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Economic Crisis: How We Got Here

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I’ve written a lot about what a bad idea the so-called Stimulus Package and the trillions of dollars of spending which will follow it are. This has led some of those who are still lulled into complacency by the siren song of “hope and change” to complain that I’m offering complaints but no solutions. Some have even issued a childish “if you’re so smart come up with a better idea” kind of challenge.

There’s no question that it’s a lot easier to identify a problem than it is to come up with a solution, but I’m perfectly willing to do both. If I’ve focused more on the flaws of the current stimulus and recovery proposals, it’s because there’s no chance for a better solution if we implement policies which make the situation so dire that it will be too late to change course or introduce some common sense. When you cut your foot on a loose nail in your deck, your priority is on stopping the flow of blood first and you hammer the nail back in later.

To figure out solutions you need to first understand the causes of the current crisis. Right now we are largely reacting in blind panic. We need to stop and look back and react rationally based on the evidence of how we got here. In our current crisis there are basically three main causes.

First, there were natural cyclic forces in the economy which caused a slowing of the sustained and robust economic growth on which our business sector and government had come to rely. This slow-down started in 2002 and was superficially countered by Bush’s tax cuts and rebates, which actually had the long-term effect of prolonging or delaying the impact of the economic slowdown and preventing a natural recovery.

Second, there was over-extension of credit in the real estate market in the form of bad loans to unqualified borrowers which was then compounded by utterly irresponsible speculative repackaging and marketing of those debts as derivatives. When the robust economic growth which had allowed lenders to get away with these practices began to slow down causing a decline in real estate values, the speculative house of cards they had created came tumbling down. Blame for this problem is easy to assign, both to government policies which encouraged the bad loans and to the lack of government oversight in setting out rules for banking standards and practices which would limit risk and mandate some level of accountability. But the problem has been decades in the making and it’s hard to single anyone out as the real culprit because everyone was at fault.

Third was excessive government spending of deficit funds either drawn from the treasury in the form of debt issued beyond the level justified by a shrinking economy or as currency which just printed with no accountability whatsoever. Excessive generation of debt was necessitated by the huge cost of the War on Terror. The practice of printing too much currency was undertaken deliberately in an effort to push down the value of the dollar.

Initially this was a way of attracting foreign investment in the United States to stimulate the economy, but ultimately it was also used as a hidden form of taxation, putting money in the coffers of government by reducing the value of money held by everyone else from common citizens to foreign nations investing in dollars and dollar based securities.

To give credit where due it was a very clever policy. It had little direct negative impact on lower income consumers while effectively taxing foreign entities and multinationals who would normally be beyond the reach of the IRS. The problem is that these economic tricks produced short-term stimulative effects, but these were offset by the long term effect of deflating the real value of American assets. In short, pretty soon everything cost more but was worth less, creating an environment in which any general economic decline would be aggravated.

So when the natural economic contraction hit an inflated and volatile credit market based on assets which had a shrinking real value caused by manipulation of the money supply and deficit spending, you had what some have called an economic “perfect storm” and everything fell apart.

In retrospect the crisis would have been easy to avert. Government regulators should have stepped in and told mortgage investment companies and banks they had to limit the amount they could borrow against mortgages — maybe to a level of 3 to 1. If they had done just that, even the inevitable foreclosures on bad mortgages would have been survivable. If they’d gone farther and dealt with the bad mortgages and irresponsible lending practices with some sensible regulation, so much the better. In addition, the Bush administration could have made the decision early on in this process — possibly requiring some prescience — that it would be better to let the 2002 recession happen and bottom out so that they could have a nice recovery and a healthy economy by 2007.

The problem is that there were political arguments against behaving sensibly. Powerful Democrats in Congress controlled the mechanisms which could regulate lenders and mortgages and their long-standing relationships with real estate interests and community housing rights special interests guaranteed that they would take no action. Similarly, the Bush administration knew that it faced reelection in 2004, which would have been the natural bottoming out point of the recession. To go into an election with an unpopular war which was going badly and an economy in recession seemed like a really bad idea politically. As I said earlier, plenty of blame to go around.

That’s how we got to the weird place where we are now, where almost every economic indicator is down despite the fact that consumer disposable income is up (even if they are saving more than spending, gas prices are at record lows adjusted for inflation, prices of other goods remain inexplicably stable and our balance of trade is better than it has been in decades. Under normal circumstances our economy ought to be in the middle of a powerful recovery, not in the middle of a bizarre death march.

The truth is that spending huge amounts of money on poorly thought out attempts to stimulate recovery as has been done in the TARP bailout and in the current stimulus plan, does more harm than good. Whatever stimulus effect there is to these programs is offset by the negative impact of trillions of dollars of deficit spending, and neither of these programs actually addresses the root problems which created our current crisis in the first place. The problems are obvious and the solutions ought to be equally clear, but just like the Bush administration, the Obama administration seems to be in a panic and under pressure to show some sort of effort, yet still unwilling to put politics aside and do what really needs to be done.

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About Dave Nalle

  • http://www.joannehuspek.wordpress.com Joanne Huspek

    Thanks, Dave, for a sensible analysis.

    People have to get off the train of thought that blames the previous administration for our problems. This goes back decades, and I think both major parties got their fingers dirty on this one.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    A levelheaded article, Dave, that’s my first impression – so much the better for keeping the politics and finger-pointing to a minimum.

    Two questions: 1) what is your basis for your claim that consumer spending has not suffered; and 2) you speak of the solution(s) being fairly obvious; could you elaborate.

    Roger:

    Sorry for misspelling your last name. Is the “e” in “Nalle” silent?

  • STM

    Lol. I was wondering how long it would be before you dropped this one, given all the discussion on this lately. It’s pretty damn fair comment though Dave – even with a nice bit of libertarian wriggle room thrown in at the end.

    We’ll see what happens with the stimulus package. Only time will tell. Unfortunately, none of us has much of that precious commodity when it comes to this rather pressing issue.

  • Clavos

    Dave,

    Roger’s question in # 2 is a fair one.

    We are told that the Christmas shopping season was much below previous ones, and we see retail firms turning in miserable results right on into this year; car sales (foreign and domestic brands) are down precipitously, boat sales ditto, electronics retailers declaring bankruptcy, etc., etc.

  • http://www.getitlisted.ca FSBO Pro

    No matter where you are the real estate market has dropped.

  • http://handyfilm.blogspot.com handyguy

    Two things:

    [1] It’s an easy, populist canard that TARP was equivalent to pouring money down a rathole. But as The Economist pointed out just before the Tarp bill passed, it would be impossible to prove the negative, to prove that the bailout worked — and therefore the bailout was doomed always to be politically unpopular, right or wrong.

    It is possible that we were indeed saved from something more catastrophic and immediate. Barney Frank put it this way: “It sucked. But without Tarp it would have sucked a lot worse.”

    And remember that Hank Paulson was a fierce free-marketer before Bernanke convinced him there was no choice but to intervene.

    Which brings me to:

    [2] Although Dave is correct in saying the situation was years in the making, with many causes and villains [thanks for finally coming around to that viewpoint – you used to say it was solely Fannie, Freddie and the Dems], the immediate cause of the market collapse/total credit freeze of the last 4 months comes down to two things:

    Allowing Lehman Brothers to fail

    And less than a week later,
    Bailing out AIG

    That’s when the markets hit a death spiral and banks stopped lending to each other.

    So simplistically saying that we should just let banks fail [Citibank?? Bank of America??] is a pretty risky solution to propose. How can you possibly be confident that the failure of another big firm wouldn’t cause another panic and downward spiral?

    You can’t.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Well, I do believe that their “nationalization” – a dirty word to some – is around the corner. Citybank first, and then BofA.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    The following is a good article, especially as regards further links to analyses of the present crisis:

    10 Ways to Survive without a Bailout.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    PS: In particular, see the references cited in point #2.

  • Dave Nalle

    1) what is your basis for your claim that consumer spending has not suffered;

    What I was referring to was consumer spending ability. While spending was up 1% last month, what I was actually talking about was disposable income, which is higher than it was last year at this time, but is being saved rather than spent. If consumers spent the fairly enormous amount of money they saved last year that they could have spent that would be more real stimulus than TARP and the current bill put together.

    and 2) you speak of the solution(s) being fairly obvious; could you elaborate.

    This is part one of a two parter.

    Sorry for misspelling your last name. Is the “e” in “Nalle” silent?

    Indeed it is.

    Dave

  • Hope and Change?

    Speaking of a rat hole….

    The United States plans to offer more than $900 million to help rebuild Gaza after Israel’s invasion and to strengthen the Western-backed Palestinian Authority, U.S. officials said on Monday. —

    What a joke of a policy by King Barrys henchmen! The real facts are that “Israel’s invasion” was due to the scumbag terrorist firing rockets at innocent civilians – main targets children and hospitals!!

    How does giving $900,000,000 to Palastinans in Gaza help the average Ameircan gain employment or safety? These are the same scumbags that want to destroy Israel and the US!!! It seems the current administration and the Palestinian Authority now have something in common!

    Based upon an average US income of $38,600 these monies could have been used to employ 12-24,000 Americans. Instead we give it to two instutions more corrupt and bloated than ours…

    Hey King Barry how many Suicide Murderers can you buy for $900 million? To the American Jews in the audience…I guess what King Barry means by “Hope and Change” is…

    I HOPE the Palestinians kill off all the Jews and CHANGE Israel into a parking lot!!!

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    “If consumers spent the fairly enormous amount of money they saved last year that they could have spent that would be more real stimulus than TARP and the current bill put together.”

    That may be so, Dave. But one certain reason why they don’t is that they’re uncertain of the times ahead. This seems to be the real problem here, which has innumerable consequences.

    Roger

  • Dave Nalle

    Although Dave is correct in saying the situation was years in the making, with many causes and villains [thanks for finally coming around to that viewpoint – you used to say it was solely Fannie, Freddie and the Dems],

    Not exactly. They were big contributors and one of the elements which could be clearly identified and could have been addressed to prevent further problems

    And less than a week later,
    Bailing out AIG

    Which has now asked for $60 billion more. They should have been allowed to go under and the money given to bail them out could have been used to underwrite their debts and finance a takeover. It’s way more efficient to do that than to try to prop up a company which continues to operate at a loss.

    So simplistically saying that we should just let banks fail [Citibank?? Bank of America??] is a pretty risky solution to propose. How can you possibly be confident that the failure of another big firm wouldn’t cause another panic and downward spiral?

    Because we have now seen that even with the bailouts the economy went into panic and downward spiral anyway. These banks do have assets and combining those assets with the bailout money and breaking up the banks and selling their assets clearly would have worked better. I don’t like the idea of forced bankruptcy, but it’s better than throwing taxpayer money into a bank which clearly cannot operate responsibly.

    Dave

  • Dave Nalle

    Quite right, Roger. You can’t underestimate the importance of consumer confidence. And it is NOT built up by the fearmongering Obama is engaging in or the clear irresponsibility of government with these bailouts. Consumers want to see people held accountable for their actions. They know they aren’t getting a bailout and they’d feel more confident if they knew that companies like AIG weren’t going to be kept alive beyond their worthiness using consumer tax dollars.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    BTW, Dave, in anticipation of your follow up, you might want to look at the references I provided in #8 & #9. The first is a PDF file, the second a book review.

    Roger

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Another opinion from WSJ today:

    ‘Nationalize’ the Banks.

  • http://handyfilm.blogspot.com handyguy

    I think Dave misinterprets AIG and other bailouts.

    The reason Paulson switched gears so suddenly was the cascading, and worldwide, negative market reaction to letting Lehman Brothers fail. And Lehman was the smallest major Wall St investment bank.

    Bailing out AIG less than a week later, saying it’s too big to fail, too interconnected with other institutions around the world, reinforced the panic mode….the genie was already out of the bottle. It was too late to reassure investors. But that doesn’t mean it wouldn’t have been even worse if AIG had failed the same week as Lehman.

    I know I get flak for pushing PBS’s Frontline, but their program “Inside the Meltdown” lays this all out with crystal clarity. And in only 55 minutes.

    Watch it. Today. Before you write another I-know-better-than-these-government-idiots piece.

    You’re assuming the bailouts have failed. But what if things would have been 10 or 100 or 1000 times worse without them?

    It’s important to remember that Hank Paulson and Ben Bernanke are Republicans and free marketers. Yet they sincerely believed massive federal intervention was the only way to prevent catastrophe. And it’s still entirely possible that they were right.

    I’m not so willing to second guess them as Dave is. Just because Paulson is lousy at PR doesn’t mean he was wrong.

  • http://www.republicofdave.com Dave Nalle

    BTW, Dave, in anticipation of your follow up, you might want to look at the references I provided in #8 & #9. The first is a PDF file, the second a book review.

    Not so far as I can tell. Are you referring to different posts or a different thread?

    ‘Nationalize’ the Banks.

    A bad idea that’s also unnecessary. The exact same result can be accomplished by letting them go under and subsidizing their obligations and takeover.

    The reason Paulson switched gears so suddenly was the cascading, and worldwide, negative market reaction to letting Lehman Brothers fail. And Lehman was the smallest major Wall St investment bank.

    Bailing out AIG less than a week later, saying it’s too big to fail, too interconnected with other institutions around the world, reinforced the panic mode….the genie was already out of the bottle. It was too late to reassure investors. But that doesn’t mean it wouldn’t have been even worse if AIG had failed the same week as Lehman.

    I’ve looked at the history of the Lehman brothers bankruptcy. Its assets were of sufficient value that no one involved ultimately took an unsustainable loss. I don’t see how it can be blamed in any but the smallest part for the subsequent market decline. More likely the decline was coming and the Lehman collapse was precipitated by weakening economic conditions.

    You’re assuming the bailouts have failed. But what if things would have been 10 or 100 or 1000 times worse without them?

    Technically most of the bailout spending hasn’t even happened yet, so that scenario is implausible.

    It’s important to remember that Hank Paulson and Ben Bernanke are Republicans and free marketers. Yet they sincerely believed massive federal intervention was the only way to prevent catastrophe. And it’s still entirely possible that they were right.

    I’m not necessarily arguing against federal intervention, I just think that the kinds of bailouts found in the TARP bill are an irresponsible way to deal with these companies. If anything I prefer an approach with more government involvement and oversight, though still short of nationalization.

    It would be less expensive to break up the failing companies, sell off their assets, use some federal money to subsidize the companies taking over their liabilities. AIG is a perfect example of why this would have been a better approach. If we had done this with AIG they would not be coming back for $60 billion more now.

    Dave

    I’m not so willing to second guess them as Dave is. Just because Paulson is lousy at PR doesn’t mean he was wrong.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    No, this one, remark #8; (point #2, once you’re inside, provides further links).

  • http://biggesttent.blogspot.com/ Silas Kain

    In watching the saga unfold in Washington since Mr. Obama took office, I am struck by how dumb we Americans have become. Dave, this economic crisis is the tip of the iceberg as this great Union of ours dissolves. On Bill Maher’s show last Friday night, Maxine Waters remarked that Americans do not know how close we are to dissolution. She didn’t use those words exactly, but the implication was made.

    That Stimulus Package got rammed down our throats. Our Senators and Congresspeople mortgaged the lives of our grandchildren without blinking an eye. How many of those 535 individuals actually read the entire package? I’d venture to say none. But in all fairness to those members of Congress, we tend to elect snapshot of ourselves.

    Dave, you are on target about the need for a rational, calm approach to solving this crisis. But there’s a problem. We’re an irrational society steeped in sound bytes and anagrams. We are a people with short attention spans. Rush Limbaugh boasts that Obama will fail and those on the left are up in arms. The reality is that Obama most probably will fail. But it won’t be his fault — it will be ours collectively. You see, Barack Obama and mainstream America share a common enemy — the members of Congress. It’s time for a Constitutional Convention.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    That might not be such a bad idea, Silas. The crisis at hand would certainly justify such a move.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Besides, it would be much more forceful than the present (rather lame) attempt on the part of the states to declare “sovereignty.”

    I’d second THAT motion.

  • http://handyfilm.blogspot.com handyguy

    I’m not just pulling this out of a hat. Ask anyone who worked on Wall St or was a journalist covering Wall St: allowing Lehman Brothers to fail [Paulson trying to assert ‘moral hazard’ in refusing to bail them out] was the catalyst.

    The Dow plunged 500 points on Sept. 15, the day Lehman announced bankruptcy. The reason is that it was so interconnected to other banks and companies: this was not just the failure of one poorly run company in isolation.

    Its $4 billion in mortgage backed securities affected a lot of other institutions in a major way. It caused two major cash/money market funds to “break the buck” [fall below $1 per share], an important psychological milestone. Freddie Mac was affected, as were banks and companies in London, Japan, Hong Kong, and Korea.

  • http://handyfilm.blogspot.com handyguy

    Dave’s preferred solution for the banks is also Tim Geithner’s [government management short of nationalization].

    Geithner’s critics say this lets the banks off too easily and only postpones the pain.

    I’m not taking sides, yet.

  • STM

    Handy’s right … it was Lehman’s collapse that sparked the whole thing. Mind you, the entire thing was a house of cards anyway.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I worked on Wall Street for ten years, Handy, STM,

    Lehman, Bear Stearns, Smith Barney, Dean Witter – I can name another dozen – they all were institutions. Inviolable. Apart from the interconnectedness you’re talking about – the very shock that something like that could happen transcends the imagination of anyone who wasn’t intimately connected with the industry.

    It was nothing short of a major earthquake.

  • STM

    Handy: “That’s when the markets hit a death spiral and banks stopped lending to each other.”

    And the banks not lending to each other is now the key issue everywhere.

    The longer that goes on, the more danger we’re in terms of full meltdown.

    I’m with handy. The bailouts may well have had a result in slowing or perhaps stopping altogether a the full death spiral that is in danger of wiping out the global economy.

    Stimulus packages, meanwhile, have already been used elswhere around the world (including here, and remember the Obama administration came a bit later to the party) and seem to have had at least a damping effect, which is good.

    Truth is, only time will tell.

    Just letting banks fail, though, in this current environment … not a good look.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Especially, STM, that they’re not doing their proper function now. Something’s got to be done about that.

  • Clavos

    Just letting banks fail, though, in this current environment … not a good look.

    Neither is taking on more indebtedness to solve a problem brought on by indebtedness…

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Bernanke staves the disaster by talking down the nationalization of banks. The Dow refuses to plunge (for now).

    market action today.

  • Baronius

    I agree with much of the original article. There were underlying problems in the credit market, so it’s tough to say exactly what triggered the crisis. But I think it wasn’t so much the Lehman collapse as Bernanke’s and Paulson’s response. Remember that they were crazily optimistic, interventionist, free-marketeers, and predictors of doom, all within a week. And the AIG failure had two additional features: first, it made it look like the credit crisis had moved beyond the banks, and second, it introduced the phrase “too big to fail”. By implication, there were going to be a lot more, smaller failures, and the market responded to that information. Also, the phrase made the giants look more precarious, not less so, because of what the government would do to prevent them from failing. The funny thing is, the Fed and Treasury managed to make every worst fear come true.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Fair.

  • http://handyfilm.blogspot.com handyguy

    Baronius, your entire #31 is speculative.

    Bernanke and Paulson [and Geithner and Obama] are not just some anonymous managers brought in to try something and see if maybe it works. They have major resumes, in academia [Bernanke], business [Paulson] and government [Geithner].

    This doesn’t make them automatically right. It does make me pause before giving them bad evaluations reflexively.

    It is possible that no one would have been able to prevent [or cause] this crisis through individual decisions or actions.

    And TARP itself was Bernanke saying, We’ve got to stop dealing with this crisis by crisis and try a more holistic approach. The clumsiness of TARP was in its public relations. I’m not convinced it was or is a bad idea.

    Obama, whose authority comes from his stellar ability to synthesize and communicate ideas [and not, as has been noted about a billion times, from his resume], may be far better able to explain what the government is doing and why. Paulson, Bernanke and Geithner are not very good at public speaking, or at inspiring people.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Handy, I’m sorry to interject, but you’re being speculative, too.

  • http://handyfilm.blogspot.com handyguy

    STM: Just letting banks fail, though, in this current environment … not a good look.

    Clavos: Neither is taking on more indebtedness to solve a problem brought on by indebtedness…

    A pretty glib assessment of a vast and complex issue.

    The size of the problem was a result of speculation [motivated by greed], not specifically indebtedness. If the problem were only about 7% of mortgages being risky, it wouldn’t be a cataclysm. Wall St took the bad mortgages and multiplied their effect by a factor of gazillions.

    By the way, Paul Krugman noted on Sunday that 14 US banks have already failed in 2009 alone. They were taken over by the FDIC because they couldn’t cover their depositors’ accounts. His point was that nationalizing [temporarily] the big banks is different only in terms of scale.

  • http://handyfilm.blogspot.com handyguy

    You may be right, Roger, but my speculations led to open-ended conclusions: I admitted I don’t know whether Tarp worked.

    Dave and Baronius don’t bother with the maybe’s and I’m-not-sure’s.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I agree, Handy. My honest opinion is – no one really knows what program will work and to what extent, and to presume otherwise is foolhardy.
    I just hope that we’ll pull out.

  • Baronius

    Handy, I did bother with an “I think”. The truth is, I’m not sure at what step Bernanke and Paulson messed up, but I don’t see how you can look back over their management of the crisis without cringing.

    I think they messed up at every step. I said it at the time, and there hasn’t been anything to make me change my mind. Take one simple moment, when the Fed set the interest rate at 0%. That’s not exactly what happened, but that’s what it looked like. That in itself sent a panic through the markets. (Note to hostage-takers: never kill your last hostage, because it means you’ve got no more bargaining power.)

    One other point which might not persuade you, but I think it’s telling. Paulson changed course a few times on the TARP, so even he didn’t think he was doing the right thing.

  • Cindy

    I’ve already taken my small savings out of the bank. FDIC shmeFDIC.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Taking the interest rate down to zero certainly didn’t sit well with the investors, to say nothing of buttressing a sense of confidence.

  • Baronius

    It also informed the banks that they weren’t supposed to lend money for profit any more.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    That was kind of self-defeating, I’d say.

  • http://handyfilm.blogspot.com handyguy

    You guys are talking nonsense. The ‘zero’ interest rate is for banks lending their reserves to each other, not for making profits on normal loans! I’m sure you must know this.

    And yes, Paulson was probably very ambivalent about TARP. As are you and as am I. But the policy and the changes actually were coming from Bernanke: he had to convince Paulson to do a bailout, and then he convinced him to change from “buying toxic assets” to just infusing capital by buying shares in the banks.

    Oh, just watch the darn PBS show already! It helped me understand the sequence of events much more clearly.

  • Baronius

    Yikes, Handy, one of us is off his game tonight. This is the third comment of mine that you’ve felt the need to correct, when I think the originals stand on their own.

    I said that the interest rate wasn’t actually set to 0%, but that’s the way it was interpreted. The market responds to signals. Also, the FRB had pretty much run out of moves by that point. So I’m departing the boards for the evening, because this is unproductive.

  • Hope and Change?

    “just watch the darn PBS show already!”

    Duhhhhh…I saw it on PBS between “Sesame Street” and “Johnny Has Two Moms”…duh…so it must be true!

    H&C says…”Question Authority”

  • http://handyfilm.blogspot.com handyguy

    Well, sweetheart, no one expects you to watch it, of course. It’s written way over your head. But that needn’t stop you from making uninformed comments about something you’ll never see.

    “Question Ignorance”

  • Clavos

    A pretty glib assessment of a vast and complex issue.

    Perhaps.

    But Obama is incontrovertibly taking US much further into debt than it ever has been before — debt that will arguably lead to hyperinflation a year or two from now — after the government discovers that the “stimulus” wasn’t, and it scrambles to meet its debt service by printing.

  • http://handyfilm.blogspot.com handyguy

    There are certainly risks to the president’s policy. And risks if we let Citibank and General Motors go under, which is the course you prefer, if I read your comments on here over the last few months accurately.

    I’m glad I don’t have to make these decisions. I am being completely honest, no spin, when I say I trust the man who is making them. Let’s hear what he has to say tonight.

  • Arch Conservative

    “Paulson, Bernanke and Geithner are not very good at public speaking, or at inspiring people.”

    Yeah and if it weren’t for teleprompters and the mainstream media King Barry wouldn’t be either.

    So his plan is to claim he inherited the largest deficit ever, add over a trillion dollars to it in his first two months in office, then claim he will be able to cut it in half in four years?

    C’mon if you believe that your way past drinking the koolaid. You have a koolaid iv jammed write into your aorta.

    The latest gallup poll shows that King Barry’s approval rating has fallen below 60%. Apparently more and more Americans every day are realizing just how full of shit he is. Those that aren’t outwardly acknowledging it are still in denial only because they’re ravaged with despair stemming from the current state of our economy and are looking for something, anything, to latch onto for respite, even a silver tongued jackass with a penchant for socialism.

  • Arch Conservative

    I’m watching Bobby Jindals response speech right now.

    I was watching it on MSNBC when it began and when Jindal walked out you could hear Chris Matthews on the mic say “oh my god.”

    I guess Matthews isn’t happy with Olbermann being the biggest joke in the industry.

    When you have Racheal Maddow calling you out on shit you know you’re a loser.

    Fuckin amateur hour at MSNBC.

  • http://biggesttent.blogspot.com/ Silas Kain

    C’mon, Arch. Give the man a modicum of respect. He’s doing his best under the worst of political conditions. If the Obama Administration succeeds, the members of Congress win but ultimately the rank and file American emerges victorious. If Obama fails, he’ll be ousted from office, the rank and file American loses and sitting GOP members of Congress win. So no matter what, the Far Right is going to win. So, Arch, if it is your desire to perpetuate the cause of the Far Right, feel free. You have nothing to lose.

  • http://handyfilm.blogspot.com handyguy

    As opposed to the slick and sophisticated coverage here on Blogcritics….

    Thank you, Archie for your, um, er, words of wisdom.

  • http://handyfilm.blogspot.com handyguy

    The Obama speech tonight was completely successful at what it was intended to do, and the last 15 minutes or so were downright phenomenal. Our GOP friends were not likely to have a great time tonight anyway, so I wouldn’t expect them to be falling over themselves to praise the president. It was all designed to be a inspirational love fest with Congressional Dems, and I imagine many viewers at home were favorably impressed as well.

    The Jindal speech was well done too, except for the weird Katrina anecdote. As David Gergen just pointed out on CNN, 175 billion dollars of federal aid was involved. We’re glad there are helpful volunteers in Louisiana, but the parallel to the economic crisis isn’t entirely clear.

  • Maurice

    Dave – this is not your best work. I want to summarize your 3 points:

    1) natural cyclic forces in the economy which caused a slowing of the sustained and robust economic…

    Nothing natural about the market decline after 9/11. Or the expense of the war.

    2) Second, there was over-extension of credit in the real estate market

    Which I would argue spilled over into all areas of credit and is the main culprit.

    3) Third was excessive government spending of deficit funds…

    I have a hard time believing this was a major contributor to the money meltdown.

    The main problem we have right now is lack of confidence. People are not buying things because they have no confidence in our economy. Hell, they have no confidence they will have a job tomorrow. Here once again are my three solutions for restoring confidence in our currency and economy:

    1) Borrowers must participate in the loan. In other words you must put money down. This ensures the borrower is more likely to consider his own ability to repay.

    2) Our state and federal governments have been unfriendly to manufacturing. We must attract manufacturing jobs for 2 reasons. Number one not everyone is cut out to go to college. Number two we need to build our own stuff so we are not beholden to other nations.

    3) We must fix our SEC laws. Right now the stock market is built on speculation and emotion. This is wrong. When you buy stock it should be because you believe in the company and you want it to succeed. Profiting at the demise of a company is harmful to our business base.

  • http://drdreadful.blogspot.com Dr Dreadful

    I may be way off beam here – just an ever so slight vibe I’m picking up – but I’m getting the impression Archie wasn’t altogether happy with Mr Obama’s speech tonight.

  • http://drdreadful.blogspot.com Dr Dreadful

    One bit did make me chuckle – when he talked about America as the country where the automobile was invented.

    The descendants of a certain Herr Benz might have something to say about that…

  • Hope and Change?

    The Obama speech tonight was completely disaster and accomplished nothing. The last 15 minutes or so were downright pathetic. Our DEM friends are so out of touch Barry could have farted and they would have fallen over themselves to praise his stench. It was all designed to for him to read his lines like Queen Nancy Pelosi told him to. The Congressional Dems being so out of touch with Americans loved it, and I am sure many viewers at home either fell asleep or were shit their pants.

    The Jindal speech was well done too, especially for the poignant Katrina anecdote. As he pointed out that we must abandon the entitlement mentality and be responsible for our own future. Anyone who has trouble seeing the parallel to the economic crisis is either stupid or lying.

    So tonight King Barry did a his usual entertaining tap dance while reading the teleprompter but tomorrow we will go to work, the stock markets will sinl lower, our home values will decrease…because the policies and programs that the dems voted for have nothing to do with the words in his speech. The US economy will grow from Government investment in health care, energy and education? The problem is the only jobs that the bailout bill will create will be low paying home health care aides, gas station attendants, school aides and bullshit nonproductive jobs for federal and state employees.

    So much for hope and change….

    PS Can someone tell Barry that he won the election. Its time to stop taking and start doing!

  • Hope and Change?

    Mauruce..

    “Right now the stock market is built on speculation and emotion. This is wrong. When you buy stock it should be because you believe in the company and you want it to succeed.”

    Um…er….because you believe in the company and you want it to succeed….is….um….ypu know….SPECULATION AND EMOTION!

  • Clavos

    H&C^

    Your opinion is full of shit.

  • http://www.maskedmoviesnobs.com El Bicho

    Psst, Gonzo. That’s your cue.

  • Clavos

    Just can’t stick to it, huh?

  • http://drdreadful.blogspot.com Dr Dreadful

    What’d I miss?

  • pablo

    No mention of credit default swaps/derivatives Nalle? hehehehe, you go boy.

  • http://biggesttent.blogspot.com/ Silas Kain

    If Bobby Jindall is the new face of the Republican Party Democrats have nothing to worry about. He’s as much a buffoon as the last GOP White House resident. Moderate Republicans unite — it’s time to send the Ultra Right back to the wilderness.

  • STM

    Doc: “The descendants of a certain Herr Benz might have something to say about that…”

    Didn’t your other mob – the Frogs – invent that??

  • STM

    Dave: “2) Second, there was over-extension of credit in the real estate market”.

    Yes, that one is a bit of an under-assessment.

    I suppose you could loosely describe it as that, but it wouldn’t be the whole truth.

    What is really was: Wall St packaging tranches of debt into derivatives (CDOs) and selling that to investors, which as handy points out, then became losses to investors who bought the pea-and-thimble trick that can now be counted in the squllions. Actually it was worth in the trillions, but you get my drift.

    The result: Stage 1 in the Global Financial Meltdown, and the beginning of the end.

    Not really just an over-extension of credit in the real estate market.

    That was just the vehicle.

    Oh, and as Pablo points out, the whole thing was made markedly worse by those other little saleable investment packages dreamt up by lunatics on Wall Street … the Credit Default Swap, which ultimately became the most traded form of credit derivative in the world.

    The suits on Wall St should carry all the blame for this crisis. They are the REAL culprits, because they created an ever-expanding market for mortgage brokers and sellers so they could sell these Collateralised Debt Obligations to investors, and encouraged them to bring as many borrowers to the table as possible, which of course resulted in a lowering of what until then had been pretty standard borrowing criteria.

    Forget the American dream – they’ve created the American nightmare.

    No matter how they might try to talk down their own roles in this, they did it for no other reason than to earn millions for themselves.

    Don’t tell me the folks at the top didn’t understand the high risk involved. They didn’t care as lonmg as they were lining their own pockets.

    This crisis originated on Wall St – period. Why can’t people get their heads around this one simple truth??

    All the talking about other factors is a total nonsense. Global markets have always had blips and ups and downs caused by other factors and have weathered those storms. This is the Katrina-sized version and its epicentre is New York, not Washington.

    The conditions we all face today and which have wiped gazillions off global markets are purely the result of Wall St’s insanity.

    Yes, and its greed.

    And you thought junk bonds were bad?

  • http://ruvysroost.blogspot.com Ruvy

    Don’t take this personally, Dave. It’s good to see that you’ve finally come round to seeing the world in a slightly more realistic light. But Stan Denham has a more balanced view of the whole thing. And he has been pushing that view for a while….

    The crisis has been the bastard child of Wall Street bankers and financial manipulators, as have most financial crises in America for the last century or so.

    Of course, folks like Paul and I, along with some of the writers here, like CR Sridhar, have seen the shit heading towards your fan for quite some time. Maybe reading the works of someone like George Engdahl would give you better vision in these things, Dave.

    Now that is has finally splattered all over you, and you recognize it for the shit it really is, instead of brown colored flavor modules you’ve been calling it up until now, I’ll be glad to sell you a towel so you can wipe yourself clean. It costs only 25 shekels. Cash up front – in Israeli money, please….

    Of course, “Uncle Jay” Kamen, a Brooklyn boy like me, explains these things in a lot more entertaining way. The link in the previous sentence is from 22 September last, and explains how sound the American economy really is. This link is from Monday last, 23 February. If you watch closely, you’ll see that even Uncle Jay is having a harder and harder time laughing his way out of the shit that the fine upstanding business leaders of the American “free market system” – and their pet poodles they call politicians – have all dug you into….

    The poor guy is recycling his jokes – and he’s not that old, either. In fact, he is two years younger than I am! But the bitter truth is so damned bitter that no amount of sugar is going to hide it.

    Have fun boys and girls! And remember – a good kid is good news!

  • Arch Conservative

    “I may be way off beam here – just an ever so slight vibe I’m picking up – but I’m getting the impression Archie wasn’t altogether happy with Mr Obama’s speech tonight.”

    Hey he gives a good speech but beyond that I don’t see anything at all in the man that shows that he isn’t just trying to use his office as power grab for the federal government.

    By the way..handy said Jindal’s speech was good….

    I don’t know what he was watching but watching Jindal speak made me cringe. The GOP would have been better off if Sarah Palin had come out in a bra and thong and sang Don’t Cha by the pussycat Dolls while Kanye West spanked her ass with an oversized paddle with a smiling King Barry’s face on it.

    If the GOP wants to win in 2012 after King Barry’s leadership ravages the economy and our personal freedoms than they better look to the bullpen because Jindal, Huckabee, Romney, Sanford, etc…. aren’t going to be able to pull it off.

    What I’d like to see is a dual candidacy where Ron Paul would run the economy and author Mark Steyn takes care of foreign policy as those are the only two prominent individuals that seem to get it on those respective concerns.

  • Doug Hunter

    A portion of the crisis is confidence and having a great speechmaker like Obama is certainly a positive.

  • http://ruvysroost.blogspot.com Ruvy

    What I’d like to see is a dual candidacy where Ron Paul would run the economy and author Mark Steyn takes care of foreign policy as those are the only two prominent individuals that seem to get it on those respective concerns.

    I may be wrong on this, but I believe that Mark Steyn is a Canadian citizen. But, no matter! Mr. Obama has already established the precedent of foreign citizens running the country from the Executive Manse, so it is not a problem at all….

    Nobody is interested in what Uncle Jay has to say?

    Sob! Sniff!

    My feelings are hurt!

  • Hope and Change?

    Well well…this mornings newspaper was a shock!! Two AP writers – Calvin Woodward and Jim Kuhnhenn actual analyzed what King Barry said last night compared to what is actual in his plan…amazing results…

    1. King Barry says–
    “We have launched a housing plan that will help responsible families…”

    AP says – “If the administrtation has come up with such a plan to “help responsible families” it hasnt announced it and it isnt in any of the proposed programs.”

    2. King Barry says,
    “We have already identifed $2 trillion in savings…”

    AP Says – “10 year projections in government are common but dont mean much”

    3. King Barry says.

    “In this budget we will end education programs that dont work and end direct payments to large agribusinees that dont need them….”

    AP says – “This budget doesnt do any of that it only suggest them”

    4.King Barry says

    “Over the nest 2 years this plan will create or save 3.5 million jobs.”

    AP says – “The ecnomist that Obama relied on for these figures report that they are with great uncertainty”

    Well…wellll…a pretty speach…a nice suit…too many lies and half truths…so I guess this is what he means by hope and change…go figure our president just an empty suit…

    PS King Barry stated last night the the “US invented the automobile…” correction we…um…er…you know…. WE DIDN’T…Germany did…

  • Cindy

    Ruvy,

    Uncle Jay – lol!

    You might like Dan(Miller)’s video on the subprime crisis.

    Careful, it nearly killed me.

  • Cindy

    And the thing about that video. As funny as it is…it’s true.

  • Maurice

    Hope and Change #58

    I know. I even thought the same thing when I typed it. The distinction is our current SEC laws have turned stock trading into pure emotion. It is one thing to buy a stock because you believe in the product and management. It is another thing to buy that stock because you ‘heard a rumor’.

    Selling short should be illegal. Nobody should cheer and profit at the demise of industry.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    That video was first-class. Everyone should see it.

  • Hope and Change?

    Oh noooooooo…..Check out the stock market this morning……..The more King Barry talks and tne more programs he gives to Joey “Hair Plugs” Biden to run….the worse the market and consumer confidence gets…BARRY SHUT YOUR MOUTH AND DO WHAT YOU DO BEST….. ABSOLUTLELY……

    um…er…you know……..NOTHING!!!!

    “Barry, I knew Ronald Reagan….and Barry you are no Ronald Reagan” H&C

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    160 points down. Another 190 and the 7000 barrier is gone. And then – watch out!

  • http://www.republicofdave.com Dave Nalle

    No mention of credit default swaps/derivatives Nalle? hehehehe, you go boy.

    Still illiterate I see, Pablo. Hell, they’re even mentioned on the first page. One would think you could at least read that far.

    Dave

  • Hope and Change?

    No Hope and Spare Change……this is what the Liberal loons have prayed for …. the end of Capitalism.

    Heres a new joke….

    How many chimps did it take to ruin the greatest country in the world?

    65.5 million — all of the idiots and morons who voted for Barry….

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Not me, H&C. I lived in a socialistic country, and I certainly don’t wish it on anyone.

  • STM

    Oh come on Roger, you aren’t comparing communist or early post-communist Poland to America under the Obama administration, for God’s sake?

    You know as well as I do that what Obama is doing can’t really be described as socialism, especially given that America’s politics even under the Democrats are only slightly to the left of Attila the Hun compared to anywhere else in the developed world.

    A step towards social democracy, maybe, but socialism? Let’s get f.cking serious here.

    Just because H&C? is in grave danger of burning out his solitary remaining brain cell doesn’t mean we have to jump on the bandwagon.

  • Hope and Change?

    Just because STM will soom realize that he has been worshipping the most inept president the free world has ever seen…doesn’t mean we have to stop telling him every five minutes how stupid the 65.5 million people/chimps who voted for him are looking every time he opens his mouth…

    PS A sign of a good leader/manager is reflected in the people on his team….Joe Biden cannot even manage a cup of coffee let alone any aspect of the Porkuls Spending Bill…..

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Of course, not, STM. And no, that’s not where we’re going – I certainly should hope so.

    Still, there are plenty of people around, here or elsewhere, who labor under the illusion that capitalism is all evil and socialism a kind of panacea. So I was addressing, I hope you understand, that particular misconception.

  • Hope and Change?

    Oh noooooo…Democrats begin to distance themselves from King Barry…

    Sen. Robert Byrd (D-W.Va.), the longest serving Democratic senator, is criticizing President Obama’s appointment of White House “czars” to oversee federal policy, saying these executive positions amount to a power grab by the executive branch

  • http://drdreadful.blogspot.com Dr Dreadful

    Ooh look, the Dow’s back up again. Never mind.

  • Cindy

    …America’s politics even under the Democrats are only slightly to the left of Attila the Hun compared to anywhere else in the developed world.

    Perfect!

  • Hope and Change?

    143 point drop…is up??? Oh now I get it the Democrats are living in Bazzaro World..when up is down and down is up…

    In Democrat Bazzaro World they do the exact opposite of what is really needed to turn things around…

    Why am I the only one who is pissed off that while the econmy tanks, taxes go up..lazy and unethical government workers steal from tax payers by blogging all day at their do nothing jobs…

    Doesnt this piss you off Doc???

  • http://drdreadful.blogspot.com Dr Dreadful

    As of right now it’s down 126 points, and climbing.

    It’s not unusual for business to be slow at the start of the day.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Doc, whatever happens today, 7000 is a magic number – especially given the sinking dollar.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    One solution to California’s budgetary problems:

    legalizing pot.

  • http://drdreadful.blogspot.com Dr Dreadful

    Roger, I’m just amused that for some people:

    a) the Dow Jones is apparently a reliable gauge of presidential performance, considering Wall Street played a huge part in getting us into this mess;
    b) Robert Byrd is all of a sudden a paragon of righteousness.

  • Cindy

    H&C,

    Try to be civil. After all, we don’t come to McDonalds and yell at you when you’re working.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Leave me out of the second one, Doc. As to the first, yes, because it’s going to have a global effect – further eroding confidence and a possible preamble to a free fall.

    But no – none of my remarks suggest any connection with presidential performance. I hope you can read me better than that.

  • Hope and Change?

    Civil from you…LOL lOL

    Hey Cindy heres some more Hope and Change…

    Reuters…

    Abuse of prisoners at Guantanamo Bay has worsened sharply since President Barack Obama took office

    Now thats hope and change that I like!!!

    Can 65.5 million CHIMPS— be that stupid?

  • http://drdreadful.blogspot.com Dr Dreadful

    I wasn’t referring to your remarks, Roger. I do know you and one other better than that!

  • Cindy

    I’m aware of that H&C.

    That’s the kind of change you like? [Personal attack deleted by Comments Editor]

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I know you do. Indirection is a viable method, and I resort to it, too.

  • http://drdreadful.blogspot.com Dr Dreadful

    Gotta love that selective quoting.

    Here’s the FULL story, with emphasis added by the Doc:

    “Abuse of prisoners at Guantanamo Bay has worsened sharply since President Barack Obama took office as prison guards “get their kicks in” before the camp is closed, according to a lawyer who represents detainees.”

  • Hope and Change?

    So Cin….how come you arent calling Barry a Nazi or even better…calling him another Idi Amin Dada?

    You constantly crow about Bush’s so called abuses…why does King Barry get a pass????

    Hmmmm…

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Very interesting. Read the whole article. They’re doing “their best” because they know the time is running out.

    Dan (Miller) should be alerted to this, if only to hear his comments.

  • M ark

    Proud to be an American.

  • M ark

    btw — Obama is Hitler.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Who the fuck pays these bastards their salaries? They’d be the first on my unemployment list if I had by druthers. Would save the government a lot of dough, too, to get rid of scum like that.

  • Cindy

    H&C,

    I just asked my day trader pals if the market is down on the Obama speech. Here is what they believe (these opinions seems to serve for the average sentiment):

    Market isn’t down on Obama speech…

    traduersky: hey when i get credit pulled with my good credit after the company gets money from the taxpayer that pizzes me off. If they keep this corporate love and welfare too much longer people going to take them down with force.

    traduersky: anarchy anarchy

    vestin: revolution

    leaper: just quit paying your taxes. Let washington grind to a halt

    traduersky: down cause again all talk not plan…no hard core detail plan of what will happen so nobody can plan so they sit

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    It’s not “people’s money” that’s moving the market – not even individual investors. It’s institutional money – and they no longer have confidence in the system.

  • http://drdreadful.blogspot.com Dr Dreadful

    The important thing to bear in mind about that report is that it concerns allegations of prisoner abuse raised by the men’s lawyer.

    Not to say that they aren’t true, but for H&C to bring up the subject is a bit rich. He’d have been the first to dismiss the lawyer’s accusations if it had happened on Bush’s watch.

  • Hope and Change?

    [Personal attack deleted by Comments Editor]

    Day Trader “friends”…my…my…I havenet heard anyone use that term….in…maybe 8 or nine years…

  • http://drdreadful.blogspot.com Dr Dreadful

    Mark:

    Breaking the silence, I see. Somebody’s got to get the ball rolling!

  • Hope and Change?

    “time is running out’ hmmm didnt Barry win the election…dont the Gitmo employees report to him…isnt he responsible …Roger?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    That’s why some of the arguments here are not even worth considering as people bring up “facts” to support their pet conclusions.

    I don’t understand, however, the earlier identification of Obama with Hitler. At first, I thought the writer was being sarcastic. Now I wonder.

  • http://drdreadful.blogspot.com Dr Dreadful

    Roger, I think Mark is alluding to some of the discussion on Al Barger’s article.

  • M a rk

    Careful, Dreadful. All this talking about the market here on BC has driven it back down to -148 points.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Yes – I suppose he is, H&C. I view it as a blind spot, or simply not being aware of everything that’s happening in this great nation of ours. And if he doesn’t do anything about it, if the reports are true, he’ll disappoint a great many of his supporters.

  • Cindy

    Roger,

    Right. These people are the ones the institutional investors manipulate.

  • Cindy

    So, their sentiment is what offers possibility for taking advantage.

    The day traders are confused. The big players will take advantage of them.

    It has little to do with Obama’s speech imo.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    As regards “day trader,” it’s still a term quite in use in the commodity markets. “Scalpers” are even more amenable to risk taking – waiting only for a percentile move in their favor before they move out.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Of course there’s no connection. Sometimes technical aspects alone (like volume) will determine the market movement on any given day.

  • Hope and Change?

    Roger…it is obvious the only day traders Cindy knows are the 11 years olds in her newark project that trade bakugans after school…..

    If the markets were up she would be CROWING how smart barry is..well its obvious HE AINT!

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I don’t thinks so, H&C. She’s not that hot on Obama.

  • Cindy

    Scalpers are day traders, in the common parlance. But small investors are targets just like day traders/scalpers.

    Big fish eat little fish.

  • Cindy

    I don’t play the market H&C. And I’m not fond of Obama.

  • Baronius

    The stock market has gone down every day since last September. Blaming the latest drop on Obama’s latest speech is silly.

    H&C, you know what kills me about you? Five percent of what you say is true, and the rest is instigation. You could raise some valid points if you wanted to, but you don’t. 100% of the responses to you are blithering. I’m guessing that’s why you keep posting.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    It’s been like that for years, especially since continuous/around the clock/trading had become commonplace – Shanghai, Tokyo, London. There’s only a twenty minutes gap, if that long, when all the major markets are closed. Consequently, the movement of money is nonstop and global.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Correction: should have said “Hong Kong”

  • http://ruvysroost.blogspot.com Ruvy

    There is a song that we used to sig at the therapy sessions we took our oldest son to when he was having trouble learning to walk – it had to do with a sheet going up and down – a “parachute” – and the toddlers in the therapy session would get under the sheet.

    Anyway, the market is like that sheet; it goes up and it goes down. At 11:30 EST when I checked it, it was at 7,219. At 12:10 EST when I checked it again, it was at 7,227. If I wasn’t having so damned much trouble getting the computer to reload, I’d check it again.

    The market does bear watching. It may drop like a stone at the end of the trading day, like it did during the Great Depression – and it may not, sort of stabilizing at around 7,200.

  • Hope and Change?

    Baronius…Thanks for your kind words!

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I think it’s flirting right now with the 7000 barrier. It’s a psychological landmark.

  • Cindy

    I was wiped out when Nasdaq 5K dot.com bubble burst. I entered a market where a bull could hardly lose. I had no experience with bubbles.

    The best trader I ever saw was shorting everything in sight on any big upward move and adding to his short positions of the biggest dot.coms for the 2 years I traded.

    he probably owns his own country now.

  • Hope and Change?

    psssst..heres a stock tip…Buy low and sell high!

  • M a rk

    …pssst…here’s a stock tip…every dime you make is expropriated surplus value created by some schmuck worker

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Commodities are most lucrative, potentially, if you’ve got the stomach. A $1,250 contract could get you 100,000 Deutsche Marks. That’s 20:1 leverage.

  • Cindy

    Yup Mark.

  • Cindy

    Here is a stock tip: Stop buying them.

    You’ll only have to work for WalMart at 93 anyway.

    Try rebelling instead.

  • Cindy

    A recent AIG commercial showed a bunch of depressed rich people looking forlornly out of their floor to ceiling windows that overlooked the NYC skyline.

    I almost lost my dinner cried.

  • http://drdreadful.blogspot.com Dr Dreadful

    Mark @ #112:

    I just noticed I left the cap off my pen. That should be good for another 50-point drop, don’t you think?

    Dammit.

  • Ma rk

    Not to worry. My cat just crapped in her litter box and the market’s coming back up.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Now I know the author representing himself under a different handle: “surplus value” gave him/her away.

  • http://drdreadful.blogspot.com Dr Dreadful

    My cat’s more effective than your cat, Mark. He brings a lot more than the market back up.

  • Cindy

    Roger,

    Who is it Marx?

    :-)

  • Cindy

    A tip for Dr.D: Always buy cat food that matches the carpet.

  • Ma rk

    (quiet Rog…I’m hiding from the thought police.

    …think it will work?)

  • http://drdreadful.blogspot.com Dr Dreadful

    A better tip for Cindy: don’t have carpet.

  • Cindy

    H&C,

    I am sick with researching my article on U.S. torture prisons.

    I’ll have plenty to say about Obama.

  • Cindy

    The Road to Guantanamo is a film I watched last night. It’s available on Bit Torrent. I recommend it.

  • Cindy

    Oh, but H&C, it’s not just Obama, it’s everyone. Every single American citizen who accepts the continuation of the state secrets protection Obama left in place is guilty of conspiracy imo.

  • Cindy

    con·spir·a·cy (kn-spîr-s)
    n. pl. con·spir·a·cies
    1. An agreement to perform together an illegal, wrongful, or subversive act.
    2. A group of conspirators.
    3. Law An agreement between two or more persons to commit a crime or accomplish a legal purpose through illegal action.

  • Mar k

    Obama is Hitler.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Well, I’ve been called one, too. But as they say, if the shoe fits, wear it.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    BTW, #145 casts a fairly wide net. Is it an invitation to a mass revolt?

  • Cindy

    Well, how can anyone think the German people were all that unusual in their ability to easily follow their monstrous leader?

    What’s so different about them?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    What he should do is be consistent and dismantle “The War on Terror.” Then everything would fall into place.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Complicity is a trade of humankind.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    trait

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Like “killing me softly with kindness”

  • Cindy

    Roger,

    It’s an invitation to understand what complicit means.

    (but I have to go now, so if you need a response…it’ll be later)

  • Cindy

    Complicity is a trait of the brainwashed.

  • Mark

    I haven’t heard Obama utter word one about giving up executive privileges and powers grabbed in the name of this ‘war’. The whole ‘THE US DOESN”T TORTURE’ shtick is just that, imo.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    The only thing he did was disengage, supposedly, from “The War on Terror” terminology. So initially, at least, I was hopeful it would go beyond words. If there is no follow through, then obviously it’s nothing but PR.

  • Ma rk

    Now if some fool were to seditiously suggest a tax strike, how exactly would that work?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Nalle should be an expert on that.

  • Baronius

    Cindy, you’re quick to attack H&C (and most of the time he deserves it), but what does this thread have to do with Obama’s interrogation policy?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    H&C brought it up in #94.

  • Baronius

    H&C brought up something unrelated to the original article 50 comments ago – and that’s the grounds for a digression?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    That’s how it goes here. There was a follow up by Doc, and other comments, and the rest is history.

  • http://ruvysroost.blogspot.com Ruvy

    Well, back to the market. With 47 minutes or so left to trade the NYSE is at 7,339.39 – 11 points below the opening. The folks at AOL (where I got this number) keep the numbers updated, but have not really updated the title of the article – “stocks fall after Obama’s speech”.

    They’re slow on the uptake, but not on the intake….

  • http://ruvysroost.blogspot.com Ruvy

    Unless the market either does a jig or goes into free-fall, the appropriate headline for the day would be “No change – but no hope either.”

  • Hope and Change?

    Obama Administration Declares His Reading From the Teleprompter Last Night a VICTORY….

    King Barry stated today that today’s market reaction to last nights speech shows that his plan is working…

    All went well at the press conference with the press corp (NYT, CNN, NBC, etc) giving the president high fives on his success. Then out of nowhere a reporter from the Pennysaver Magazine asked…

    “Um…er…Mr. President. The market didn’t rally today…it um…er….. closed down over 80 points…the lowest in over 10 years.”

    King Barry flashed a smile and said ” You don’t understand….if I didn’t read the teleprompter last night and fill America with all these new visions of the future it would have gone down over 1,000 points. My economic advisors tell me that in ten years it could have gone down over 1,000,000 points…but because of our plan it won’t be that bad…”

    The press corp immediately jumped in on the action and proceeded to beat up the Pennysaver reporter.

  • STM

    Ruve: “No change – but no hope either.”

    There’s a job here for you Ruvy.

  • http://drdreadful.blogspot.com Dr Dreadful

    This forecaster reckons the Dow will bottom out at around 6600 (though possibly as low as 5700) before things start back on the uptick, so a drop of 80 points on the day is nothing.

  • STM

    H&C: “Just because STM will soom realize that he has been worshipping the most inept president the free world has ever seen”.

    Lol. Don’t like blackfellas, much, eh? Even worse when they’re commie, homo-lovin’ “liberals”, right?

    He’s only been in the job five weeks, so I’ll do what most normal people would do – wait a year or and see. And he’s not my president, so there’s no worship.

    BTW, H&C, who’s minding the trailer while you’re on here?

  • Hope and Change?

    STM…very good! You are using the left-wing, minority victim play book exceptional well!!

    When tou arent smart enough to defend your position and all else fails scream racism!!

    Gee…how original. Its great to see that we are in a post racial society!

    LOL….

  • Cindy

    Baronius,

    Cindy, you’re quick to attack H&C (and most of the time he deserves it),…

    Not if you’re paying attention. I only offer him his due under certain circumstances.

    …but what does this thread have to do with Obama’s interrogation policy?

    H&C brought up something unrelated to the original article 50 comments ago – and that’s the grounds for a digression?

    I didn’t know I needed a court order to answer a question I missed. Or, for that matter, to digress about anything. Or, even to make new shit up to talk about.

    So, what is your problem?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Let it go.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I mean, there’s too much of chopping heads as it is

  • Clavos

    Cindy,

    I like your ‘tude.

    I don’t often agree with you, but I always admire that about you.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Her spunk, you mean. So do I. But I’d save it for a big fight.

  • http://drdreadful.blogspot.com Dr Dreadful

    Cindy saves her best one-liners for H&C.

    Pearls before swine, of course, but at least the rest of us enjoy and appreciate them!

  • Cindy

    Clav,

    Despite our differences, I have never failed to appreciate your (and even Dave’s and Dan(Miller)’s) non-authoritarianess (that should be a word).

    :-)

    P.S. Roger, if someone wants to boss me around, then they need to justify themselves. That is how I see it.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I agree. I’m only talking about allocating energy. It is limited so why not use it wisely.

  • Cindy

    One more thing Roger,

    I think you impart way more emotion than is intended or actually exists to things I say. I have realized that I’m not the only one though. So, that makes it okay.

    I really am not an angry, seething person whose emotions cloud her thinking. Sometimes I have to actually think for awhile about what would make the best insult.

  • Cindy

    And most of the time I am laughing when I post one.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I do, too. Believe me, plenty of my comments are “moves.” Still, it is an expenditure, however you look at it. So I’d rather be judicious how I apportion my life force. Not everyone – and no reflection on Baronius here at all – is equally worth it. Consequently, I try to act accordingly.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    And that’s even if – and it’s a big if (for many) if you love ‘em all – which, believe me, I try!

  • Cindy

    Good idea. Now try not to impose what you think on other people (who may have their own ideas) and we will be all good.

    (besides I try these things out on my family to rule out the least amusing, and they’re telling me they would miss the chance at being test subjects)

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    No, I try not to – only to lead them to the well. Of course, sometimes I get carried away. Stupid me!

  • Cindy

    I would never think you stupid. My friend John, though, did point out that Hobbes (and everyone then) did think the world was only 6000 years old.

    (sorry, I couldn’t resist :-)

  • Cindy

    He also said, if you want to go back 2500 years, why not go back 50,000.

  • Cindy

    Ouch, I hope I’m not in trouble.

  • Baronius

    “So, what is your problem?”

    My main problem is not enough caffeine. A secondary problem is that the threads have been wandering something fierce lately, and I think it’s fair to call people on it.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I wasn’t justifying Hobbes – only his metaphysical system. Besides, there are many people today who happen to believe so, no not me, but many even on this thread. But you don’t want me to name them.
    Which doesn’t make them stupid.

  • Cindy

    I will guess I am in trouble. In that case it can’t hurt to mention the part about “the noble savage” being to Rousseau what evolution is to Darwin.

  • Cindy

    You can infer what that means regarding conversations where I have been “at a loss” for education or understanding.

  • http://handyfilm.blogspot.com handyguy

    Cindy, I for one look forward to your article on ‘torture prisons.’

    I think you’re a bit quick to assume the worst about Obama’s detention policies — he does seem to be moving things in the right direction….just cautiously and not as fast as you would prefer.

    I do agree that this does not mean he gets a free pass from those of us for whom this is one of the most important issues in the world. [I’ve been yelling about it on here for a couple of years now.]

    But it is an area where he has to watch his right flank carefully, because so many people [falsely] accuse him of going too easy on terrorism.

    I mean, his attorney general has already visited Guantanamo and established a group to expedite and vet decisions about the detainees.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Again, I’m less interested in scientific theories, which come and go, than in ideas. As I mentioned to Irene on the “monkey thread,” Darwin’s theory is of little relevance to the subject matter under discussion – to which she decided to take a great offense and become incommunicado.

    “The sun (still) raises in the East,” however true it may be that the earth revolves around the sun (and not vice versa).

  • Cindy

    Besides, I don’t typically call people stupid. On occasion, as an insult, maybe. But I think people are generally smart (but indoctrinated).

    Thus, it is not human nature to me that people are complicit. If it were then it does not explain those who are not complicit and those who (often throwing off their preconceptions) choose to become non-complicit.

    There is a guideline I use when I think about what is human nature. And it is not what I see everyday outside my window. But what is explainable according to what humans actually do and have done historically (and in many cultural contexts).

    If human nature were to be complicit, that does not explain why some aren’t or why some (seemingly regaining their conscience) become whistle blowers.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Politics is boring compared to philosophy.

  • Cindy

    handy,

    When I am not all out agreeing with Mark in his #157, I am busy trying to figure out if I am just paranoid in what I mostly think. Which is that it seems more like a sleight of hand for his followers. I’m not done though yet, with looking and it’s not as if all I need will be at my disposal.

    I’ll make the rest of the point in the article…when I am satisfied I have either enough info, or I have to stop somewhere.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    #195 is a change of subject and a diversion. So you can find someone else to discuss it with.
    Good bye.

  • Hope and Change?

    – he does seem to be moving things in the right direction….

    Yes they are beating down these scumbags….

    Barry = “More Torture Less Rights Than Bush”

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    You’re right,H&C. If he doesn’t make a move, and soon, he’s just another fuck-up!

  • http://drdreadful.blogspot.com Dr Dreadful

    Politics is boring compared to philosophy.

    Agreed, although the former is simply a subset of the latter and unfortunately Blogcritics doesn’t have a Philosophy section…

  • Cindy

    Roger,

    Politics is boring compared to philosophy.

    Okay. That is cool that you think that. I respect that. I think it is great that you enjoy philosophy and bring a different perspective. My friend enjoys philosophy and religion and a host of things I think are boring.

    All I am saying is, please don’t disrespect me, or what I understand, by suggesting that my view is deficient for my lack of love of philosophy. That I do not understand the appropriate “moves”. I have had philosophy. It was never my favorite way of getting real meaning about the world.

    And it’s not even necessary to making decisions in the modern world. People without education often understand more of the reality of how things work or how the world could be arranged best, than people with degrees from Harvard.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I’ve already sent my farewell letter, Cindy, on another thread. I’m basically done with BC as far as day-to-day communications are concerned.
    Good luck to you.

    Roger

  • Cindy

    My friend made some points Roger, and you know they are true.

    My concern is, what if I did not have such a friend? How long would you have discounted me?

  • http://handyfilm.blogspot.com handyguy

    Wow, here I gave Bobby Jindal a pass last night and turns out his fellow Republicans were mostly unimpressed. Limbaugh actually requested that they back off. Cause, you know, you shouldn’t speak honestly if it means running down the team.

  • Cindy

    No criticism allowed. Okay. I hold out hope that that can change.

    You said you wanted honesty. Too bad honesty turns out to mean people agreeing with you.

  • http://handyfilm.blogspot.com handyguy

    Come on, Roger, stay, please — don’t be a drama queen.

    We need a reasonable voice like yours. I tweaked you for ‘agreeing with everybody,’ but it’s actually a refreshing quality in the BC comments section.

  • Cindy

    Come on, Roger, stay, please — don’t be a drama queen.

    I second that!

  • Cindy

    Roger,

    Let me clarify something. You had no compunctions about trying to make me feel stupid and not to be taken seriously–undereducated and denying 2500 years of argument. To the extent I took you seriously. I would read what you gave me (yet I did not understand why you never read what I gave you). Good thing I don’t generally trust even nice people.

    The minute I call you on it, you are hurt and you are gone.

    I hope some time you are able to argue differences rather than resort to these actions.

  • Cindy

    They smack of manipulation.

  • http://www.republicofdave.com Dave Nalle

    Roger, let me share a quote from Herman Melville whose opinion of philosophy and in particular the transcendentalists I tend to share:

    “There is no faith, and no stoicism and no philosophy, that a mortal man can possibly evoke, which will stand the final test in a real impassioned onset of life and passion upon him. Faith and philosophy are air, but events are brass.”

    Dave

  • Cindy

    Baronius,

    “So, what is your problem?”

    My main problem is not enough caffeine. A secondary problem is that the threads have been wandering something fierce lately, and I think it’s fair to call people on it.

    Fair enough :-) and funny too! :-)

  • http://handyfilm.blogspot.com handyguy

    Did you give up coffee for Lent, Baronius? Now that is a sacrifice. [I mean it.]

  • Cindy

    Roger,

    I am an inconsiderate idiot with a big mouth. That’s the truth too.

  • Baronius

    Nope, I’m not giving up caffeine. That’d be tough on me, but unbearable to those around me.

    I stopped watching the State of the Union response many years ago. It’s an impossible scenario. You’ve got to write a response to a speech you haven’t heard, which is bad enough. The worse part is that the SotU speech is usually so vague and laden with applause lines that there’s nothing much to respond to. So you’ve got to be even more vague, for both reasons. On top of that, it’s like opening for Springsteen, except he goes first.

  • http://drdreadful.blogspot.com Dr Dreadful

    A gentlemanly arrangement would be if the responder were given (on condition of strict confidentiality, of course) a copy of the President’s proposed speech a day or two in advance. That would give him or her a better idea of how to approach the rebuttal and would keep both parties on their toes.

    Still, even though Jindal hadn’t heard Obama’s speech it didn’t take a genius to know what was going to be in it.

  • Mark

    While he did warm into it a bit, BJ’s performance was the worst in years.

  • Baronius

    Dread, I’ve had the same thought. But there are always last-minute changes, and then there’d be accusations. I say just drop the rebuttal.

  • Clavos

    Cindy sez,

    The minute I call you on it, you are hurt and you are gone.

    I hope some time you are able to argue differences rather than resort to these actions.

    They smack of manipulation.

    Quoted for Truth.

    This is the second time (at least) he’s threatened to depart.

  • Mar k

    Serious chess players are almost invariably temperamental.

  • STM

    Roger: “I’ve already sent my farewell letter, Cindy, on another thread. I’m basically done with BC”

    Come on, Rog … don’t throw in the towel mate. Stick around buddy – everything and everyone gets a virtual shafting on here from time to time.

    That’s democracy, and here on BC, we love youse all.

    (I might make an exception for H&C?, although some of the scientific commentators could find him interesting, especially if they’re resarching stories about the evolution of brain-eating single-cell ameoba.)

  • http://drdreadful.blogspot.com Dr Dreadful

    Thing is, I can’t for the life of me figure out what it was Cindy said that upset him so much.

  • STM

    What did Cindy say?

    She’s good and feisty – she poked me in the eye (and probably in the bum, too) with a virtual sharp stick the first few weeks I encountered here on the BC threads.

    But that’s why we love it.

    Don’t leave Rog .. come back. We miss you already.

  • http://www.republicofdave.com Dave Nalle

    What bothers me is all these people in the media making out like Jindal is the future of the GOP. I’ve seen some of it on here and some of the MSM talkers were saying things like that Jindal is the new “de facto head of the party.” Come again? He’s a one-term governor of a minor state with no special status or credentials, and evidently a pretty terrible public speaker.

    Mark Sanford has enormously more credibility as a presidential candidate and makes much better speeches too. That’s always assuming we’ll be allowed to run a token candidate in future presidential elections.

    And as for those complaining that these governors are “grandstanding”, they clearly don’t understand what is going on here. The stand against the unemployment funding is largely symbolic. They just happened to choose that issue on which to make a stand and make their point. I think it’s great to see someone in government standing up for a principle for once.

    Dave

  • Hope and Change?

    Dave…the media will alway try and put the worst face on conservatives…its what they do…

    The memo sent from the DNC to all media outlets was pretty clear..

    “Praise Barry — mock and scorn all who oppose him”

  • Baronius

    C’mon Dave, this is an easy one. First of all, the little girls of the Washington press corps love superficial displays like the SotU and conventions. These events are like cool-kids’ parties, where an invitation or a snub can affect your status. It’s easier to look at the superficial things than, say, read up on how a Senator is voting.

    Second, if Jindal isn’t the rising star of the Republican party, that leaves only two other possibilities: Palin and Steele. They’re unacceptable to the mainstream media for different reasons.

  • http://handyfilm.blogspot.com handyguy

    Baronius, the motivations you ascribe to ‘the media’ reside entirely within your own brain.

    Much of the most excoriating criticism of the Jindal speech came from Republicans: Charles Krauthammer, Laura Ingraham, David Brooks [well he says he’s still a Republican].

    And you don’t really have to have stars in your eyes to admit how well done the president’s speech was. You may dislike the message, but the delivery was just about flawless. And viewers at home seem to have had a powerfully positive response.

    “Little girls”? Andrea Mitchell could whip you in a debate anytime, bud. Candy Crowley too. They are tough-minded, excellent journalists.

  • Hope and Change?

    Handyguy your ignorance is showing…

    Andrea “Chronic Yeast Infection” Mitchell is a dult. This morining on MSNBCs Morning Joe…she was asked by Joe why the US is taking such a drastic shift to apeease the radical muslims with the appointment of Charles Freeman Jr.

    First she said she wasnt aware of it and then proceded to defend Freeman and Barry..

    Ruvy..Jump in here to educate Handy on what a Jew hating antisemite Freeman is…

    Why dont you cut the looney crap out and get a job!!!!

  • Baronius

    Handy, by “little girls”, I was thinking more along the lines of David Broder and David Gregory.

  • http://ruvysroost.blogspot.com Ruvy

    Hope & Change –

    Ruvy..Jump in here to educate Handy on what a Jew hating antisemite Freeman is…

    Handyguy doesn’t give a shit if Barry and Freeman are Jew-haters; he has his own agenda that has nothing to do with Jews, per se. But more to the point, Andrea Mitchell is probably right to say there has been no radical shift in US policy. The actual policy, the one that someone like Bush or Cheney would not want to be seen in public (Bush was obviously the toady of the ibn-Sauds and the bin-Ladens), is coming out into the open. If she defends the assholes, then it tells you where her prejudices lie. She is not a little girl – she is also a Jew-hater, like Freeman. It’s good to know who and where your enemies are, H&C.

  • http://www.thecobraslair.com Cobra

    Now, hold on a minute here. I’m not claiming to be an economist, but I do know a little about math.

    If you spent 8 years cutting taxes to the tune of $1.9 Trillion dollars…

    And you fight not one, but two wars starting 7 years ago at around $11 million an hour–$12 Billion a month…(while hiding those costs so it doesn’t show on the budget)

    And never veto ONE Republican Congress spending bill… you’re going to have a hellacious deficit left for the next administration to deal with.

    Why is all this sudden “I’m a deficit-hawk so we can’t spend” crap coming up NOW from the right?

    I honestly don’t know what the answer is. I also know that the last group in charge didn’t have one.

    –Cobra

  • Poisonpen

    Hello Ruvy:).. good to see your comments… about comment #67… I’m adressing my comments to you because i remember that post very well Chalmers Johnson’s Blowback – The Costs and Consequences of American Empire: Is America in Decline? (That article holds the record for most comments in the politics section ) on which you commented where you rightly said that Nalle was going too far in dispensing the Prozac.

    And yes its true that writers such as C R Sridhar writing under the pseudonymn Socrates saw this coming a long time before Nalle did.

    Its very interesting to watch the number of times Nalle has contradicted himself.He vehemently attacked bloggers on that post for saying the very same things that he holds as Gospel now. [Personal attack deleted by Comments Editor]

    Take this statement by Nalle in this present article Ruvy. He says…“there was over-extension of credit in the real estate market in the form of bad loans to unqualified borrowers which was then compounded by utterly irresponsible speculative repackaging and marketing of those debts as derivatives. When the robust economic growth which had allowed lenders to get away with these practices began to slow down causing a decline in real estate values, the speculative house of cards they had created came tumbling down.”

    “irresponsible speculative repackaging and marketing of those debts as derivatives” eh??… Many commentators… one can easily check the facts pointed out the dangers of derivatives to Nalle and they were dismissed contemptuously. They were accussed of fear mongering or even of being left wing conspiracy theorists. Nalle has come around to his present views, THE VERY SAME VIEWS for which he attacked his fellow bloggers with such vehemence simply because the evidence is so overwhelming that he can no longer ignore the inconvenient truth. He says these things because he now knows which way the wind is blowing..

    But back then…. What did he say??? Remember this was oh… not so long ago he was defending derivatives and structured finance. “There has always been a certain amount of ‘structured finance’ even if it took somewhat different forms in the past. I remember the 1980s when people were leveraged way beyond anything you see today. And again, the overextended segment of the financial market is still limited in size. Your average investor is probably less overextended today than at other times in history.”

    There’s almost always some sort of crisis looming. I just don’t see this one – which was so obvious and predictable – as being worse than most others.

    As for the current real estate cycle, there are many parts of the country like Austin where I live which are still going up. Compared to the down cycle in the late 80s this slump is trivial.

    I find it interesting that Clavos links to articles from the mainstream economic news sources and all Anand can come up with is bloggers with an agenda to push…… this one is interesting because at that point even the WSJ and The New York Times were both in denial about the extent of the problems.They stopped when events unfolded rapidly and when they realised that their credibility was at stake… the very same events which commentators on that post warned about. Back then Nalle was sneering at the people who were really in the know…

    here’s some more of his gems…

    Anand, whatever happens in housing is inherently contained because although housing is important, it is only one element of the economy. There’s only so much damage that a drop in housing prices and a few foreclosures can actually do.

    And keep in mind that if housing values increased 200% in the last 5 years and drop 20% this year, people overall are still going to be ahead.

    Yep, we might have a recession. Recessions happen. IMO it’s still a little too soon for one. I’d expect another short-term recovery before we have a real recession.

    Again, you’re operating on the ridiculous assumption that a decline in housing prices harms everyone, when the truth is that as some suffer a tiny bit from seeing their houses that went up 200% in the last 5 years go down 10% leaving them with only 180% profit, others will benefit from more affordable housing, leaving them with more disposable income, benefitting the economy in general. …and we can all see for ourselves how well the economy has benefitted.

    Turns out that 70% of the US GDP is domestic consumption.That being the case, imagine how well buffered our economy is against the kinds of things Anand keeps bringing up.….and right now the battered,bruised and beleaugured consumer is hunkering down for a long and painful recession.

    The truth is that foreclosures are declining nationwide…

    Oh and wait…the WSJ says that the Subprime Crisis is Over. What on earth will we do if the sky stops falling? So the crisis is over according to Nalle if the WSJ say so.If the WSJ were to say that Obama wears pink panties he’s going to endorse it.

    I just think it makes more sense to worry about the real threats rather than trying to fearmonger about aspects of the economy which are cyclical and hardly out of control. A bunch of real estate trading hands with one group of people losing money and another picking up bargains and making money is hardly a disaster in the long run. …of course not at all a disaster for Nalle then but a terrible one for him now.

    haven’t finished yet… some more beauties….
    I put the current situation in historical context. In that context it’s very clear that while there are certainly problems today, the situation is nowhere near as desperate as it was in the crisis periods of the 70s and 80s.

    Perhaps we need to redefine the term ‘recession’. Even Mike should be able to admit that our current situation doesn’t fit the traditional criteria for a recession since we haven’t had two consecutive quarters of negative growth. …so according to Nalle there isn’t even a recession on at present.

    The Ford-Carter recession was the worst as a percentage of GDP. Compared to both of those the current recession is much less intense. It looks like it’s about half-way through and is going to be about 2/3 as bad as the Clinton recession and half as bad as the Ford-Carter recession, based on the rate of decline and depth of decline over time. …how’s that for prescience?

    Best guess is that it will start to turn around in the next 6 months and we’ll be out of recession sometime in 2009. A very nice break for the next president who will get credit for economic developments he has no actual role in, just as Bush got blamed for the Clinton recession.
    …Oh yes! yes! yes!… its all turned around wonderfully well for Obama hasn’t it?…. actually now Nalle’s main job is attacking Obama for trying to rectify the mess he inherited from the Bush years…..

    Ruvy,nowadays Nalle pontificates… “In retrospect the crisis would have been easy to avert. Government regulators should have stepped in and told mortgage investment companies and banks they had to limit the amount they could borrow against mortgages — maybe to a level of 3 to 1. If they had done just that, even the inevitable foreclosures on bad mortgages would have been survivable. If they’d gone farther and dealt with the bad mortgages and irresponsible lending practices with some sensible regulation, so much the better.”

    THE GREAT PONTIFICATOR [Edited] adds.“When you cut your foot on a loose nail in your deck, your priority is on stopping the flow of blood first and you hammer the nail back in later.” ….which is what a lot of commentators on that post were in essence saying back then almost two years ago.. Has Nalle apologised to those commentators for attacking them…. and attacked them with such vehemence for what? …for saying the very same things he’s saying now … when will he put up his hand and say…. I was wrong all along? Does he have any credibility left??

  • http://ruvysroost.blogspot.com Ruvy

    Heh!

    Good thing I try to put my predictions in the form of scenarios. I’ve been off many times – more times than I care to think about! But I at least have figured out the basic trends, even though I’ve gotten the details wrong many many times.

    With respect to the economy, this stuff was easy enough for even half blind fools like me to see once I saw the basic numbers. You can only go so far into debt without drowning – unless you kill your creditors (a solution I’ve mentioned at Blogcritics Magazine a number of times, BTW). So, either you pull out of debt or you fall over its cliff.

    Do I need to tell you what is happening now?

  • http://ruvysroost.blogspot.com Ruvy

    By the way, a thought for Poison Pen. One fellow here used the name “Vox Populi” as a sort of echo chamber to give him applause and support for his views. The internet is not a forgiving place, and even now commenters are calling this fellow by “Vox Populi” even though the gentleman in question has attempted apologize a number of times (another good thing an EMP attack would do for the United States – clear the internet of all the shit befouling it).

    It pays to learn from these lessons and not to forget them….

  • STM

    Poison: The problem with those comments by Socrates and his mates wasn’t so much that everyone was disagreeing with what he said or weren’t unappreciative of the fact that things might get very bad indeed.

    (And right now, they might or might not … the jury’s still out.)

    Rather, it was that in Socrates’ slightly twisted world view, there seemed to be much gleeful rubbing of hands together predicting the sky would fall in – and largely because, according to that view, it would be the end of America and would open the way for a new but revised world order whose time had suddenly come.

    I’m assuming from the tone of the comments by Socrates and some others that in their thinking, India was a major part of that revised world order.

    The problem is, as we can all see, it’s a GLOBAL financial crisis; it’s not just America going down the pan, but all of us.

    India included. That’s why there didn’t seem to be much point to that original argument.

    Right now – and I’m not American – the whole world should instead be waiting with bated breath hoping and praying that America doesn’t go down the gurgler, because if it does … you ain’t seen nothing yet, trust me.

  • http://www.republicofdave.com Dave Nalle


    And you fight not one, but two wars starting 7 years ago at around $11 million an hour–$12 Billion a month…(while hiding those costs so it doesn’t show on the budget)

    Which pales in comparison to the $28 billion per DAY which Obama is spending.

    And never veto ONE Republican Congress spending bill… you’re going to have a hellacious deficit left for the next administration to deal with.

    Put the war aside and those bills were really remarkably lean.

    Why is all this sudden “I’m a deficit-hawk so we can’t spend” crap coming up NOW from the right?

    It’s been coming from the right all along, but the actual conservative anti-spending right was no more in power under Bush than they are now.

    Dave

  • M(ark E)den

    Speaking of bated breath, where’s the promised rational, realistic, pragmatic and empirically based part 2?

  • Poisonpen

    STM thank you for those comments.However I have to correct you on a few things:
    1.There was no gleeful rubbing of the hands on account of America’s decline.It was an attempt to warn of the dangers of imperial expansion coupled with reckless finacial innovation.
    2.India is NOT going to be part of that revised world order.India has to raise its standards.India has to establish THE RULE OF LAW and has to deal with issues such as public governance,corruption and improve on its infrastructure,education,health,Police,Judiciary…you name it…there has to be a wholesale change before it can preen its feathers.Socrates is extremely critical of certain facets of neo liberalism which have been blindly adopted in India by its elites and whose policies have negatively affected millions of Indians.Doing low level back-end grunt work vis a vis its IT and BPO sector is not an example of Shining India…its more like Shoe-shining India.India has to stop this dependence on the generosity of foreigners.

    I can vouchsafe for all this because I know Socrates personally.

    If you are interested you can get an idea about the kind of stuff he writes here…

    Articles by Socrates A.K.A C.R. Sridhar

  • Poisonpen

    And STM…there’s one more thing .The vast majority of Indians were anyway excluded from this swindling done in the name of “reform”.Real reform never happened.The elites of India are hell bent on pursuing the same deeply flawed models of “development” that have now come to be discredited.

  • http://drdreadful.blogspot.com Dr Dreadful

    Which pales in comparison to the $28 billion per DAY which Obama is spending.

    On the war??

    It’s been coming from the right all along, but the actual conservative anti-spending right was no more in power under Bush than they are now.

    Course it was. The fiscally conservative right sat in the corner so as to be sure no-one would actually see or hear them and mumbled, ‘Running up a deficit is a really bad idea’, and now they want to claim they made their voice heard.

  • http://www.fontcraft.com Dave Nalle

    OMG, Poison. I’m not a prophet. Who’d have thought. I’ll work on growing a long white beard and try again.

    But at least I’m not an America-bashing, hate-filled socialist goon.

    I can live with being accused of being overly optomistic, but there’s no upside to being a shill for the people you ally with.

    Dave

  • Hope and Change?

    Well there he goes again….

    The charitable giving deduction reduction, which would limit deductions for couples making $250,000 or individuals making $200,000, provoked the most heat Thursday. Mr. Obama is counting on that provision to raise $179.8 billion over 10 year.

    Why does King Barry want to STEAL $179.8 billion from non profit organizations? I thought the rich were going to pay for the Scamulus package…but not we find out the poor and non-profits will chip in too…

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    H&C,

    You have it all wrong. People should never rely on voluntary charities to keep them well fed, clothed, housed, happy and healthy. It is very, very bad to encourage that sort of groveling dependence, and those who contribute to charities are not only enablers; under current tax laws, they diminish Government revenues badly needed for desirable essential social programs.

    People must rely exclusively on the Government to keep them well fed, clothed, housed, happy and healthy. That promotes good, rather than bad, dependence and thereby strengthens the Government. Therefore, no charitable donations should be tax advantaged; indeed, a special surtax should be imposed on the vile miscreants who undermine the Government’s most important work by making such donations.

    Dan(Miller)

  • Hope and Change?

    Ohhhh…yes it is all clear now!

    People really dont know whats best for them or even how to invest or spend their money. Government is the ONLY ome who knows what to do with our money and what charitable causes we actual need…

    Thank you for clearing that up! Come to think of it..this worked pretty well in the Soviet Union for a pretty long time so it must be OK….

    PS Which days of the week will we be getting in line for bread and toilet paper?

  • Baronius

    It’s Bush’s fault that he spent too much and cut taxes…so now, to get us out of the situation, we need stimulus and tax cuts…

  • Cindy

    “There’s no government like no government.”

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    H&C

    I’m delighted that you now understand, and hope that you are indeed changing your wicked ways. Just to be sure, however, you are hereby directed to report to the reeducation center most distant from your place of residence. Transport will be provided at Government expense. No personal belongings will be permitted to accompany you; WE will provide everything deemed necessary. Additional information will be provided as soon as possible.

    No information is currently available concerning bread and toilet paper allocations. However, be assured that whatever you need will be provided when it is determined that you need it.

    Dan(Miller)

  • http://drdreadful.blogspot.com Dr Dreadful

    Bread will be available in the restrooms and toilet paper in the kitchen.

  • Cindy

    I hope for your sake that you’re white H&C. There is no telling where the U.S. government might “transport” you if you’re not.

    It’s got to do with “law” and “justice” and “freedom” and stuff like that.

    Who knows? I have trouble understanding the finer points of those issues.

  • Baronius

    How can a former community organizer give the shaft to America’s charities?

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    H&C,

    Based on diligent research undertaken to respond further to your question in Comment #244, I am pleased to advise that toilet paper as we have come to know it is no longer needed. A far superior product will soon become widely available, thanks to a modest grant (less than $10,000,000,000) under the recent stimulus legislation. Use will be mandated as soon as a neobipartisan consensus can be reached. In the meantime, here is all that you need to know:

    Using cloth toilet wipes actually has many advantages. For one, it’s a lot more comfortable and soft on your most delicate body parts. It’s also more economical, uses less paper, and saves you those late-night trips to the store. And cloth wipes can be used wet without any of the sopping disintegration that regular toilet paper is prone to. For a discussion of the practical aspects of using cloth toilet wipes, please check out our page detailing How to Use Cloth Wipes.

    Additional information is available at the linked site or at O_Ba_Ma_O_Ba_Ma.Gov.

    Dan(Miller)

    Doc’s generous offering in Comment #248 is no longer accurate. Reusable toilet wipes will be provided at Federal Distribution Points (FRTWDPs) within easy reach of everyone.

  • Baronius

    Dan, are you sure that’s the right website number?

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Opps, I forgot the area code. It is, 202.

    Dan(Miller)

  • http://drdreadful.blogspot.com Dr Dreadful

    I couldn’t help but notice that one of the bathrooms illustrated in the demo on how to use cloth wipes still has toilet paper…

    For those truly epic and/or explosive episodes, I guess there’s no substitute.

  • Hope and Change?

    Dan…was that “recent stimulus legislation” or “rectal stimulus legislation”?

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    H&C

    Yes.

    Dan(Miller)

  • Cindy DiGeso

    The latest in bailouts. Hard to believe it Dave, but this is conclusive proof you were right!

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Doc,

    Indeed. Monumental Movements to the Left in which we can all truly believe cannot be expected to occur overnight. “Hope and Change” has been our National watchword for only a month and a week, and the movement is still in its infancy. Soon, all will be well.

    As we speak write, the linked site and the Ob_Ba_Ma_O_Ba_Ma_202.Gov site are being updated. Do check back soon.

    Dan(Miller)

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Cindy,

    Santa Claus! Outrageous! What additional important Christian symbols are next to come under attack? Perhaps the Easter Bunny? Fat Tuesday, Good Friday, the whole concept of Carnival?

    What’s worse, even our beloved President has come under an antisemantic barrage from the Right, questioning his removal from a list of Senators requesting an earringmark.

    The End Days are upon us. Repent. Now.

    Dan(Miller)

    Sneaks quietly from the room to guard his supply of ecologically friendly reusable cloth toilet wipes.

  • bliffle

    The problem with the stimulus bill is that it seeks to return the economy to “normal”, which I suppose means like a few years ago.

    But it won’t work because we’ve made irreversible changes to our economy, like one-time spending binges in favor of the Havemores and the Warriors.

    That money is gone and so are a lot of businesses and institutions that depended on it.

    We have to find a new economic future, and not just reproduce the errors of the past that got us in this mess.

  • Cindy

    Let’s face it Dan Miller. Santa is a Capitalist. Look at what he said about the elves. (something like…what pensions?…work forever or until you accidentally fall into a bush…and something about getting a queen irretrievably stuck somewhere…I think…or I could be somewhat confused…but in the end it’s all the same…so, I’ve been told.)

    Anyhow, it’s right there in factual black and white…or color…they have video!…you can’t argue with that!

  • bliffle

    The radio news reports that GDP is down 6%, which is alarming. Even more alarming is that the ACTUAL GDP loss is probably much larger, and probably has been accelerating through the year so it will get worse. A big problem is the continuing attrition in US sales to other countries. We don’t have things (like cars) that other people want, and anyhow they’re too expensive. And a TV buyer in, say, Portugal, think any differently from an American? Why buy an American TV rather than a Chinese?

    Those are just some of the gross market effects.

    Even worse is the decimation of US business generally over the last 20-30 years as rogue executives have systematically and thoroughly cashed in the assets and bluesky of the companies they have commandeered. They have chosen to NOT work at building their company up and making it more successful, then participating in the fruits of success, but rather to exploit the assets already in the company from past managers. That way they could gain big bonuses quickly, not have to wait around for success and the beneficence of the BoD, which is often chary. It works, for them, but leaves the company a hollow facade, as we see in US companies one after another.

    For example, GM has been systematically looted for at least the last ten years by greedy management. They sold everything they could, which yielded short term profits that swelled their bonus plans and also enriched their stock vestings, until now GM simply has no retained earnings with which to weather hard times.

    That has been done across the spectrum in US business. There is no turning back the clock. There’s no way to replace those riches.

    Which is why it’s futile to think that we can do something to weather this storm “until things return to normal”, because they never will because it is simply not possible.

    Those looted companies must be allowed to collapse. New industries and new companies must be nourished to create an entirely new US economy. We have a natural edge to do such things in the “green” industries of the future.

    There is no going back.

  • Cannonshop

    #262 But Bliffle, what about the magickal-unicorn-“Service Economy” that was so hyped that it was acceptable through every administration from Carter to now for these bozos to do what they did?

    Isn’t this “service Economy” supposed to save everyone??

    It didn’t, of course-the same corporate raiders and their political sock-puppets who advocated it found out they could get “service economy” people EvEN CHEAPER than manufacturing somewhere else…like indonesia, bangladesh, etc. etc.

    Your “Green industries” will go the same way, because it’s the same people who gutted the REAL industries in this country pushing those.

  • Poisonpen

    Dave Nalle,I’m not a card carrying member of any party.

    But at least I’m not an America-bashing, hate-filled socialist goon. ..the animosity emanating on that post was from people like you who also happen to be Politics Editor.#232 is only a small sample of the number of times you’ve got it wrong.Show me evidence of hate Nalle…where did we show hate?

    I can live with being accused of being overly optomistic, but there’s no upside to being a shill for the people you ally with.

  • bliffle

    The ‘service economy’ always was a dud. No way that waiters wages could be better than welders wages.

    The USA is uniquely positioned by education, interest, and history to exploit green industries, which everyone everywhere will be desirous of converting to.

    And now, with our traditional industrial base demolished, we have no reason to not move ahead.

  • Cannonshop

    #263 No, with our traditional industrial base demolished, and the accumulated capital from it looted, we don’t have the ABILITY to make effective movement ahead on your ‘green’ industries.

    Education in this country’s gone nowhere but downward since the sixties, though additional accreditation is at an all-time high (still). We’re graduating illiterates because they did their ninety hours of community service, and colleges are stuffed with doofuses that a generation ago wouldn’t have graduated high-school.

    The best engineers at our remaining industrial plants come from places like Pakistan, India, and Europe-where an education really IS an education-I’ve seen this at Boeing in person. Our schools generate lots of idiots with business degrees and lots of parasites with law degrees, but mismanagement and litigation won’t make your Green Dream a reality. The intellectual capital just isn’t there, the cashy-money capital isn’t there either, and as for “know How”-get it through a courtroom because that’s where any serious project’s going to end up-sued by NIMBYs. (as occurred with the offshore wind-farms off the northeast recently).

    The only way government can make your Green Dream happen, is to go ahead and finish off the corpse of a free society, nationalize everything, and put a dictator in charge. Lucky for you, that’s basically what the American People want anyway-they just don’t want the labels that go with it.

  • Poisonpen

    C’mon Nalle where is the evidence of me being a ” America bashing hate filled socialist goon”??… Does being Politics Editor give you special priveleges with regard to name calling? [Edited]

  • http://www.republicofdave.com Dave Nalle

    PP, it’s an opinion. Doesn’t require evidence. If anyone wants to form their own opinions, they can read your comments under your various other pseudonyms — you know, what people post under when they don’t want anyone to identify them with what they write.

    As for “name calling” the comments editors can and have edited me before. That’s their job. I don’t whine about it when it happens.

    Dave

  • Cannonshop

    #267
    “C’mon Nalle where is the evidence of me being a ” America bashing hate filled socialist goon”??…Does being Politics Editor give you special priveleges with regard to name calling? [Edited]”

    You don’t get to, because someone else already got exclusive rights to it, and you’re just not awesome enough to get into that club yet. When you’re as amusing as Jet, as sincere as CindyB, or as British as Chris, you might get invited in.

    You’re probably not awesum enough to get into the Pablo “You’re no Right-Winger/Libertarian because you don’t like Alex Jones” club either-your tinfoil isn’t oriented the right way.

    Of course, by mocking Chris Rose, I suppose you might qualify for the Moonraven Brigade, who knows? I suppose it might be possible that you think you’re on the Daily Kos website, and using words like “Shithead” on other posters or writers is okay there-but maybe you should consider that this is neither Redstate, nor Infowars, nor is it the Daily Kos. Calling people names directly really isn’t looked upon with favour, even when they have politics you don’t like.

  • http://www.republicofdave.com Dave Nalle

    Bliffle, you’re right to single GM out as an example. It was a company which made a crappy product and was looted because they couldn’t figure out how to make the company work right. It was fundamentally broken.

    But you’re wrong to suggest that this was a pervasive pattern in the business sector. Sure, there are a few examples, and I agree that they ought to be allowed to fail, but there are tens of thousands of corporations in the US and there are only a few which have been systematically looted.

    Dave

  • Cindy

    Dan(Miller),

    Re: antisemanticism. Well, he is a lawyer. Didn’t you guys invent that? :-)

  • Clavos

    Cindy,

    No, but they did perfect it…:>)

    flees, cackling,into the darkness, avoiding Miller

  • Cindy

    Clav,

    Are you good with html? You might want to help Dan(Miller) out. I heard he is trying to find a way to make the fine print on his posts smaller.
    :-)

  • bliffle

    Actually, the looting of sunset US companies by pirate executives IS pervasive. Even business periodicals commented on it (when I was still reading such periodicals in hopes of learning something).

    The examples of top execs shepherding their companies to success occur in New Industries, such as computers/internet, etc., but I can assure you that pirate opportunists stand ready to loot them, too. In the modern era we have telescoped time requirements so that things can happen more rapidly.

    If capitalism is to survive it must revise corporate charters and especially the composition and rights of the Board Of Directors.

  • http://www.republicofdave.com Dave Nalle

    Bliff, I think we can agree that we’re transitioning from old industries to new industries, and in the process the companies in the old industries are going to evolve, move overseas or get gutted. That’s part of the process of change and I don’t see it as a problem necessarily.

    But I still think that the number of major companies being gutted is small relative to even the number of substantial new startups in the same time period, and certainly when compared to the overall size of the business community.

    Dave

  • bliffle

    Not really, the lessons of the Japanese adoption of such as “just-in-time ordering” etc., have spread throughout business in the past 20 years. And running so lean is critical.

    About banks: Ira Glass has an excellent rundown on what’s happening and what could happen on todays “This American Life”. Here’s the audio URL:

    Ira Glass no. 375

    Very good.

  • bliffle

    You are much too compacent, Dave, if you care about saving what was best about old capitalism while something new is created to replace it, which is what will happen in the near future.

  • http://www.republicofdave.com Dave Nalle

    Hey, I’m all for innovative capitalism, Bliff. Just so long as we stick with the basic principles of capitalism any improvements are welcome.

    Dave

  • bliffle

    There won’t be ‘improvements’ or patches. I suspect that a whole new superstructure will be created with government playing a much bigger role. The old myth of “self correcting free markets” is swept away and and such free markets as remain will be confined to tactical segments of the economy.

    After the previous ‘capitalists’ looted the economy, and then the bankers held the economy hostage to extort a couple trillion more from taxpayers at gunpoint, I think that neither politicians or citizens have any interest in rebuilding that system again just to be ripped off again at some future date.

    Supporters of the old “self correcting free market” notion are defecting in hordes. Even jokers like Greenspan.

    Soon, all that will be remaining to support the old style will be the most hard-core rightists, and their number will continue to diminish. A big part of their problem is their unwillingness to reform their thinking and the adoption of hard-core opposition such as shown in votes against the Stimulus.

    The hard-right guys may have just p*ssed away their best chances.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    bliffle,

    This does look to me like the most plausible scenario. I don’t think there’ll be coming back to capitalism as we’ve known it. The push for the bigger part/role of the government in controlling/regulating/running the private sector is underway and, if anything, it’ll only gather momentum. Call it what you will, but that’s new face of the future.

  • bliffle

    Yes, the hard-right guys had their chance to show the good works that their ideas could do, and they blew it. They forfeited their credibility with their greed and bullying.

  • http://www.republicofdave.com Dave Nalle

    I think it would be horribly ironic to blame and then do away with free markets without ever having actually given them a chance. We certainly didn’t have anything resembling a real free market under Bush, and those who pretend that we did as an excuse to dismiss the whiole concept are being disingeuous and opportunistic.

    Dave

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    No, we didn’t. In which particular industries do you envisage a revival? Finance? Automotive? Construction? Infrastructure building?

  • STM

    Free-market capitalism has given all of us benefits that we could never have had under any other system.

    The problem is, there needs to be some regulation to stop what happened on Wall St ever happening again.

    This idea of letting the marketsb “sort themselves out”, which is what Greenspan has championed until now, has led us to this point.

    You can see the results. Having regulators impose some transparency won’t signal the end of the world as we know it.

    But it WILL mean that we can keep the kind of lifestyles we have without this crap ever happening again.

  • Clavos

    No, we didn’t. In which particular industries do you envisage a revival? Finance? Automotive? Construction? Infrastructure building?

    The finance industry is far from moribund, despite the failures among the giants; small and regional banks continue to thrive and do well–few of them were involved in the sub-prime mess. The automotive industry, likewise is far from dead; again, despite the troubles of the big two (not three–Ford is in much better financial condition than the other two, as are truck and heavy equipment manufacturers). Construction and infrastructure are interrelated, and have plenty of work in their future; housing is down, but office construction in many markets (Miami among them) remains active and viable.

    There are excesses to be shaken out in all those industries, but none will die out altogether; demand will return and new sources of revenue will open for all of them.

  • http://www.republicofdave.com Dave Nalle

    Yeah, I don’t see people no longer living in houses and apartments and working in offices happening any time soon or for that matter we’re not likely to start teleporting to work, so infrastructure will remain a need.

    Dave

  • http://drdreadful.blogspot.com Dr Dreadful

    I dunno, Dave. There’s H&C, for example. I’ve no reason not to believe that he lives in a grocery cart underneath a freeway overpass, and he apparently manages somehow to eke a living by obsessing on Democratic presidents and insulting people online. Perhaps he’s some sort of pioneer.

  • REMF(MCH)

    “As for “name calling” the comments editors can and have edited me before…I don’t whine about it when it happens.”
    – Dave Nalle

    CRASSHHH!!!!!!!!!!!!!!
    (as I fall out of my chair…)

  • Baronius

    What are the new industries? Mining, agriculture, shipping, trash collection – done right. Environmentally friendly and more efficient. Health care, nuclear power, psychopharmacology, fiber optics, air traffic control, casinos, bottled water, computer security, those little peanut butter cups they put in ice cream…things like that.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    A good list. The trick is to create an environment to make it happen.

  • Clavos

    I’ve no reason not to believe that he lives in a grocery cart underneath a freeway overpass

    Here in Miami, that’s where the sex offenders live — by public policy. That’s not a joke; the zealots so over-regulated the zones around schools and other places where children congregate, that the only place left for the sex offenders to sleep is under the bridges on the causeways in the middle of Biscayne Bay.

    According to news reports, the police come by every evening to do head counts, and woe betide any offender who’s not under the bridge after nightfall.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    It used to be called “bed-check,” Clavos.

  • Clavos

    These guys don’t have the luxury of beds, Roger.

  • Chris Edwards

    “Look at market fluctuations as your friend rather than your enemy;
    profit from folly rather than participate in it.”

    – Warren Buffett

    Berkshire’s equity fell 9.6% in 2008 and another 22% so far in 2009,

    Looks like Buffett is now the one participating in folly.

  • Cindy

    #291

    Clav,

    Thanks for that article. I added it to my now overflowing library of “unbelievable” (only because of being not widely reported) yet real everyday and every year and every century occurrences in the land of “American Exceptionalism”.

    I found the comments below the article as interesting as the article itself.

  • Clavos

    Looks like Buffett is now the one participating in folly.

    Hmm.

    According to news reports, his initial investors (and therefore he himself) are still enjoying profits in the multi thousands of percent (something along the lines of 6,000+ %, IIRC).

  • Cindy

    Chris Edwards,

    Don’t delude yourself. Warren Buffet will profit from the market.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Has he got security guards and barbed wire? He might need it.

  • http://takeitorleaveit.typepad.com/ roger nowosielski
  • Chris Edwards

    “Warren Buffet will profit from the market.”

    Are you going to run out and buy some of his Berkshire stock?

    Hurry so you can get in on the profit and call your friends so they can also participate.

  • Chris Edwards

    “recession or depression?’

    If housing prices are falling like it’s a depression, stocks are falling like it’s a depression, and if financial institutions are folding like it’s a depression. then obviously it must just be a recession.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I agree with you, Chris. If it tumbles, there’ll be no winners. Even selling short won’t save anybody’s ass. They’re gonna have to run to the hills with whatever possessions they still have, and pray.

  • http://drdreadful.blogspot.com Dr Dreadful

    Recession or depression?

    Neither – it’s a CWISIS!

    But not to worry – this fellow knows the way forward…

  • http://www.republicofdave.com Dave Nalle

    Chris E. the catch is that the various indicators of depression which you note are only regional. Large sections of the country aren’t experiencing massive unemployment or plunging housing prices or even failing financial institutions.

    Texas is not Michigan and it’s very far from Michigan. Our local banks are doing fine, our unemployment remains reasonable and housing prices are only down maybe 20% over the last couple of years. That suggests it’s not a depression.

    Dave

  • Chris Edwards

    ” the catch is that the various indicators of depression which you note are only regional. ”

    That’s today.

    Wait until tomorrow, i.e., 2010.

    The snowball is getting larger as it rolls down the hill.

    What’s going to stop it?

  • http://www.republicofdave.com Dave Nalle

    But Chris, Geithner says everything is going to be all better by 2010.

    Dave

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    That’s capital, Doc. Haven’t had such a laugh in years. Should be required reading … pst . . . for everyone on this site – including H&C.

    What pisses me the most, with all the talent and brain power around, how did we allow to get ourselves suckered into this bullshit – by the few unscrupulous, stupid, life-denying and life-hating men? There’s so much culture and civilization at stake and it’s all so fragile now because we relinquished the reins of power to the worst in humankind.

  • Clavos

    The snowball is getting larger as it rolls down the hill.

    What’s going to stop it?

    Certainly not the “stimulus.”

  • Cindy

    Chris,

    Warren Buffet has enough capital to profit in the market.

    When a) you have enough money to move a market you profit…or b) you can take a profit on “cents” trades. You will make money.

    Forget what Warren Buffet says. Do you think he’s going to tell sheep how he’ll fleece them?

    My brother-in-law was a Wall Street floor trader for what had been a a top specialist company on the exchange, Wagner Stott.

    Wagner Stott was bought out by Bear Stearns. His job was to make “cents” trades, every day for his entire career. That’s it. He retired early, before the of Bear Stearns’ collapse.

    As a day trader, after he retired, he was no better than me.

    If you have the capital you will make money. Warren Buffet isn’t going to tell you everything he does.

    My brother-in-law sad to say, is as astute as the average guesser on the market. They are all a bunch of ignorant twits. Which is why I so thoroughly enjoyed Dan(Miller)’s video on the Subprime lending fiasco. Because I know it is true. They don’t have a clue what they are doing.

    With enough money you’ll move the market or scalp profit from it. Unless you can do that, you can only guess.

    Just my opinion.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    #306: I’d like to believe it.

  • Cindy

    Oh…and importantly…you can only guess, while your larger opponents who are making money on you are moving the market to manipulate you, by inspiring both confidence and fear.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Cindy, In 1929, tycoons were jumping out of 40-storied buildings. When it all comes down to it, it’s all “paper money” there being nothing real to back it up. In Germany during the depression, people were hauling money in wheelbarrows to get a book of matches. Money is only a medium of exchange. There’s got to be something real behind it if money is to count for anything.

  • http://drdreadful.blogspot.com Dr Dreadful

    In 1929, tycoons were jumping out of 40-storied buildings.

    Actually, no they weren’t.

  • Clavos

    Most of the “tycoons” of the day came through the depression relatively unscathed.

    The likes of the Astors, Vanderbilts, Rockefellers, Morgans, etc. were little touched by it and in fact profited from it, as will many this time around.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Alright, I stand corrected. So who enabled them in those hard times? The government? The war effort?

  • Chris Edwards

    They only ones making money in the forseeable future will be the printing pressmen in the US Treasury Department.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    That’s a literal interpretation, Chris, and you know it – a cheap shot, should I say?

  • Clavos

    Their money and brains.

    Recessions and depressions offer opportunities to those astute and nimble enough to take advantage of them.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Hey, Cindy! You’ve got to listen to Doc’s audio. You’ll laugh your ass off.

  • Chris Edwards

    #316 was a response to #311.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Still, it’s funny.

  • Chris Edwards

    “Recessions and depressions offer opportunities to those astute and nimble enough to take advantage of them”

    And who might they be?

    Names please…

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    There must be opportunities, though, Clavos. I can relate to John D. Rockefeller, for instance. But he was starting from scratch. A long road. And if fortunes are lost, that’s how it’ll have to begin – anew. No?

  • Clavos

    We’ll know when it’s over, Chris. They will be the ones still standing and in control.

  • http://www.republicofdave.com Dave Nalle

    In 1929 my family were “tycoons” though not on the Rockefeller level. They made it through the depression by shutting down their factories for 3 years and going on vacation, because every day they operated they were taking a loss. Because they did this they were still around to reopen when WW2 came around and there was new demand for their products (tools, metal stock, etc.).

    AIG should take a lesson from this, or perhaps Congress should. If operating causes them to lose $60 billion a quarter maybe we’d all be better off if they just shut down.

    Dave

  • Chris Edwards

    “They will be the ones still standing and in control.”

    It’ll be a crap shoot.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Not if Obama has his way. And I’d rather it be him than them. They’ve got to be put on the leash.

  • Cindy

    John Kenneth Galbraith is mentioned in Dr.D’s link there. Gotta love him.

  • Clavos

    It’ll be a crap shoot.

    Of course. That kind of thing always is. But every crap shoot has winners, not just losers.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    That’s not the one I meant. It’s an Irish guy speaking from Dublin. Can’t you find it?

  • Cindy

    Chris wishes it will be a crap shoot.

    Most ordinary mortals cannot shut down a business like Dave’s relatives nor can he move a market.

    Chris, it is as if you think these people have the same factors affecting them as an average person. Or maybe it is the “wishful thinking” as suggested in Dr.D’s link there above.

  • Cindy

    “he” should be “they”

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    So World War II saved their ass. But I foresee a takeover – just like Castro did in Cuba.
    Desperate times, desperate measures.

  • Chris Edwards

    “But every crap shoot has winners, not just losers.”

    But for every winner there are many losers.

    Losers believe markets go up forever.

    Winners know that markets fall much faster than they go up.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Don’t we have a moratorium on “selling short”?

  • Chris Edwards

    roger,

    I rode the stock market and real estate roller coaster ride up to 2006 and then cashed out.

    The handwriting on the wall was so clear you’d have to be blind not to see it.

  • Cindy

    If it’s a crap shoot, then the rich who are playing are the house.

    The house always wins for a reason. The odds are in their favor. The stock market is a game. Someone makes money off of someone else’s loss. It’s as simple as that.

    Here is what happens every day:

    If you can push the other players around and take advantage of them you can win. And it’s very easy to do. Buy a stock low…get people to think the stock will go up by buying with visibility. When you have succeeded in inspiring confidence…sell into them and the stock begins to fall. As it falls, they are getting scared. They are losing the little gain they made. Now they are upside-down and at a loss. They sell…you buy (again). The stock then miraculously “bounces”. They get confident again they buy again….keep doing that. It’s not rocket science. It just takes money.

    Any good day trader knows what’s happening and most still can’t get in and out at the right times. Because they don’t have enough money to make money on just a few cents per share.

    The stock market is gambling.

    P.S. Roger: Re: a moratorium on short trading. I asked that today in the day trading channel. Not yet.

  • Cindy

    There is a regulation by upticks. So, you have to have upticks to short.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, the moment it started rising above 7000 and on, to no end, I knew something was fishy. No, I didn’t play, but I worked on Wall Street in the sixties when everything was still fairly stable.
    What these idiots don’t realize that the present Dow levels with historically low dollar is a recipe for disaster. GM stock trading at $2.00 or lower? Give me a break! The system had had it, and if it ever comes up again, it will be under totally different configuration.

    I really believe that the power of the corporation will become disabled.

  • Chris Edwards

    “Any good day trader knows what’s happening”

    Rolling the dice each day is a fool’s game.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, it’s a high, and people do it just for the thrill of it. But I thought that short-selling was stopped for a stretch.

  • Chris Edwards

    “The stock market is gambling”

    Not if you invest based on fundamentals.

    And fundamentals don’t change from day to day.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    There’s no more fundamentals to speak of. Not in the present environment.

  • Chris Edwards

    Bingo!

  • Cindy

    When fundamentals were important they mostly applied to investors. Some day traders got some use from them, for some trades. But mostly, from what I saw, most day traders use fundamentals as a security blanket. It’s like saying, “I’m safe trading this. It’s got good fundamentals.”

    That’s why, I think, when you got day traders as a phenomenon (online day trading), fundamentals went out the window for any stock with any volume.

  • Cindy

    Investors I met were angry when day traders were “in their stock”. It could wreck everything.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    I don’t think day traders have enough leverage to affect the movement of the market. They’re just riding it as best they can.

  • Cindy

    Yes, Roger. The day traders are not ever moving the market. And these days I have no idea what their influence is. But when I was a day trader the market movers were moving the market to take advantage of them, as I described above.

    There are always going to be bigger fish and smaller fish. Whether the smaller fish today are day traders or whoever…the bigger ones (ones with more capital) will manipulate so as to confuse and make money off them.

    As an investor, having day traders in your stock means you are subject to the same manipulation. Your stock is no longer a slow moving vehicle based on fundamentals or whatever. It becomes a rollercoaster and it can sometimes be left crashed and burned.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    So what do you think of Doc’s audio?

  • Cindy

    Dr.D had audio? What post #?

  • bliffle

    #284 – STM:

    “Having regulators impose some transparency won’t signal the end of the world as we know it.

    But it WILL mean that we can keep the kind of lifestyles we have without this crap ever happening again.”

    Not enough. “Transparency” is not a panacea. For example, insider trading reports are required only quarterly which means the trades are discovered 3 months less a day from the time they’re committed. Too late.

    What’s required is to rein in abuse of Corporate malice: Corps must have restricted charters (for specific purposes in specific markets) and the Board Of Directors must be better controlled. For example, government subsidies, even if indirect, should result in government overseers being proportional on the BoD. Deferred employee benefits such as health care and pensions should also be proportionately represented. Vendor bankers should get a rep.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    #303 – this one.

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    bliffle – you said in detail but I’ll say it plainly. The power of the corporation has got to be broken. They must be restored to the way they originally functioned – as part of the community, in a symbiotic relationship with the local economies – consumers, employees, the whole shebang. And we’d be fools if we allow private enterprise to hijack this country again.

  • Cindy

    lol that was good. #303

  • http://takeitorleaveit.typepad.com/ roger nowosielski

    Well, I’m gonna check out. Today’s posting was like being on a holiday – a departure from clear thinking and reasoning. Just let my emotions do the talking. Tomorrow it’ll be back to normal.