jdl51

Federal Rescue: Unthinkable Trillions

Much of this chart is guarantees, I believe. So if the underlying assets perform, commercial paper, mortgages are paid off, etc., these amounts will be paid off and there is no liability for the taxpayer. Your article gives the false impression that this is money that is being spent with no hope of recovery. The stimulus package is the only part that won't be paid back. The rest, including bailout money, if things work out, will be returned or the guarantees will no longer be needed. Worst case scenario, if the world economy collapses none of this will make any difference anyway. We'll all be screwed.

The Vicious Cycle of a Falling Dollar

The rest of the world is laughing at us all right. But they're laughing because instead of making our cars more fuel efficient and implementing an energy policy that makes us less dependent on foreign oil, we've done the opposite. Europe gets a lot more mileage per gallon of gas than we do. France produces most of its electricity from nuclear. Spain has had windy days that has produced close to 50% of their electricity from windmills. Meanwhile we're importing 70% of our oil from folks like Chavez and the middle east. There is no way we can make up anywhere near that by drilling here. We send hundreds of billions a year overseas for energy. It would be much better to keep it here at home and develop our own alternatives like other countries have. Just common sense considering fossil fuels will only get more and more expensive.


On May 29 01:01 PM MarkitWacha wrote:

> The cap-and-tax system would also be bullish for solar for the same
> reason, since it relies on expensive electricity to be financially
> feasible.
>
> The one thing that is definitely BEARISH about the cap-and-tax is
> YOU and ME paying HIGHER electricity costs, using up more of our
> disposable income for the SAME good, and watching as the rest of
> the world LAUGHS at us for doing it.

Is the U.S. Dollar Headed for a Mighty Crash? Part II

"Everyday I spent alot of mind energy in an attempt to "obama proof" my portfolio and protect it from the disaster in the the making."

If we had all spent a lot of time Republicanizing our portfolios the past couple of years, we would be in great shape. The "disaster in the making" has been in the making for eight years now and we are bearing the fruits. Our problems didn't start on January 20, for those of you with selective memory. Bush's last budget that he submitted had a projected deficit of $1.2 trillion and, of course, with Iraq and Afghanistan off budget not included in that figure. But somehow Obama is ruining the economy even though his first budget won't take effect until next year.

As far as the commodity crisis now being touted everywhere, oil production by OPEC, Russia, etc. has been cut back. Oil inventories are close to all time highs, both in storage tanks and tankers at anchor. Gas prices are rising now because refiners are cutting back production and manipulating the market, as usual this time of year. POT just announced that they have cut back production due to lack of demand. Factory utilization worldwide is at the low end of the spectrum, which would depress steel, etc. Japan's economy shrank 15% last quarter. Just because China is stockpiling doesn't mean that there is a rise in demand by consumers. Demand creates inflation. No demand, no pricing power. The U.S. is 28% of the world economy. The EU and UK are in recession at least as bad as our. With that large a percentage of consumers on the ropes, higher prices are not the problem at this point in time. Talk to me in a year or two and things might be different.

With Commercial Real Estate's Bleak Outlook, Tread Lightly

I keep hearing about the commercial real estate crash but SRS keeps falling and is near its low. Someone is driving the commercial REITS up.

Dollar Chart Tells a Much Different Story than Pundits Do

The Euro was worth 1.20 dollars nine and a half years ago, before the Bush administration added over $7 trillion in debt. It's now around 1.38, a whopping .18 cents difference and a lot of that was just in the past couple of weeks. If the ECB had dropped interest rates another .25 or .50 percent even that difference would disappear.

GMAC and Its Impact on Ford

So I guess under that logic Toyota and Honda will suffer also? Ford's health is also in the government's best interest and they could even decide to extend GMAC financing for all U.S. automakers if it lends at below market rates to even things out. What's your thinking under that scenario? I'm long F by the way. Still think the train has a ways to go.

Gaping Hole in the Deflation Argument

It's quite possible that inflation may be an issue down the road, but at the present time, with the psychology of the American consumer being what it is, there is no demand for goods and services. Absent demand, it's hard to see inflation being much of a problem for the next few quarters. Add the rest of the world's consumers who are also hurting we're not just talking about a U.S. phenomenon. And now the banks are cutting everyone's credit limits putting a huge dent in purchasing power, still rising unemployment, whole industries going into bankruptcy or collapsing altogether, housing bouncing along the bottom at best and banks unwilling to give home equity loans on deflating collateral all contribute to an increasingly weaker consumer that would have to be the fuel behind an inflation scenario. The markets may feel that the Fed's printing presses will inevitably cause more inflation and start bidding up commodities, but if consumers aren't in the mood to spend it will only result in another commodities bubble, similar to what we had last summer, and with another commodities crash. I think most central bankers would welcome a wee bit of inflation at this point in time to nudge us out of our deflationary spiral.

Is the Economy at an Inflection Point?

The world economy is still at a tender state, but with trillions being thrown at the problem worldwide, it would be surprising if there wasn't at least a small bounce up. The plan is to see if it can be self sustaining and build on its own as government help is withdrawn. That is the big bet now and and it seems that those who are betting that it might work hold a majority. That could change if indicators show continued declines, but right now they appear to be leveling off a bit giving some hope that we've put in a bottom and up will be the new direction.

3x ETFs Are Wealth Destroyers

This is a trader's market and anyone not willing to get in and out of these vehicles is passing up a good opportunity to take advantage of market volitility. I have been in FAS and FAZ for a few days at a time and have done fairly well. I'm currently in FAZ for the last couple of days and do hold it overnight. That being said, you can't leave your screen with these things because it only takes a couple of words from Geithner or Bernanke and they will turn on a dime. Definitely makes life more exciting.

On Elephants and Tea Parties

The CRA did not "force" the banks to loan to uncreditworthy borrowers. It required them to loan to areas they serviced. In other words, if you take people's deposits, you should also be willing to loan money to them if they meet your credit requirements. The default rate on loans under Carter's CRA from 1977 were in the normal range, low single digits, yet you hear repeatedly how the CRA some 30 years later was the cause of our current meltdown. Greenspan, Snow and Cox all testified before a congressional committee that the CRA or Fannie or Freddie were not at fault for the banking crisis, but lax banking standards, fraudulent mortgage brokers, appraisers, rating agencies were the culprits. The vast majority of problem loans were not even covered by the CRA and Fannie only backed loans up to $250,000 until a few months ago. How many homes can you buy in SoCal for under $250,000, yet it has the highest default rate of just about any other area. Lax or no regulation and outright fraud by ALL the parties involved in the mortgage chain and the subsequent securitization and global distribution of those securities with the multiplier effect of the CDS market has given us our present financial mess.


On Apr 19 02:18 PM realold wrote:

> Although I agree with the banks complicity, why is it that no one
> brings up the Congressional mandate to loan money to "poor people"
> so they can "buy" their own homes, and their concommitant changes
> to laws making it possible? Congress and Clinton, to some degree,
> forced banks to not "discriminate" against people who could not normally
> afford a house. The credit ranking business (Moody's, etc.) are the
> real idiots in this mess and their officers should be imprisoned.
> Politicians - what's new.

The IMF Sees No Green Shoots of Recovery

Yeah, before the UN was around everybody was lovie dovie.


On Apr 19 05:23 PM I am not a number.. wrote:

> The IMF is to prosperity as the UN is to world peace....

On Elephants and Tea Parties

The teabaggers' protests aren't rooted in deficit spending and taxes, otherwise we'd have heard from them when Bush and the republican congress ran up $7 trillion in deficits over the last eight years. And I doubt that even a majority of them are making over $250,000 a year, the line for any tax increase starting in 2011. Basically they're upset that they lost the last election and can't stand the fact that they'll be out of power for at least the next four years. What's ironic is that if they had actually stuck to the principles that they profess to believe in now and protested years before against the real culprits, we wouldn't be in the mess we're in now, they'd still be in power and the country would be in a lot better financial shape. When republicans learn that their country is more important than their party, then maybe they will again be on the road to regaining the WH.

Obama's Economics Speech: The Man Is Good

On Apr 16 09:23 AM Old Rick wrote:

> You probably also believe that the 2 month old $800B Porkulus is
> pulling us out of recession now. I guess it must be all the spending
> that is scheduled for 2012-2014 that has people excited.
>

Half of the stimulus package was tax cuts that take effect now. There's also billions to extend unemployment benefits that take effect now. Some of the construction money for roads, bridges, etc. is being spent now. I see some republican governors thumping their chests, saying they don't want the stimulus money, yet their legislators are forcing them too anyway. They've put politics and their personal ambitions before the good of their constituents.
As far as this downturn being the worst since the 1930's, I've lived through them all, worked through them all since the '60s. This is by far the worst recession that we've had in almost 80 years. Someone that doesn't think so doesn't have a clue as far as economics is concerned. Never have we been as close to complete collapse of the world's financial system as we were a few months ago. Never before has the entire U.S. auto industry been on the brink of bankruptcy and still may go over the edge. Never before has the housing market had such a prolonged and deep contraction as we're having now. I have never seen as many empty storefronts in malls as I have seen now. And now to hear republicans rant about the deficits while we're still operating on the last republican administrations' budget with a 1.3 trillion deficit and a combined $11 trillion in deficits under republican presidents since Reagan is beyond comprehension. I understand that republicans feel obligated to their party to make excuses for the past eight years and try to whitewash what happened, but sometimes you have to put country before party and common sense before ideology.

Banks Are Not Reaching Bottom - Meredith Whitney

"Banks will be forced to sell their prized assets after the government turns off the funding taps, says Whitney. The Treasury has little to nothing to show for the $350-billion in TARP money used to inject capital into the banks, and equity investors should avoid the banks at all cost."

The TARP fund was around $700 billion of which around $350 billion has been handed out to financial institutions. Some of them, GS, BAC, MS, WFC are talking about paying off their TARP money early, maybe even this year. This would still give the government more money to prop up other institutions if the need arises, not less. So I don't know how she can make a comment like that considering the present circumstances unless the bank CEOs are talking through their a$$es. Oh.........

Stock Market Rally Is for Suckers as Credit Destruction Lingers

"In the 1930s the Dow posted several major bear market rallies before finally bottoming in June 1932."

I thought FDR made the Great Depression worse with his policies? Check a GDP chart of the 1930's and it did, indeed, bottom in 1932-33, right when he took office, and began a steady rise with a slight recession in '36 and '37, rising again even before the war past pre depression levels. Another con myth busted.