Bloomberg Reports Extreme Recession: I'm Shocked

Bloomberg reports the economy is worse than previously thought and, indeed, the worst since the Great Depression. (See here.) Wow, I am simply shocked. Not shocked at the news but shocked that this is just now coming out. Anyone who can fog a mirror should know this already. The fact that official stats are just catching up is what is shocking.

So why is the market at a point where the P/E on the S&P is 24? You tell me.

And Another One (or Five) Down

Five more banks down for the count. (See here.) That makes 69 (no jokes please) this year. That is more than in all the years the last decade combined. It does not compare to the S&L crisis in terms of number of institutions but comparisons in terms of dollar are becoming significant. What's a few billion here or there after the trillions in support we have just had?

Cash for Clunkers

Okay, I cleaned out my 1995 Ford Explorer (F) with 171,000 miles on it last weekend and accidentally threw away the registration. While I am in the process of replacing it, so I can do the Cash for Clunkers deal, the deal is stopped. There are rumors it will resume and have more money, which I hope happens - for personal reasons.

While I acknowledging my personal desire to take advantage of it, I must say I am disgusted that we have back stopped AIG (AIG) for many tens of billions that could have been spent on this worthwhile program that reduces gas consumption and pollution while helping car companies. This is simply disgustipating that we have spent our money where we spent it.

By the way, billions of the AIG money flowed directly to Goldman Sachs (GS) on CDS obligations (Paulson's company) and they are giving out good bonuses with our money.

Like I said - disgustipating.

Disclosures: I have a clunker.

Comments

[Roger Knights:]

"Disclosures: I have a clunker."

LOL!

Aug 02 11:54 AM

[UbuTranscen...:]

Craig,

Be calm, breathe deeply. As outre as it might seem, Bloomberg may even publish an article before the year's end that double-digit unemployment during a protracted global meltdown is more than just a lagging indicator.

Just wanted you to be prepped, no sense in risking a cardiac 'event', you know.

Regards, Ubu.

Aug 02 12:24 PM

[mushrumps:]

Well, I am "disgustipated" with the clunkers program: 1) merely takes from future sales; 2) subsidizes the few who can afford to buy a new car with taxes and higher costs on those who cannot; 3) worst of all, deprives tens, maybe hundreds of thousands of potential buyers of serviceable transportation for $500 or so (think pizza, paper delivery people, etc.!)

Aug 02 12:37 PM

[User 465080:]

get real
cash for clunkers does the following:
fills state coffers at a time when they are empty with taxes from sales of new vehicles, I bet the Governors will love this part.
helps tame record unemployment, the closed and idled factories will be up and running to help back fill the vehicles being sold as a result of the program. this also reduces the stress on the states unemployment insurance accounts. also, dealerships probably won't have to lay off more people; maybe hire some back!
Last but not least, this is the "first" stimulus program that "directly" touches people on Main and Side Streets of America. The money sent to AIG and all the other big guys never got down to us little guys and you would have the nerve to discontinue the program. Waite till you try to get reelected, we will be waiting to help you out of office!!!

have you seen what is being taken off the road never to go back on. these vehicles are guzzlers and have old emission technology that have major carbon foot prints compared to what the replacement vehicles have. the environment is a hugh winner here

Aug 02 08:52 PM

[Joyful Alte...:]

This program will also help those states that tax cars as personal property: Clunker owners pay peanuts; new car owners pay a lot.

Aug 03 09:41 AM

[Elmikeo:]

Doesn't it also make you mad that AIG had the opportunity to sell assets to other companies and make MORE money? I feel like going bankrupt would have been better for the economy. As it is, the rich are getting richer..and everyone knows the end of that statement.

Aug 04 05:31 AM

[delta 777:]

Cash for clunkers is hardly a fair or equitable use of taxpayer dollars-people usually own clunkers for two reasons: either they are too poor to buy a better car (and therefore are too poor to buy an new car), or-if they are wealthy- they have kept the clunker as a secondary back-up car because it was worthless to sell or trade it in. Cash for clunkers selectively rewards the second group, while providing no benefit for those owners who were either prudent or sufficiently conscientious to dispose of a clunker as soon as possible. A possible third group: those who are wealthy enough to have given/sold their clunker to their kids, and now are wealthy enough to arrange an upgrade.
In all cases, despite the immediate gratification boon this gives to auto makers, this program will quickly reflect in future lower auto purchases.
It is also obvious from actual sales information that, in general, the new vehicles purchased under this program are far from being true economy cars.
Cash for Clunkers constitutes investment of taxpayer dollars to a select few individuals for consumable items; as opposed to using this taxpayer money to create infrastructure that will be of lasting benefit to the taxpayer that pays for it. (in addition to the obvious immediate creation of broad-based jobs)


On Aug 02 12:37 PM mushrumps wrote:

> Well, I am "disgustipated" with the clunkers program: 1) merely takes
> from future sales; 2) subsidizes the few who can afford to buy a
> new car with taxes and higher costs on those who cannot; 3) worst
> of all, deprives tens, maybe hundreds of thousands of potential buyers
> of serviceable transportation for $500 or so (think pizza, paper
> delivery people, etc.!)

Aug 04 01:45 PM

[Craig Brown:]

I agree that the program, which touted its prime objective as gas mileage/environmental, needed a much wider differential between the clunker gas mileage and the new car mileage. I am thinking at least 7 miles per gallon and perhaps as many as 10. Seriously, if you have a clunker at 17 miles per gallon, you can have good impact moving up to 27 or so, combined. And so goes most compromises between Democrats and Republicans. Two competing objectives, when compromised to achieve resolution, achieve no well defined result. Sad but true - though sometimes we like it that way.


On Aug 04 01:45 PM delta 777 wrote:

> Cash for clunkers is hardly a fair or equitable use of taxpayer dollars-people
> usually own clunkers for two reasons: either they are too poor to
> buy a better car (and therefore are too poor to buy an new car),
> or-if they are wealthy- they have kept the clunker as a secondary
> back-up car because it was worthless to sell or trade it in. Cash
> for clunkers selectively rewards the second group, while providing
> no benefit for those owners who were either prudent or sufficiently
> conscientious to dispose of a clunker as soon as possible. A possible
> third group: those who are wealthy enough to have given/sold their
> clunker to their kids, and now are wealthy enough to arrange an upgrade.
>
> In all cases, despite the immediate gratification boon this gives
> to auto makers, this program will quickly reflect in future lower
> auto purchases.
> It is also obvious from actual sales information that, in general,
> the new vehicles purchased under this program are far from being
> true economy cars.
> Cash for Clunkers constitutes investment of taxpayer dollars to a
> select few individuals for consumable items; as opposed to using
> this taxpayer money to create infrastructure that will be of lasting
> benefit to the taxpayer that pays for it. (in addition to the obvious
> immediate creation of broad-based jobs)

Aug 05 09:10 PM