Tuesday, September 16, 2008

Wipeout

Some quick thoughts on the past few days:
  • This space has been highly critical of Hank Paulson and Ben Bernanke. The decision to let Lehman Brothers fail doesn't make up for their past mistakes, and may have been rooted more in the need to save ammo for the commercial banks than in any newfound concern about moral hazard or the socialization of risk. But the Lehman failure helps lay the groundwork for sustainable and sane policy. Of course there will be pain along the way, as Monday showed.

  • Some good, smaller things are happening away from the main headlines. This story is an example.

  • Investigations, prosecutions, and jail time where appropriate: faster, please. This will be an important part of any market recovery, which will come only when the public believes the bad guys have been held to account. And I'm not just talking about a couple of hapless hedge fund managers, a handful of fly-by-night mortgage companies, or some corporate boards that should forfeit past compensation. Some incompetent, pliant statists have helped put this nation in extreme peril. Every day that passes without a full-scale national inquiry focusing on Greenspan and other current and former top officials is a disgrace. The Fed governors and FOMC members responsible for the policy failures that got us here should all take their turns under the hot lights. Yes, that includes Ben Bernanke (more to come on him). In 18th century France, discredited monetary officials slinked off to other countries to spend their sunset days in dank gambling halls. Here they write books, opine in the media, and collect huge paychecks on the lecture circuit and Wall Street gravy train. Since Greenspan doesn't seem to have John Law's conscience, Congress needs to hasten his discrediting. High-profile accountability can start now and defuse some public anger, or it can wait for what I believe is a coming period of major socio-economic unrest in this country.

  • The presciently bearish market pundits are having their day, and deservedly so. Nouriel Roubini is the media's new darling. Check out Barry Ritholtz's site stats. As for this relatively minor blog, Monday was one of its most visited days ever. (A check of the log also showed multiple visits from Fed and Treasury-registered IP addresses at odd hours over the weekend, which I found interesting.) Aside from the contrary-indicator implications, which Barry often notes, keep this in mind: just as the permabulls will never tell you to sell, bears can have a hard time saying "buy" -- particularly when their fame is linked inextricably to their bearishness. Obscure pundit issues dire warnings but is mostly ignored, often for years. Pundit becomes famous when his warnings come to pass. Viewers/readers/subscriptions/salary all skyrocket. Panic subsides and the market bottoms somewhere along the way. Pundit's popularity starts to level off. Market starts long, slow recovery. Pundit spends the next decade or two warning that we haven't seen the worst yet. Lather, rinse, repeat. Anyone familiar with Joe Granville knows the story.

  • As for the pundits who got it horribly wrong or are products and symbols of this era, one mark of a longer-term bottom will be the separation of them from their media platforms. That includes Goldilocks-invoking pollyannas and chair-tossing screamers. If the corporate-owned media wants to hasten a recovery, set the tone for a new period, and attract a fresh round of doe-eyed suckers for the stock market, it will do this purely out of self-interest -- no newfound concern for the financial well-being of viewers or readers needed.

  • The past eight years have constituted the fastest, most complete reversal of fortune in this nation's history. One party controlled the government for almost all of it. Obama/Biden have been handed on a silver platter one of the starkest policy debacles ever, and just weeks before an election. If they don't hammer the White House and Republicans every day for this, they deserve to lose. And if voters don't think change is needed, they deserve whatever John McCain gives them.

  • The folly of the occupation is clearer every day. The money we spent on Iraq just in the past twelve months could have payed for the Fannie and Freddie bailout.

  • A couple of big-picture realities have become obvious. First, our financial system as it's currently constituted is neither profitable nor viable without artificially low interest rates. Moreover, in an age of risk socialization, the winners are those who acquire an implicit government guarantee by becoming "too big to fail." Individually, each reality has broader implications -- together, even more so. Perma-low rates and system-saving bailouts and interventions aren't possible without a de facto dollar standard; the longer-term inflationary consequences are too serious. That's why any country that resists that standard, particularly when it does so openly and vocally and with oil profits, is a threat. When Iran or Venezuela or Russia shun the dollar in favor of other currencies and gold, they both complicate things for Bailout Nation and throw a monkey wrench into the bigger-is-better ethos that's long been an important and extremely profitable part of this nation's corporate culture, particularly on Wall Street. The geopolitical implications are obvious. And along with Haffner's perspective on the social effects of economic chaos, they're distressing:

    Everything takes place under a kind of anesthesia. Objectively dreadful deeds produce a thin, puny emotional response. Murders are committed like schoolboy pranks. Humiliation and moral decay are accepted like minor incidents. Even death under torture only produces the response 'Bad luck'...The result of this million-fold nervous breakdown is the unified nation, ready for anything, that is today the nightmare of the rest of the world.

    As Bailout Nation morphs into Ready-For-Anything Nation, watch for signposts along the way like this report. Anyone want to blame the rest of the world for watching us with a wary eye? Which presidential candidate stands the best chance of turning back this creeping madness?

58 Comments:

Anonymous Anonymous said...

Funny about ol Mr. Goldilocks -- I keep idly checking his full domain at NRO to see what he has to say and apparently the only things of interest over these last few days have been InTrade stocks and Charlie Gibson. Sad, really.

9/16/2008 8:53 AM  
Blogger Dave S. said...

"High-profile accountability" - ha, that's a good one. Definitely the hallmark of the last eight years when the adults were back in charge.

9/16/2008 8:55 AM  
Anonymous Anonymous said...

Who has caused more property and human damage in down town Manhattan and beyond: Bin Laden and his high flying buddies, or Americas best and brightest Fed & wall St high flyers?

9/16/2008 9:01 AM  
Anonymous Anonymous said...

I like what you are saying about accountability CR, but there is not one credible sense of hope that Mr. Andrea Mitchell will be hauled before Congress to testify on his past abdication of responsibility for his Randian apre moi le deluge beliefs and Delphic oracle pronouncements of his term as Head Fed. I just don't see anyone in Congress of either party that would be willing to insist upon this.

9/16/2008 9:15 AM  
Anonymous Anonymous said...

I get where you're coming from re. geopolitical implications now. The only thing is that any attempt to militarily intervene in an oil-rich country like Iran/Venezuela can be vetoed by the guys who literally own America's mortgage papers, China. A future belligerent US doesn't have the ability to start wars to maintain dollar hegemony because their reserve banker can pull the plug on them. That's one of the good consequences of owing so much debt to countries equally hungry for energy resources.

The US is very limited in foreign policy going forward and stuff which worked for it for over half a century like military might now starts to become an expensive burden. It's instructive to look at how the British empire wound down from the beginning of last century to see an outline of the challenges the US is going to face in the future.

Dick Dastardly, UK. :)

9/16/2008 10:18 AM  
Blogger grammy said...

McCain wants to form a 911 type commission to address the recent problems on Wall Street. Wow I feel better already.

9/16/2008 10:42 AM  
Anonymous Anonymous said...

He should appoint Palin to oversee it, in an endorsement of her abilities to deal with problematic situations.

9/16/2008 11:47 AM  
Anonymous Anonymous said...

The US is not limited in military adventures. We will not be limited until our military spending is curtailed resulting in equipment going out of service, military bases closed, and a smaller force. Military strength is our last and only trump card. The European governments are clearly still in our camp along with Japan and Korea...although they are increasingly feeling like they shouldn't have given Russia such a hard time. LOL. Latin America is restless. Iran still has not capitualated. Nothing like a good war to get the plebes fired up. It's almost October people!!! As far as looking at how Britain went down...God I hope not. I'm hoping for a Soviet Union type of collapse not a couple of World Wars. Yikes. China is patient. They are in no hurry. A bit more rope...a bit more rope...a bit more rope...they can almost throw it over the tree branch now.
The Democrats have completely capitulated. Barack Obama telling Bill O'Reiley what a great success the surge is!!! hahaha. And how we need a new surge for Afghanistan! hahaha. WOW!!! McCain was all for the surge...he will probably even take credit for the surge in their debates coming up. Maybe he will even thank Mr. Obama for recognizing his vicotry plan for Iraq. hahaha. WOW. I'm waiting for Obama to start sporting a McCain/Palin button. I can't imagine he'll be voting for himself. LOL

I vote for Henry Kissinger to head the commision...Oh wait...they tried that last time. A bit too obvious...even the plebes got upset at that one. LOL. There will be no accountability. Have you all been sleeping the last 8 years?

9/16/2008 1:15 PM  
Blogger J. said...

So who did you vote for in 2000 and 2004, CR?

There is more than enough blame to go around. Not just the Fed's fault.

My father, a long-time stock jock who spent most of his adult life at Bear Stearns, always said "bulls win; bears win; pigs lose."

And let's face it, a lot of us are or turn into pigs when it comes to seemingly easy/fast money -- or mortgages or credit. And you may be able to slap lipstick on a pig, but it's still a pig. And now most of us piggies (even those of us who didn't think we were being boars) are being slaughtered. People are slow to learn.

And yeah, the occupation of Iraq was and is an expensive folly. Also not something I ever voted for. But what can we do about it, besides a regime change at home?

9/16/2008 1:31 PM  
Anonymous Anonymous said...

As far as the "few good things" are concerned, last I heard the geniuses who were running Frannie are still going to get a pretty sweet going-away gift. It's just being trimmed a bit.

I'd be astonished if Greenspan (or any member of the Bush/Cheney gangster syndicate) ever comes within a light-year of the justice that they deserve. Goldhorder's remarks about a Soviet-style collapse are relevant: Like the 1980's USSR, many or most of our most prominent institutions are incapable of comprehending or coping with external reality. They aren't up to setting necessary precedents.

Er, on a marginally related note, I think I'm actually going to vote this go-round, and pull the lever for Obama. I don't expect much from the Dems, but McCain and the gang behind him is genuinely dangerous.
-- sglover

9/16/2008 1:46 PM  
Anonymous Anonymous said...

No voting for me. I'm too busy building my bunker. But that's a good point sglover. Our insulated elite (Corporate Leaders, Financial Leaders, Politicians, etc.) have so far removed themselves from reality that it doesn't even exist for them anymore. I wholeheartedly believe that Phil Gramm meant what he said about the economy being great...Hey its all just a state of mind, right? haha. They have no clue or concern about the foundation that has kept the house up all these years. It is rotten to the core...the whole damn thing could collapse today and I wouldn't be suprised one bit.

9/16/2008 2:21 PM  
Anonymous Anonymous said...

goldhorder, just curious by what you mean when you say "the whole damn thing could collapse today...",
What would that mean and what would that look like; in other words, how would we know it if it happened?

9/16/2008 4:45 PM  
Anonymous Anonymous said...

The Grand Depression (sorry its locked under facebook)

9/16/2008 5:56 PM  
Anonymous Anonymous said...

I am talking about a major stock market selloff and no recovery. Or I guess it could take the shape of hyperinflation if our central bankers throw caution to the wind. I am also talking about Asia picking up their ball and going home. I think their political leaders really don't want to do that...it will cause serious repercussions in their own countries...but at some point they have to ask themselves...why do we continue to let these deadbeats in the US export their inflation? What in God's name are we getting in return? The answer to that question used to be more and more manufacturing jobs...but the American middle class is reaching their endpoint. We will not be an engine of growth for them anymore. At some point the Asian governments must look at encouraging domestic and regional consumption to eleviate the effects of the drop in living standards in the US. This is going to happen. It is just a manner of when...that is what I am talking about. On a funnier note...McCain's economic advisor credits McCain for the Blackberry. HAHAHA ...McGore (credit to Lew Rockwell for that)...At some point Obama needs to grow a pair and start using some of this prime material.

9/16/2008 6:50 PM  
Anonymous Anonymous said...

Cramer's Gone Nuts..got to be kidding

http://www.investorsbusinessdaily.com/news/story/story.aspx?guid=%7BE271338C%2DBA9D%2D4BF9%2D92D0%2DBA5A4A94269D%7D&siteid=rss

The Worst Financial Crisis In 100 Years?

it to last in to next week.
Oil. Down down down.
Gold. who cares. if you think you need gold buy a
gun and loa
Wall Street crisis could put Fed rate cut in play- AP Big Risk:
Surging Debt Makes U.S. More Dependent on China, Russia, Gulf
States- Tech Ticker Dow Down 500: It Could Have Been Worse, but
'Crash' Risk Remains, Roubini

9/16/2008 7:40 PM  
Anonymous Anonymous said...

"This space has been highly critical of Hank Paulson and Ben Bernanke." - They deserve it, along with a few others. They are the top regulators with fudiciary responsibilities. We have/had implicit trust in our financial institutions directly because of regulations. If we don't have regulators, you might as well give everyone a gun to manage their affairs. It'll be the wild west again. A lot of folks are saying Lehman was the sacrificial lamb, and that now they can go back to bailing out.

"Some good..." - It is about time we stop rewarding this lack of leadership and corruption of our systems.

"Investigations, prosecutions, and jail time where appropriate: faster, please" - On Charlie Rose show, I think it was Josh Rosner that said we are about a year away from the Pecora hearings. I didn't know the reference and he explained it. Pecora was counsel to the Senate Banking Committee, who conducted hearings into the abuse that preceded the 1929 crash and ensuing Depression.

Now I remember who Nouriel Roubini reminds me of. Marvin, the robot, from "The Hitch Hikers Guide to the Galaxy", who said, "I think you ought to know I'm feeling very depressed."

"As for the pundits who got it horribly wrong... - Appx every 3 years since the 80's we have had a crisis. And it's the same, cheerlead, then scold. Financial transparency is a good thing. Financial media is a bad thing.

Hands down Obama will bring the team with the skills, talent, temperament, and free-thinking that is needed to solve these problems for today and tomorrow. Gotta go with:

Stiglitz: The Fall of Wall Street Is to Market Fundamentalism What the Fall of the Berlin Wall Was to Communism

9/16/2008 10:19 PM  
Anonymous Anonymous said...

This is an interesting article by James Grant from the last crash, What good is securities reform if investors are deaf to bad news in good times? Maybe soon they won't be able to hear good news in bad times.

snippet:
"Partnoy, testifying in January before the Senate Governmental Affairs Committee, said something that would have made Pecora wince: "All the facts I have described in my testimony were available to the gatekeepers [e.g., auditors, analysts, rating agencies]. I obtained this information in a matter of weeks by sitting at a computer in my office in San Diego and by picking up the telephone. The gatekeepers' failure to discover this information and to communicate it effectively to investors, is simply inexcusable." - Can you believe that was only 6 short years ago.

Many years ago when I read Harry Dent's book, he predicted the next decade would do poorly from the markets' standpoint because of demographics. All those baby-boomers annuitizing their retirements, selling their investments, and downsizing their homes. They are living on Social Security, and hopefully fixed income savings (2% IR / 5%+ inflation - good luck), and maybe a pension. Suppose you can't time your WS crises, but this seems to be a particularly bad time.

I've heard it said that the basic problem was caused by too much money chasing too few assets. The asset prices exploded, and there was little return for the risk. The answer for the financial industry was to invent products, use leverage, and create very complex products. Ideology, the lack of regulations and watchdogs, plus heavy donations and lobbyist, gave the financial industry carte blanche to hang all of us. I heard the "too much money chasing too few assets" in the mid-90's and it was interesting to hear it again. McCain may say our system is fundamentally sound, but stuff like this sure doesn't create confidence.

These events are game changers. They say the retail financial supermarket's, that seemed to grow in the 90's, are no longer a valid business model. I thought that was an interesting observation.

9/16/2008 11:07 PM  
Anonymous Anonymous said...

fubar

9/16/2008 11:45 PM  
Blogger Unknown said...

A key part of the solution will be significantly higher interest rates. Everything right now is built on free money. If they do not move up then there will be no real solution.

No gain without pain.

9/17/2008 5:57 AM  
Anonymous Anonymous said...

Anon @ 7:40:

Wow, that Ned guy is quite the enthusiastic fascist! I'll have to bookmark that blog to get a sense of how the other .001% lives.

9/17/2008 10:07 AM  
Anonymous Anonymous said...

A little birdie told me that AIG turned down a private equity offer. Now they are being bailed out by the taxpayers. What's up with that?

9/17/2008 10:11 AM  
Anonymous Anonymous said...

A little birdie told me that AIG turned down a private equity offer. Now they are being bailed out by the taxpayers. What's up with that?

9/17/2008 10:11 AM  
Anonymous Anonymous said...

Do these buyouts/bail outs happen of this wasn't an election year?

9/17/2008 11:17 AM  
Anonymous Anonymous said...

TCR,

Ron Paul predicted this ENTIRE SCENARIO over FIVE years ago.

http://www.lewrockwell.com/paul/paul128.html

He needs to be given more attention for his dogged pursuit of the truth and solid defense of the taxpayer.

9/17/2008 11:57 AM  
Anonymous Anonymous said...

Nobody likes a cassandra anon. LOL. Especially our masters.

Whatever money I have in the stock market...which thankfully isn't much...I'm getting out now. I'm talking today.

9/17/2008 1:00 PM  
Anonymous Anonymous said...

On a worrisome note...I try not to listen to politicians during an election season but with our financial market meltdown I just had to see what they would say. McCain said exactly what Obama should have said. He pretented to be angry and spoke about going after top level management of these firms...now I don't believe him of course...but that is exactly what you need to tell the plebes to get them fired up to vote for you. Obama? He sounded like GWB. Incoherent babble about nothing. I've actually noticed that Obama has lost his public speaking ability somewhere on the campaign trail. Are the Repugs secretely drugging him or has is the pressure really too great for him? How is it that he can't strike a blow to McCain during all this. He just isn't very effective. McCain sounded angry and spoke clearly. It was a good act. Obama just kind of mutters along nowadays. What in the hell is wrong with him?

9/17/2008 1:16 PM  
Anonymous Anonymous said...

One final note...anybody notice Washington Mutual stock is down to 2 bucks a share? hahaha...it'll be a penny stock before you know it!

9/17/2008 1:34 PM  
Anonymous Anonymous said...

I don't understand why Obama isn't injecting "McCain" and "Keating 5" in every other sentence. In-fucking-credible how, even after all this time, the Dems can't figure out how the game is played.
-- sglover

9/17/2008 7:46 PM  
Anonymous Anonymous said...

Very clear choice in this election. But that was the case in 2004, wasn't it?

9/17/2008 7:55 PM  
Anonymous Anonymous said...

sglover -- there's still some time to go, and I have a feeling we'll hear more in good time.

9/17/2008 7:59 PM  
Anonymous Anonymous said...

Economy in Toilet...America Is Doomed...


Dow 5000..the worst is yet to come


Remember President Bush's strong economy? Now it's strong ...
Los Angeles Times - 2 hours ago
It has been the mantra of the White House this

9/17/2008 8:36 PM  
Anonymous Anonymous said...

Disgorging…. why is nobody talking about taking back the ill gotten gains from these executives and board members?

9/17/2008 9:43 PM  
Anonymous Anonymous said...


Finance Fatcats Live Large as Firms Crumble
With Golden Parachutes and Glitzy Homes, Financial Executives of Crisis Have Few Gripes

It was interesting to hear the former CEO of AIG say they are entitled to a seat at the Fed bailout meetings.

Corporations = entitlement?

Hope the holiday season doesn't end up like "An American Christmas Carol".

9/18/2008 12:38 AM  
Anonymous Anonymous said...

hahaha...what is going on with Obama? He doesn't have a pair so Pelosi has to do it for him???? Wow! What is going on here? Why wouldn't Barack come out swinging and the have Pelosi come out and back him up...if the congress finally wants to make a stink...but why not let your presidential candidate at least look like a leader? I am stunned.
Are the democrats really this clueless? Do they have no understanding how to play this game?
http://www.msnbc.msn.com/id/26754130

9/18/2008 1:06 AM  
Anonymous Anonymous said...

Thanks for the link Goldhorder. It's interesting that the AIG bailout move was influenced by European central bankers. I guess the international bankers really do run the world, eh?

And what's this talk about bailing out US automakers? Why in Hell should that happen? Can I ignore the writing on the wall for years and then get a bunch of money when the obvious happens? Sheesh! What happened to "competition" and "innovation"? Or are those just more buzzwords to fool us wage-earners? The Japanese and Europeans seem to be able to do both of those things. So let GM hang.

9/18/2008 10:47 AM  
Anonymous Anonymous said...

haha...I mostly agree kilfarsnar. But if I was going to bail somebody out...It would be better to make it the automotive industry. At least they are producing something real and aren't killing anybody...maybe crappy stuff...but at least it is something. What do all these financial speculators produce? Other than "supplying the capital that makes the world go round" hahahahahahaha...oh my...but serioulsly. I don't think we should bail out anybody but I can at least understand why subsidizing your manufacturing base is smarter in the long run than subsidizing your financial/military sector. But this goes to the heart of what we have become. We are an empire. And as Kissinger once said..."control the food supply, control the people...control the resources, control the continent...control the money, control the world.

Our central government decided a long time ago that manufacturing is not important to a true world power so they have focused their subsidies on world finance and military power. That is the key to understanding why we are sooooo screwed up now.

I am not a supply sider myself but I always loved the late Jude Wanniski. His arrogant sounding book The Way The World Works is truly a masterpiece. The smart supply siders (Wanniski and Mundell)argued that if you are going to have centralized banking you have to treat your currency like a commodity (control supply and debt) and use political power to subsidize practical profit seeking industries. Japan, China, and Korea all subsidize their manufacturing industries. That is their biggest advantage over the US. That is why they make the things the world wants to buy and we have military power and control the IMF & World Bank. There are no "free markets" anymore. Like Jim "mad money" Cramer said...We are all communists now. Not because of the latest round of bailouts but because our political leaders believe in world government. World government with themselves as the leaders of course. The further and further they expand their power...the more hate and discontent in the world they spread. The more expensive it becomes to maintain stability. The more expensive that become is less money for wellfare back home to keep the plebes happy and docile.
Democrats associate supply side theory with Reagan and raise a stink when you discuss supply side economic theory. Don't do that though...because you have to take the politics out to understand the theory(Even Karl Marx wasn't as bad as people think. His vision of "communism" was Sweden not the totalitarian hell of Stalin and Mao). The true contribution of Mundell and Wanniski was to note the huge impact politics and central banking play on economic patterns. Keynesian economic theory focused almost solely on demand and stimulating demand. The problem with that is it is short lived. You raise the minimum wage...inflation increases and wipes it out in a year or two. You give people tax rebate checks the spending goes up a month and then it is over. You create googles of government jobs...taxes go up or debt/inflation and you are right back where you began. By subsidizing manufacturers who make useful products the people of the world enjoy...you get a real economy. More and better paying jobs for people and a peaceful way of encouraging cooperation between peoples. Like I said...I'm not a supply sider but I appreciate the beauty of the argument. The problem with the argument is that anytime you centralize power you make it easier for a small group of maniacs in government jobs to suddenly decide to play Napoleon and convert their society into a giant globe spanning killing machine...and what are you left with at that point? A declining middle class and a bunch of angry swarthy foreigners who decide flying planes into buildings is a great way to get back at you.

9/18/2008 12:10 PM  
Anonymous Anonymous said...

What about Chris Cox??

9/18/2008 1:00 PM  
Anonymous Anonymous said...

Run on WAMU Bank in Oregon
Posted by Karen DeCoster at September 18, 2008 08:32 AM

A source calls me to say that people are lined up outside a Wamu bank in Lake Oswego, Oregon this morning. A Portland news station is there, but so far, no news on the web. A TV reporter was going around asking frantic people, who are afraid of losing all their money, "What about the FDIC guarantee?"

9/18/2008 2:48 PM  
Anonymous Anonymous said...

Bail out the auto industry on the condition that they make passenger trains and wind turbines. Better yet, make GM replace the trolley lines that it vandalized 50 years ago.

Naw, all things considered -- fuck the auto industry. It's been one of the most heavily subsidized and badly managed industries around.
-- sglover

9/18/2008 3:26 PM  
Anonymous Anonymous said...

@sglover -

The importance of what's left of the US auto industry is not that they make cars. It is that they are manufacturers and have a considerable machine-tool capacity. If we allow the rest of that capacity to be shut down (and shipped to China or elsewhere) we have completed our transformation into a third world nation. Having said that, there are too many car manufacturers as it is. We should offer help to them to re-tool to build electric train systems, maglev systems, modular nuclear plants, etc. There are many infrastructure needs we have that we can apply that machine tool capacity towards. We commit national suicide by letting this capacity wither away. Having said that, the current bailout bill is bad - it doesn't direct that capacity towards what is needed, just throws money at Detroit to buy them more time.

-Unmitigated Audacity

9/18/2008 4:41 PM  
Anonymous Anonymous said...

I emailed a friend earlier today asking if she's taken her money out of WaMu and stuffed it in her mattress. This was her reply:

As a matter of fact, I'm waiting for our national office to let me know
how fast they can make my direct deposit to another bank.

9/18/2008 4:58 PM  
Anonymous Anonymous said...

There are some interesting thoughts here about the bailout of the auto industry. I can dig the argument that we need to maintain a manufacturing ability in this country. Of course, as I understand, that ability has been steadily dismantled over the past two decades in the name of cost savings (because cheaper is always better, right?). But as Mr. (Ms.?) Audacity points out, that is not what the bailout is about. So I would support it if I thought it would lead to some improvement. But from where I sit, it just looks like more corporate welfare.

9/18/2008 5:37 PM  
Anonymous Anonymous said...

looks like you spoke to soon. Having sacraficed leh on the altar of the fiscal gods. The fed is just going to buy the rest off by exchanging money for the banks toilet paper

9/18/2008 9:20 PM  
Anonymous Anonymous said...

Oh, I agree, Unmitigated Audacity. But I'm originally from Michigan, and this auto industry implosion has been brewing for thirty years. Aside from the geniuses running our financial industry, I think the Big Three might be the worst-managed companies in the country. If they get their hand-out, I'll bet you a buck that the money's going to go lawyers, exec bonuses, marketing, and then, if there's any left over, **maybe** engineering or R & D.
-- sglover

9/19/2008 12:30 AM  
Anonymous Anonymous said...

hahaha...you are all correct about that. I must concede on that point. The automotive corporate leadership would be just as corrupt as our financial, political, and military industry if they could get away with it. They are all cut from the same cloth but the winners left the manufacturing sector a long time ago...the second tier thieves run what is left of the large manufacturing sector.

On a funny note...
"Raw capitalism is dead."

--Henry Paulson

Been dead along time my dear friend Henry. You pull the knife out of the corpse it can't get any deader. lol

9/19/2008 1:39 AM  
Anonymous Anonymous said...

"Investigations, prosecutions, and jail time where appropriate"

uh no.

bullets in back of heads is much more appropriate.

9/19/2008 11:13 AM  
Anonymous Anonymous said...

«Investigations, prosecutions, and jail time where appropriate: faster, please.»

Perhaps a few high profile tokens will be thrown to the wolves, for the good of the rest of their caste, but in general in America WINNERS don't care much about the law, or they can purchase an easier law from a grateful congress.

What about all the backdated optios, or accounting fraud scandals? It was pervasive criminality and tax evasion, and only a few tokens were thrown to the wolves.

9/19/2008 11:43 AM  
Anonymous Anonymous said...

@sglover-

Funny, I am also originally from Michigan. Grew up there in the 60's and 70's, a positively idyllic time, economically speaking, compared to today. And I agree with your points re: Mngt. Any money going to these companies must come with restrictions against the abuses you cite. It must go to maintaining what's left of the current plant and equipment, AND, just as important, the skilled laborers and engineers needed to operate it. Then, with NEW management, create the business plan to build high-speed rail systems, hydrogen-based cars and other types of hard infrastructure as may be appropriate to be manufactured by their current and future capacity.

I'm with anybody, conservative, liberal, libertarian, transexual; whoever and whatever that wants to end the bailouts of the criminal elites that have sucked our country dry. The financial locusts (economic royalists is what FDR called them) must be crushed, the monetary system put thru bankruptcy protection, and real economic growth (i.e. actual production of physical goods and material wealth) restarted with the aid of smart gov't intervention.

The financial bailouts will only result in short-term propping up of stock values. Short-term as in weeks. The post-Bretton Woods system is dead; just hasn't been give a proper burial. A depression worse than the 30's is coming if we don't cut the crap now and take effective remedial action immediately.

Unmitigated Audacity

9/19/2008 3:11 PM  
Anonymous Anonymous said...

Yes, an incredible week. Should it be taken at face value?

9/19/2008 5:48 PM  
Anonymous Anonymous said...

Freudian statement of the week, on News Night on PBS, "Finance is a confidence game." -Steven Pearlstein.
He meant that people need to have confidence in the system for it to function, but I like the other meaning of that statement.

9/19/2008 7:20 PM  
Anonymous Anonymous said...

Freudian statement of the week, on News Night on PBS, "Finance is a confidence game." -Steven Pearlstein.
He meant that people need to have confidence in the system for it to function, but I like the other meaning of that statement.

9/19/2008 7:20 PM  
Anonymous Anonymous said...

Maybe the most eventful financial week in history, and no post since Tuesday?

Where is Cunning Realist, when you need him?

9/20/2008 8:03 AM  
Anonymous Anonymous said...

Who does TCR work for? He might be caught up in this mess! LOL.

Here is the voice of the elites letting us commoners know what our place is in the world!!! You plebes can go dig yourselves a whole in the ground and bury yourself for all I care. We are saving ourselves!!! LOL

"Frankly, I don't really care if my community bank is doing well," insisted Cramer. "I care about AIG and the fate of Western banks, all of which have relied on AIG at some point for a risk transfer."

Yes...I completely agree with anon. Only bullets in the backs of heads will turn things around at this point. I've got plenty of guns. If we can get about 3000 people together we can probably get something done. Pick a time and suprise a few on them. Find a time when the board of governors meet....ahhhh...sweet revolution. Excuse me...I gotta run. I think I hear a predator drone coming.

9/20/2008 11:31 AM  
Anonymous Anonymous said...

It seems, Bush and the Republican party, and all those lobbyist preventing reasonable legislation for the people, were a gift to Bin Laden and those that wanted to do harm to the US:

CNN, 2004: Bin Laden: Goal is to bankrupt U.S.

I wonder, does Bush's, "You are either with us or against us" point to the financial industry and wealthy too, who chose themselves over Country, and did harm to Country (did the axis of evil just move ;-|). Of course, that would go against McCain's, "Country First". Maybe the Bush family and those oil executives in the WH (i.e., Cheney) are really closer to the Bin Laden family than originally known. HHHmm...

What is our national deficient now? And does that include the long-term care for all those 10's of thousands hurt in Iraq, does it include everyone of those bailouts, Freddie, Fannie, AIG, Bear Stearns, and so on, and so on.

And earlier this year Bush vetoed a bipartisan bill passed by Congress that would have renewed the State Children’s Health Insurance Program. 35 billion over 5 years to cover additional 6 million children. Bush said it was too costly. But the ongoing cost of the Iraq war isn't? The cost of bailing out financial multi-millionaires who live lives of extreme excesses year after year, isn't? Is this the real "Mission Accomplished"?

9/20/2008 1:13 PM  
Anonymous Anonymous said...

Just exactly why hasn't Bush etc been shackled and frog-marched off the jail yet? Seems to me they've spent at least the last 8 years committing treason as often as I brush my teeth.

9/20/2008 6:15 PM  
Anonymous Anonymous said...

Hmm interesting some saying Obama willl lose

Experts say Obama Will lose


could be true

9/20/2008 7:25 PM  
Blogger Mr. Hedley Bowes said...

"By subsidizing manufacturers who make useful products the people of the world enjoy...you get a real economy. More and better paying jobs for people and a peaceful way of encouraging cooperation between peoples."

But but but we've been subsidizing the military industrial complex since 1947, in the name of 'peace through strength', so why the sudden collapse? Aren't Bob and Buffy Smith finding the right level of utility in their Bradley Fighting Vehicles? Is there an enjoyment gap in deployment of depleted uranium warheads? Don't you think our nearly $1 Trillion investment in a truly democratic Iraq will portend the cooperation among peoples we so fervently desire?

/SNARK

As some here may know, I second the alternate notions. Convert the entire death armaments industry to productive, forward looking renewable energy and resource generation technologies. Let's show some leadership and abandon the Project Paperclip notion of Empire, before we go the way of those prior Empires.

Even now, we're still just days away.

9/21/2008 3:21 AM  
Anonymous Anonymous said...

It yet did not get.

9/16/2010 2:11 AM  

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