has changed today with information except for maybe a faster medium to disseminate it, namely, Internet and TV.
Say you have $1,000,000 dollars in cash that gets burned in a fire. That money is obviously no longer in the system because it’s been turned into ash. Therefore if another $1,000,000 is printed and monetized(put into the system or in this case in you’re hands) to replace that ash, is that inflationary? Does this printing of money cause prices to rise? Does it make the existing dollars in the system worth less? This is the misconception. People hear about the printing of dollars and say, ‘runaway inflation is coming’. Wrong. Not only is that wrong because it would only be replacing what was lost, IT IS NOT BEING LOANED OUT, it is not being put in the hands of spenders as I explained! It doubly wrong, wrong on both fronts. Again, we may be creating more money but it’s not going back into that house to replace that burnt money, it’s staying with the banks. Therefore, it’s NOT INFLATIONARY and NOT MONITIZATION! In order for it to be inflationary banks need to restart lending at a level greater than they have in the past!
In summary your CNBC, nightly news, Wall Street Journal, Forbes magazine and the like are all getting their information from the same source plagiarizing each other. There are many people out there that can read between the lines but you are not going to find them in the mainstream media. Inflation is what we had over the last 15 years except the last couple of years where we have seen deflation take root. Today people are going broke faster than ever before in history, jobs are being lost faster than the Great Depression, loan defaults are breaking records, banks are loaning at a fraction of what they were in the past. All of this is the textbook definition of deflation but the TV is calling for runaway inflation, I’ll be damned. I’ll leave you with this logic to better explain why printing money does not necessarily mean inflation. A punching motion can cause a facial injury, but a punching motion is not a facial injury. A facial injury is not the cause of punching motions. Likewise money supply inflation (printing money), can cause price increase, but money supply inflation is not price increase and price increases are not the cause of inflation. Cause causes effect, cause is not effect. Dollars are scarce, which is anything but inflationary. It stands to reason that the governments of the world all doing quantum easing at the same time means we are in a heap of trouble. The world governments are not printing money at breakneck speed to buy their own debt because this is a temporary problem, we are in a global depression even if CNBC and the smartest minds on ‘TV’ aren’t telling you so. Remember to reference my link above on the Great Depression, those who do not study history are doomed to repeat it.
Ryan L Morelli
The point being, the author and many of the commenters keep saying WE should do this or that; you all want to second guess the central planners and institute your own version of central planning. If, instead, WE did nothing except mind our own business to the best of our abilities, and fired the central planners, we would not be in this mess in the first place, but since we are, starting to reject central planning now is the only way out. As you all seem to realize, we are in for either massive inflation or at least a decade of depression (maybe both as the feds try all available money manipulation options); so to my mind, biting the bullet means adopting the attitude of the much-maligned Warren G. Harding, and letting the FREE market sort out its own problems, leaving the taxpayers out of it. And no, Dave Wrixon, it is never too late to restore freedom to the marketplace.
Never forget that all political solutions favor one or more special interests over all others. The possibilities for corruption, cartel-forming, and other evils in the current bailout climate are endless. Asking politicians to act responsibly with trillions of dollars, deflated or not, at their disposal is asking for the worst economic disaster in human history. How many zeroes in the number before we, as individuals, just say no and throw the bastards out?
When Obama said, "Give me a better plan," I don't think he meant, "Go write a blog about it." He has made it clear that he is not interested in blogs. In this NY Times article:
www.nytimes.com/2009/0...
------
"Mr. Obama rode to the White House partly on his savvy use of new technology, and he has a staff-written blog on his presidential Web site. Even so, he said he did not find blogs to be reliable, citing the economy as one example.
'Part of the reason we don’t spend a lot of time looking at blogs,' he said, 'is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.'"
------
So how would you go about really giving him a better plan? What is the correct format? In general, I think bloggers do have good ideas, but there needs to be a coordinated effort to create a real proposal and not just outlines posted on a blog.
Can you help take it to the next level?
What you and your deflationist comrades somehow completely ignore is this reality: individuals do not need to borrow anything, the borrowing is being done for them by the government. It is quite obvious that individuals do not want more debt, yet more debt is being heaped upon them by the government; massively unprecedented amounts of new debt. All that is required for monetary expansion to occur is a massive willing lender and a massive willing borrower and spender. The Fed is the lender and the government is the borrower and spender. Nothing else is needed to put money into the economy. Banks don't need to do anything except buy Treasuries with the money the Fed has given them.
In anticipation of your likely responses:
1. Japan - The Japanese didn't have a global empire to maintain, had actual savings to fall back on, and proceeded in a most wimpy fashion. In marked contrast, the Fed and the Treasury has thus far spent, lent or guaranteed almost $13 Trillion IN THE PAST 18 MONTHS.
2. Consumer credit creation? For right now, who cares? Once debt is rendered meaningless by currency debasement, and once consumers become convinced that prices are rising and that saving results in negative returns, they will spend.
Are we to believe that if the big names in banking were allowed to fail that nobody will fill the void?
I find that hard to believe.
As a consumer and a business owner, I'd prefer a larger amount of choices in this area.
Surely there's some correlation between the consolidation in the banking industry and the increased focus of far too many resources on economic activity that produces little to no real value.
If.............
should i pretnd politicians can fix what they caused or at best allowed?
i think i'll keep upping the percentages in gold, silver, and land.
i do not like the nature of the beast i see mutating out of this usable crises.
the idea of letting poor business decisions reap the punishment deservd has always appealed to me. trouble is the problems have been so mishandled for so long that it looks like a leveling of all may be unstoppable. i don't blame it all on obamamama but he is the stooge driving the last nails in the coffin. change and socialism for all?
The AGE of GROWTH world wide in consumer goods and consumer services is about to end, period. Anyone who thinks we will grow our way out of this is clinically delusional.
D is not depression at all it is DELUSIONAL. There is simply no way the world can keep growing and adding people and growing many economies. We are running low and or out of everything at today's 6.7 Billion consumers. Where will we be when we hit 8 Billion in 15 years? Far worst off. The idea of growth at all cost and at all levels has to be buried. Sustainability is the new mantra
On Apr 05 08:42 AM old trader wrote:
> "I would submit if we solved Citi and B of A and maybe Wells Fargo
> and JP Morgan, the FDIC could deal with the rest. We have many strong
> regional banks which will quickly step up to play major roles in
> banking that are not burdened with the enormous problems of the largest
> banks."
>
> Mr. Wood,
>
> I'm no big fan of the current stimulus plan(s), and agree we're at
> risk of our own "Japanese decade" (or worse), but I'm not certain
> how many "strong regional banks" there are to step up to the plate.
> Granted, they avoided getting involved with many/all of the exotic
> debt instruments that plague the bulge bracket banks, but they were
> certainly big players in the CRE market, and that particular shoe
> is looking like its starting to drop.
Let banks be banks, insurance companies be insurance companies! The banks' business is to accept deposits and make loans; insurance companies' is to insure your health, life and property. The governments's role is to govern to make sure we have a peaceful society, to honor The Bill of Rights, not to dictate how businesses should be run.
Charity begins at home. Bring the troops back; stop sacrificing young innocent lives. Stop supporting dictatorship countries like Pakistan and most oil-rich Middle East Countries. Charity begins at home.
Dodd and Frank won't be re-elected but they'll write books and work as lobbyists in DC, and will become very very rich. What a system we have here! I get a headache just thinking about it.
First things first. Herr Obama should wake up from his Cloud Nine slumber and get rid of Geithner. Let's pray that Bernanke wake up too and resign. Flooding the world with cheap dollars would just worsen an already nightmarish situation. What are these guys thinking?
On Apr 05 10:57 AM Glen L. wrote:
> Lone Ranger to Tonto: "If we ride straight at those Apaches surrounding
> us with our guns blazing, maybe we can escape this trap!". Tonto
> to Lone Ranger: "What do you mean WE, white man?"
>
> The point being, the author and many of the commenters keep saying
> WE should do this or that; you all want to second guess the central
> planners and institute your own version of central planning. If,
> instead, WE did nothing except mind our own business to the best
> of our abilities, and fired the central planners, we would not be
> in this mess in the first place, but since we are, starting to reject
> central planning now is the only way out. As you all seem to realize,
> we are in for either massive inflation or at least a decade of depression
> (maybe both as the feds try all available money manipulation options);
> so to my mind, biting the bullet means adopting the attitude of the
> much-maligned Warren G. Harding, and letting the FREE market sort
> out its own problems, leaving the taxpayers out of it. And no, Dave
> Wrixon, it is never too late to restore freedom to the marketplace.
>
>
> Never forget that all political solutions favor one or more special
> interests over all others. The possibilities for corruption, cartel-forming,
> and other evils in the current bailout climate are endless. Asking
> politicians to act responsibly with trillions of dollars, deflated
> or not, at their disposal is asking for the worst economic disaster
> in human history. How many zeroes in the number before we, as individuals,
> just say no and throw the bastards out?
You are a voice of reason, and judging from your "Profile" you appear to have the experience to understand the issues. I fully agree that biting the bullet late is better than never, and that the only way to ensure long-term prosperity is to let natural market forces bankrupt all irresponsible and incompetent gamblers. Those who cannot properly assess risk should not be bailed out and entrusted with allocating society's capital resources.
One poster suggested that it's too late to bite the bullet, as this should have been done four years ago. My opinion is that we should never have put ourselves in a position to need to bite the bullet in the first place, and all it would have taken is to put experienced and thoughtful individuals at the helm of the fed, instead of self-promoting pop-stars like Mr. Greenspan. Like you, I fear that repeating his failed policies now, in amplified form, will bring greater economic disaster down the line.
When Hank Paulson, acting in the interest of GS, pushed TARP 1 through a Congress and Executive that had no sense of Economics, much less their oath of office--the die was cast and bailout of The Banks was the done deal. Siphoning sovereign wealth through AIG was another piece of the same pie.
The TARP 1 vote set the policy course and included the votes of both presidential candidates. Since then, more dominoes have fallen, and more will continue to fall, the course was set with TARP 1.
See millercenter.org, The Miller Center of Public Affairs,
for the Presidential Speech Archive. The archive contains
three speeches made by Harding describing his normalcy
approach to public and economic matters.
On Apr 05 10:57 AM Glen L. wrote:
> Lone Ranger to Tonto: "If we ride straight at those Apaches surrounding
> us with our guns blazing, maybe we can escape this trap!". Tonto
> to Lone Ranger: "What do you mean WE, white man?"
>
> The point being, the author and many of the commenters keep saying
> WE should do this or that; you all want to second guess the central
> planners and institute your own version of central planning. If,
> instead, WE did nothing except mind our own business to the best
> of our abilities, and fired the central planners, we would not be
> in this mess in the first place, but since we are, starting to reject
> central planning now is the only way out. As you all seem to realize,
> we are in for either massive inflation or at least a decade of depression
> (maybe both as the feds try all available money manipulation options);
> so to my mind, biting the bullet means adopting the attitude of the
> much-maligned Warren G. Harding, and letting the FREE market sort
> out its own problems, leaving the taxpayers out of it. And no, Dave
> Wrixon, it is never too late to restore freedom to the marketplace.
>
>
> Never forget that all political solutions favor one or more special
> interests over all others. The possibilities for corruption, cartel-forming,
> and other evils in the current bailout climate are endless. Asking
> politicians to act responsibly with trillions of dollars, deflated
> or not, at their disposal is asking for the worst economic disaster
> in human history. How many zeroes in the number before we, as individuals,
> just say no and throw the bastards out?
You Cant stop it its like tryinmg to stop a Tornado
If the Afagan people want to be free Arm them and let them fight , they won't ! No its Americans alone who 'll fight and die ! and Nato won't send ONE single Combat Troop!! Now Im NOT a peace nik Im a old Marine Vet of Nam, I enlisted in 1966 , I hated the hippies thats the main reason , unfortunaetly the hippies lived and inherited Corporate America and 55K Brave Young Men Died and 100K came home maimed for life and another 250K with mental and emotional issues thats where I fit in . Bottom Line War is a terrible Waist ,, but Thats Americas Main Export War and Arms because its how most of corporate America makes there Profits in one way or another. Thats what our Economy is really about Tanks , War Planes , Missle s and the like . It makes Up about 70% of our industrial economy , the Gov never tells You that !!
Unless this crew is removed from office, we are in for a decline that is much much worse than the years of double digit unemployment and deficits that Canada had.
Ryan L. Morelli:
I find your tome posted above, very presumptious: if you have a blog elsewhere, just tell us about it in a short paragraph with your URL placed therein. Instead, you burden us with your entire set of opinions. Bad form!
It is real easy folks
Regan Wreckonomics did exactly what is capable of, it failed
Our nation needs massive cardiac surgery to survive, and the administration is trying
Regardless of what they do, it is possible Bush and the "conservatives" who have shaped our economy since Reagan may just have destroyed our country
But, if we make sure the "conservatives" never get control again, and we all decide that as Americans we MUST be part of the solutions, our nation will be stronger and better than ever before.
By failing to recognize thier philosophical failures, and exhibiting nothing more than demial and attempting to block any change in the nations direction, "conservatives" are exhibiting loyalty to thier failed beliefs, and total disdain for the country those beliefs have economically ravaged.
On Apr 05 07:47 PM brahmburgers wrote:
> Americans, in particular, don't really produce much in the way of
> useful tangible items. GM and such large Corps had chances, but chose
> to make overwrought SUV's and now realize their mistake is causing
> their demise. GM and others, with their engineering skills and production
> facilities could have make useful products, lean and expensive, maybe
> even alternative power items. Instead, 99% of Americans produce nothing
> of worth, yet they fiercely covet whatever payments they get for
> SSI and other hand-outs. Plus, the major reason for the financial
> meltdown, and its ensuing hand-wringing is to preserve the sacred
> concept of credit which enable consumers to spend beyond their means,
> and which enables companies to stay afloat from week to week. As
> for services, well, that's what the paper-pushing bankers/insurers/stock
> traders were supposed to provide. They screwed up big time, now they
> want the Feds to speed up the printing presses at the Commerce Dept,
> to flood them with replacement money - for the bad decisions fueled
> by greed.
On Apr 05 10:40 AM ryan morelli wrote:
> JAMES WOOD, YOU ARE ABSOLUTELY WRONG. YOU AND EVERYONE OF THOSE WHO
> COMMENTED. IF ANY OF YOU WANT TO SPEND SOME TIME AND UNDERSTAND WHAT'S
> HAPPENING READ THIS BELOW OR GO TO MY BLOG. I CANNOT ATTACH THE GRAPH
> HERE.
>
> The misinformation and confusion disseminated by financial newspapers
> and TV programs is astounding.
>
> Glen Beck of Fox news recently had an aggressive piece on the US
> dollar becoming worthless due to the coming runaway inflation. Mr.
> Beck at Fox, like most everyone at CNBC, is going bonkers over the
> Federal Reserve printing money and the coming supposed inflationary
> Armageddon. It seems to me they don’t understand what they are talking
> about because they only tell half of the story. CNBC, arguably the
> biggest financial news program by viewership affectionately calls
> itself, ‘The best of the best’ or ‘The only business network that
> has the information and experience you need’. Every day on their
> program they have guests and panels of so called, ‘market mavens’
> or ‘experts’ overwhelmingly spewing misguided information which is
> nothing more than self serving spin.
>
> My personal favorite was a prediction CNBC made in December 2008.
> Larry Kudlow, one of their pundits said, ‘we are now officially in
> a recession and now we know it began one year ago’. What? I almost
> fell out of my seat. Let me get this straight. Larry Kudlow and 95%
> of their featured ‘experts’ and regular pundits were proclaiming
> for all of that year that we were avoiding a recession. They claimed
> the stock market was going to stay flat and have moderate growth.
> They also said we would have a ‘soft landing’ in real estate, remember
> that phrase?(A soft landing infers no crash) If you watched CNBC
> you will recall they said numerous times a day for a year. During
> this time the Dow Jones Industrial Average decreased. It didn’t stay
> flat or increase, but dropped from 14,000 to 8,000, a loss of more
> than 40% in just over a year! They also spoke about the soon resurgent
> bull market; but, there is no bull market. The market continued to
> drop as they fostered false hope. Again, this is a network that calls
> themselves, ‘the best of the best’ and ‘the only business network
> that has the information and experience you need’. Another glaring
> example is one of CNBC’s most popular talking heads Jim Cramer. He
> proclaimed that Bear Stearns stock was not only a hold, but a great
> buy at 60 dollars per share. This was one week before it went completely
> out of business and plummeted to 0. This brings me to purpose for
> my letter. I’d like to clear up a large misconception that most news
> organizations are creating, the concept of inflation from the printing
> of dollars. It’s astounding to me that there isn’t a person anywhere
> on TV or in the Main Stream media that’s getting this issue right
> or giving other viable alternative outcomes except for inflation.
> Perhaps the main problem is most people have no idea how money is
> created in our system.
>
> Let’s first look at few definitions.
>
> Monetization – the third definition is most important and what causes
> inflation, 1 and 2 mean nothing without 3.
>
> 1. To establish as legal tender.
>
> 2. To coin (money).
>
> 3. To convert (government debt) from securities into currency that
> can be used to purchase goods and services
>
> Inflation
>
> 1. The act of inflating or the state of being inflated.
>
> 2. A persistent increase in the level of consumer prices or a persistent
> decline in the purchasing power of money, caused by an increase in
> available currency and credit beyond the proportion of available
> goods and services.
>
> Deflation
>
> 1. The act of deflating or the condition of being deflated.
>
> 2. A persistent decrease in the level of consumer prices or a persistent
> increase in the purchasing power of money because of a reduction
> in available currency and credit.
>
> Monetization is a key aspect to understanding the issue of inflation.
> If the TV pundits were having an accurate discussion about these
> issues they would put more focus on concept of monetization, not
> how much money is being printed. When the government prints money
> this does not automatically mean we are going to have inflation or
> a sinking dollar. In fact deflation is what we have now, the opposite
> of inflation, (re-read the definitions). If the money being printed
> does not get into the hands of the consumer, it is not inflationary
> or in economic terms ‘monetized’. Banks do not loan money to people
> who are broke, who have too much debt, who are losing their jobs,
> and whose homes are worth less than their mortgage. Right now our
> entire world is witnessing record amounts of money/debt being destroyed
> by massive decreases in the price of everything like we’ve never
> seen before in history. Debt destruction is difficult to conceptualize.
> You must first understand that money is debt. As an example: When
> the worth of your home is less than what you owe, and this trend
> continues along with the loss of jobs, people stop paying their debts.
> In turn the banks absorb these debts and can no longer keep lending.
> As this cycle continues, prices go down, and banks go out of business.
>
>
> Here are two important facts. Debt destruction is money destruction
> and credit is money or purchasing power. Credit is how 95% of people
> buy homes, cars, even food and where has the credit gone? Money and
> credit are synonymous. When credit is revoked or decreased and debt
> payment slows and/or stops, money creation ceases to exist and deflation
> ensues. Many Americans, including people I have personal contact
> with have seen a decrease in the credit offered to them from their
> home equity lines, and their credit cards. Some people’s available
> credit has been shut off altogether! The increase which was inflationary
> has already happened, the pundits are 15 years late! Did the properties
> in your neighborhood triple from 1995 - 2005? Why did they? It’s
> interesting we hardly heard a peep about runaway inflation or a collapsing
> dollar until now!? We were in a huge inflation due to the biggest
> housing, stock market, and commodity bubble in history and now that
> it’s over, we are hearing about inflation ad nauseam? Reference the
> attached chart to view what true monetization looks like to see what
> creates inflation. This IS NOT what’s happening today. Today banks
> are not lending anywhere near the level they lent in the past so
> outstanding debt is falling as people/companies gradually repay their
> loans or default on them. This contracting of outstanding credit
> as I have detailed above leads to deflation as money is destroyed.
> Even when debt is repaid deflation ensues if banks aren’t lending
> it back out, which they are not. Banks need to expand credit for
> inflation to actually kick in and you do not see that happening to
> any level as seen in previous years. In fact, it is decreasing as
> I just detailed. Now that the bubble is bursting there is talk of
> inflation. Why? People hear the government is printing money and
> they misunderstand the implications. We know from the snippet of
> information I detailed above that financial pundits being wrong is
> not an abnormal concept, it’s a common theme! Right now if you have
> any US dollars the buying power of those dollars are getting stronger.
> This means you can buy more today at a lesser price than last year,
> this is the textbook definition of deflation NOT inflation. The dollar
> index has soured over the past 6 months. Again, if it was devaluing
> the dollar why has the dollar been up against just about ever currency
> in the world during the last 6 months? It’s not devaluing the dollar,
> that’s why. Could we have runaway inflation at some point way off
> in the future? Sure, but first we’re going to have a massive deflation
> and depression. This is because the money that’s going to the banks
> is not being lent, it’s being hoarded and the banks are buying treasuries.
> Our credit is shrinking, jobs are shrinking, net worth’s are shrinking,
> and taxes are on the rise. This is not inflationary!!
>
> Again, inflation is what took place over the past 10 plus years ending
> just a few years ago when the Federal Reserve, (a private banking
> cartel who will not tell us where our bailout money is going) printed
> money and pumped it into our hands by lowering lending rates at breakneck
> speed. At the same time lending standards became non-existent allowing
> everybody and their brother to borrow money to buy just about anything
> they wanted from cars, homes, collectibles, even boats and jet skis,
> and we know what good investments they are. Prices went to the moon
> and this is called INFLATION. Please re-read the definition of inflation
> and tell me without borrowing or increasing credit how we can have
> inflation again? The media is wrong. Visit this link greatdepression2006.bl...
> and read what the mainstream media, government officials, those akin
> to Warren Buffet of that day, and the Harvard Economic Society who
> was the CNBC and Wall Street Journal of the 20’s and 30’s had to
> say. They got it wrong. They said everything was great just months
> before the greatest stock market crash in history where the market
> fell 80%. Nothing has changed today with information except for maybe
> a faster medium to disseminate it, namely, Internet and TV.
>
> Say you have $1,000,000 dollars in cash that gets burned in a fire.
> That money is obviously no longer in the system because it’s been
> turned into ash. Therefore if another $1,000,000 is printed and monetized(put
> into the system or in this case in you’re hands) to replace that
> ash, is that inflationary? Does this printing of money cause prices
> to rise? Does it make the existing dollars in the system worth less?
> This is the misconception. People hear about the printing of dollars
> and say, ‘runaway inflation is coming’. Wrong. Not only is that wrong
> because it would only be replacing what was lost, IT IS NOT BEING
> LOANED OUT, it is not being put in the hands of spenders as I explained!
> It doubly wrong, wrong on both fronts. Again, we may be creating
> more money but it’s not going back into that house to replace that
> burnt money, it’s staying with the banks. Therefore, it’s NOT INFLATIONARY
> and NOT MONITIZATION! In order for it to be inflationary banks need
> to restart lending at a level greater than they have in the past!
>
>
> In summary your CNBC, nightly news, Wall Street Journal, Forbes magazine
> and the like are all getting their information from the same source
> plagiarizing each other. There are many people out there that can
> read between the lines but you are not going to find them in the
> mainstream media. Inflation is what we had over the last 15 years
> except the last couple of years where we have seen deflation take
> root. Today people are going broke faster than ever before in history,
> jobs are being lost faster than the Great Depression, loan defaults
> are breaking records, banks are loaning at a fraction of what they
> were in the past. All of this is the textbook definition of deflation
> but the TV is calling for runaway inflation, I’ll be damned. I’ll
> leave you with this logic to better explain why printing money does
> not necessarily mean inflation. A punching motion can cause a facial
> injury, but a punching motion is not a facial injury. A facial injury
> is not the cause of punching motions. Likewise money supply inflation
> (printing money), can cause price increase, but money supply inflation
> is not price increase and price increases are not the cause of inflation.
> Cause causes effect, cause is not effect. Dollars are scarce, which
> is anything but inflationary. It stands to reason that the governments
> of the world all doing quantum easing at the same time means we are
> in a heap of trouble. The world governments are not printing money
> at breakneck speed to buy their own debt because this is a temporary
> problem, we are in a global depression even if CNBC and the smartest
> minds on ‘TV’ aren’t telling you so. Remember to reference my link
> above on the Great Depression, those who do not study history are
> doomed to repeat it.
>
> Ryan L Morelli
>
You don't cure a problem by adding more to the problem. I would hate to be on a boat with these fools that springs a leak. Drill a hole in the bottom to let the water out !! do we see anyone from the government taking any heat. Too much way too much. Who told the banks they had to lend to people who could not afford a loan. who set up FANNY. Who spends trillions they don't have and bills it to my grand kids. Bernie was a piker compared to the government ponzie schemes.
North
good article.
Instead, Wall Street is directing their bought and paid for DC minions to re-inflate the economy because Wall Street loaned money for, bought, packaged, sold and credit default swapped trillions of dollars worth of derivative investments backed by overpriced real estate and are now in risk of losing their behinds as the phony economy fails. The best way to curtail excessive risk taking by private companies is to let them fail when they make bad decisions. Otherwise we are subsidizing their mistakes and encouraging them to pursue ineffective business practices. Do we really want to subsidize the effete elite with our tax dollars? If so, then its then end of the US as an effective and dominant global economy. In a global market, there are always smaller, more conservative, better run companies that can take their place. In the auto market, this is amply shown by the increasing presence of more efficient foreign car makers in the American market (Honda, Nissan, Toyota) since the American car-making dinosaurs forgot how to turn a profit. If Congress hadn’t set a bad example for Detroit by bailing them out years ago, perhaps they would have learned their lesson and been more competitive today.
Congress is busy socializing trillions of dollars of private debt by giving hundreds of billions of taxpayer dollars to many of the companies who engineered these high risk financial schemes or carelessly supported them and by increasing federal spending by trillions more than the economy can afford in the vain attempt to support the value of worthless investments back by overpriced real estate. Of course, we want to support innovation and new product development but do we really want to support inefficient or fraudulent business practices. That is simply throwing money away and making a laughingstock of the US Government and our economy.
Many of the working folks who supported Obama are on the receiving end of this rip-off and their social security, pension funds and job opportunities are vanishing into thin air. The only way capital markets can work is if they are allowed to clear themselves without government interference.
While used to be working class Americans are moving into tents, Obama is whoring around the continent with Euro-political fat cats and his wife is competing with their wives to see who can buy the most expensive dress. They both look ridiculous! Oh well, no change here, looks more like business as usual. The DC Clown Show continues.
I agree they are all crooks, I just find it hard to believe they are that smart.
On Apr 05 10:57 AM Glen L. wrote:
> Lone Ranger to Tonto: "If we ride straight at those Apaches surrounding
> us with our guns blazing, maybe we can escape this trap!". Tonto
> to Lone Ranger: "What do you mean WE, white man?"
>
> The point being, the author and many of the commenters keep saying
> WE should do this or that; you all want to second guess the central
> planners and institute your own version of central planning. If,
> instead, WE did nothing except mind our own business to the best
> of our abilities, and fired the central planners, we would not be
> in this mess in the first place, but since we are, starting to reject
> central planning now is the only way out. As you all seem to realize,
> we are in for either massive inflation or at least a decade of depression
> (maybe both as the feds try all available money manipulation options);
> so to my mind, biting the bullet means adopting the attitude of the
> much-maligned Warren G. Harding, and letting the FREE market sort
> out its own problems, leaving the taxpayers out of it. And no, Dave
> Wrixon, it is never too late to restore freedom to the marketplace.
>
>
> Never forget that all political solutions favor one or more special
> interests over all others. The possibilities for corruption, cartel-forming,
> and other evils in the current bailout climate are endless. Asking
> politicians to act responsibly with trillions of dollars, deflated
> or not, at their disposal is asking for the worst economic disaster
> in human history. How many zeroes in the number before we, as individuals,
> just say no and throw the bastards out?
the..." creators of these new options had come up with something that was too complex to understand, as well as not understanding the technology used to create them". (paraphrase)
Would you agree with this?
On Apr 05 01:12 PM James Wood wrote:
> Your question is very legitimate. The commercial real estate market
> is going into the tank and there is a strong holdover of unresolved
> mortgage credit in the regional banks. However, the "falling shoe"
> which most concerns me is the derivatives exposure (particularly
> the CDS's and interest rate swaps) which are most centered in the
> big banks, hedge funds, private equity and investment banks. Judging
> by the FED's actions, it is this type of problem that they are most
> worried about. If this "shoe drops", we have truly systemic risk
> to the system and we are faced with a much graver set of circumstances
> to deal with. In this scenario, the regional banks have a much better
> chance of surviving without government aid.
In one year, no one will remember what kind of cockeyed statements you made, but Obama has to bear the bureden of his decisions for all of history.
We have plenty of critics but not many people linging up with workable answers. Biting the Bullet is what happened with Lehman Bros. If Citi, B of A, JP Morgan, Goldman Sachs, ING, AIG, et al go bust, we won't be able to buy a bullet!!!
On Apr 05 10:57 AM Glen L. wrote:
> Lone Ranger to Tonto: "If we ride straight at those Apaches surrounding
> us with our guns blazing, maybe we can escape this trap!". Tonto
> to Lone Ranger: "What do you mean WE, white man?"
>
> The point being, the author and many of the commenters keep saying
> WE should do this or that; you all want to second guess the central
> planners and institute your own version of central planning. If,
> instead, WE did nothing except mind our own business to the best
> of our abilities, and fired the central planners, we would not be
> in this mess in the first place, but since we are, starting to reject
> central planning now is the only way out. As you all seem to realize,
> we are in for either massive inflation or at least a decade of depression
> (maybe both as the feds try all available money manipulation options);
> so to my mind, biting the bullet means adopting the attitude of the
> much-maligned Warren G. Harding, and letting the FREE market sort
> out its own problems, leaving the taxpayers out of it. And no, Dave
> Wrixon, it is never too late to restore freedom to the marketplace.
>
>
> Never forget that all political solutions favor one or more special
> interests over all others. The possibilities for corruption, cartel-forming,
> and other evils in the current bailout climate are endless. Asking
> politicians to act responsibly with trillions of dollars, deflated
> or not, at their disposal is asking for the worst economic disaster
> in human history. How many zeroes in the number before we, as individuals,
> just say no and throw the bastards out?
Check it out: www.sfgate.com/cgi-bin...
March auto sales:
GM - 156,380
Ford – 131,102
Chrysler – 101,001
Total Detroit 3 = 388,483
Toyota – 132,802
Diamler – 17,342
Volkswagen – 15,270
Nissan – 66,634
Honda – 88,379
Total transplant 5 sales = 320,427
Instead of a long dissertation, you could have stated that money is created by granting loans and money destroyed when those loans are repaid. Enough said! Can you tell us the current money supply of the U.S.A., now and before the meltdown?
Are you also telling us that the 2 trillion dollars we owe the Chinese alone is not monetized? Are we at least paying interests on those loans?
On Apr 05 09:10 PM Dan H wrote:
> Right. It all depends on the balance between how much money has been
> lost and how much is being printed. The intent of the Fed to buy
> treasuries is obviously "printing money". Does the Fed give us enough
> information on how much has been destroyed and how much has been
> printed? If we borrow trillions of dollars using tbills which the
> Fed prints money to purchase, because no one will loan us the money...
> this counts on the inflationary side. If the Chinese were not concerned
> with the value of the $, they might continue to loan us more money.
> I have no "crystal ball" but at some point the efforts to reinflate
> our economy will take effect. Things are so broken now, who knows
> what the dynamic will be?
So pundits - here’s my suggestion for the auto industry (it’s not bite the bullet):
Restrict imports to the level that are exported to those same countries (reciprocation) so we can get through this…or put up the money and shut up - it really is that simple.
On Apr 06 02:50 PM slowdown wrote:
> The Detroit 3 OEMs sold more vehicles than all of the rest of the
> transplants combined for the month of March. Knowing what we know
> today about the threads of the domestic auto industry woven into
> our economy…I hardly think bite the bullet is the appropriate answer.....and
> how 'bout those Spartans??? Pretty darn good for car makers that
> build cars nobody wants and a bball team that according to the pundits
> lack talent and athleticism and size. I say to hell with the pundits
> on all fronts - GO DETROIT - GO GREEN GO WHITE- STATE ALL THE WAY!
>
> March auto sales:
> GM - 156,380
> Ford – 131,102
> Chrysler – 101,001
> Total Detroit 3 = 388,483
>
> Toyota – 132,802
> Diamler – 17,342
> Volkswagen – 15,270
> Nissan – 66,634
> Honda – 88,379
> Total transplant 5 sales = 320,427
The next shoe to fall in this mess is the credit card defaults, followed by the commercial realestate failure, which will drag down insurance & collapse the tax base in cities/states = lead to more civil unrest.
The old system is too corrupt and too rotten. It is beyond a repair. Consequently, there is no need to even save it wasting any more money and efforts in doing so.
Regardless of our economic and/or political elite likes it or not, we are about to witness and participate in major changes.
Obama was right when he promised us changes if he would be elected. However, these changes will be quite different from what Obama had in mind or even dreamed about. I am confident that Obama will not like the coming changes but he will be powerless to do much about it. For most of our politicians these changes will be nothing less than a nightmare.
On Apr 06 10:15 AM Pat Collins wrote:
> One really good thing about being a Blogger or Critic of Obama and
> government is that you don't have to be right. Obama does!!
>
> In one year, no one will remember what kind of cockeyed statements
> you made, but Obama has to bear the bureden of his decisions for
> all of history.
>
> We have plenty of critics but not many people linging up with workable
> answers. Biting the Bullet is what happened with Lehman Bros. If
> Citi, B of A, JP Morgan, Goldman Sachs, ING, AIG, et al go bust,
> we won't be able to buy a bullet!!!
>