It Comes to Washington's New Face That There Is a Problem Without a Solution.
The new president has plenty of room to learn and make mistakes, and right now he is in the honeymoon period that will likely last till the summer. However Mr. Obama (right, in the
Roosevelt Treaty Room with the leadership of the Congress to jaw-jaw on the stimulus) gave a quote today that turned up in the very friendly Financial Times in a piece about the "rescue plan" and "hope." "US Rescue Plan Hopes Raised." There is too much irony here to pause. But inside the story, Mr. Obama's "we are monitoring" quote was thrillingly pompous, sounded something like one of George Noory's guests talking about "monitoring" invisible Shadow People creatures, and was perhaps a new form of "gee-whiz, you mean those guys on the television know as much as we do?" The word "frankly" is throat-clearing.
"We are monitoring what's happening and, frankly, the news has not been good," said Mr Obama, who has scheduled a daily economic briefing modelled on the daily White House intelligence briefing. "Each day brings, I think, greater focus on the problems that we're having not only in terms of job loss, but also in terms of some of the instabilities in the financial system."
Back at the Bank Failure.
Even though many good souls now notice that Mr. Obama is not a fresh thinker on the economy, no one much is going to say anything rude just because there is no percentage in
causing trouble in your part of the life raft -- and also because saying the POTUS is as clueless as Warren Buffet, Bill Gates, Angelina Jolie, Ken Lewis, John Thain, Robert Iger, Paula Abdul, Barney Frank and Larry Summers is meaningless rhetoric. Everyone is clueless. This is a mystery without a solution. Whatever the Obama administration does now, even especially push through the grotesquely swollen stimulus package See the Bill Text, filled with Democratic pork fantasies for schoolcare, greencare, daycare, healthcare, eldercare, farmcare, welfare, carfare, fair fare, is not going to alter the trajectory. We are doomed to a new bottom called No Care. Have you noticed that the U.K. banks are insolvent, and that the U.K., with bank debt at four times the GDP, may be insolvent? And that Gordon Brown and Alistair Darling are looking to Washington for leadership? The leadership is in the numbers. No one has gone broke since August 2007 by betting against the market. The only good investment idea in the last eighteen months has been to sell -- if you then put your cash in a bank, or at least did not put it with someone who gave it to Bernie Madoff.
There Is One Honest Man.
Simon Constable and I are calling Jimmy Rogers in the Gulf on Sunday 25 to ask about his uproarious week when he was quoted on the BBC and in the Financial Times saying that there was nothing left to buy in the UK, that London was dead as a financial center, and that the pound was worthless. Beyond gloomy. Jim Rogers has been with me since January 2008, and he was the go to guy on March 15 when Bear Sterns tried to fail and Hank Paulson and Ben Bernanke bailed it out by giving cheap money to Jamie Dimon at J.P. Morgan. Jimmy Rogers was peeved that night. Not as annoyed as he was on the night of September 17, the night the music died when Paulson and Bernanke contrarily let Lehman Brothers fail. That night Jimmy Rogers said that the whole system was done, and that though they would run the printing presses so loudly we could not hear to speak from Manhattan to Singapore, it would not put the system together again. Four months later, there is the genuine credible scenario that the banks in London, in Europe and in the US are already insolvent. Simon and I will ask Jimmy Rogers what is the prospect of nationalization of the banks sooner rather than later. There are worse scenarios. See 1933-34. And if Mr. Obama has a moment, while waiting for the IRS-challenged Mr. Geithner to clear the Senate, read the part about a bank holiday, issuing new currency, confiscation of gold, prosecution of J.P.Morgan Jr. and Samuel Insull, and 25% unemployment. Here's an edgy headline from Saturday January 24, 2009: Calif. Jobless Rate Jumps to 9.3%
In the doldrums that we have apparently adopted and accepted as our own, maybe we could reference Huck Finn and Tom Sawyer and Our Gang and the Little Rascals:
"It's lovely to live on a raft. We had the sky up there, all speckled with stars, and we used to lay on our backs and look up at them, and discuss about whether they was made or only just happened."
The honeymoon period has been over for weeks. The market is restless and doesn't like much of what it hears coming out of Washington, even with the change in administrations.
The Democrats need an immediate vote on the stimulus package, the one that won't do anything for the economy because: 1) it will take two years to get into the economic bloodstream, and 2) the white collar and service people who are losing their jobs won't be re-employed by the biggest portion of the stimulus, i.e., infrastructure buildouts, because they don't dig ditches and drive dump trucks (that's what illegal aliens do). So the Dems need a vote like yesterday so they can claim the credit when the economy starts to recover on its own. Time is of the essence! Democratic legislators nationwide stand to lose their jobs and that would be a genuine depression - for them.
BO's biggest problem is technology.
A recent invention is a shovel that stands by it self at the construction roadside.
Which reduces the unskilled labor content of any boondoggle project.
FF
Barry Obama is a Hardcore Socialist who helped create the mortgage crisis (perhaps deliberately) through his efforts at ACORN. In alliance with leftist Democrats and Fannie/Freddie, ACORN and pals forced the banks to give mortgages to 'underpriveleged' deadbeats who never had any hope or intention of paying back the loans.
Seeing how Barry, along with such stalwart intellectuals as Barney Frank and Chris Dodd, created the problem, who's to say that he wants a solution. Perhaps, as a devoted Marxist, he wants the US economy to be destroyed in its present form. That seems increasingly likely to me, the more I find out about young Barry Soetoro and his Communist mentors.
Barack Obama's election is the most gigantic deception ever perpetrated on the American people. The vast majority of Koolaid drinkers who voted for him have no idea what the man is really all about. If America survives this man, it is going to be a very different country.
Agree about Obama's designs on nationalization, but don't think he's alone - the Republicans were all in on it too. The government decided a couple of years ago that they wanted to nationalize the banks, but they were just too expensive at $60/share. So they planned, orchestrated, and facilitated a panic that drove the price down to $5/share, then went around to all the major financial institutions and said "Here's $10B (or $10M for the smaller ones) ... sign here... we now own 20% of your bank. We'll be in touch." Kind of like what you would expect from Hugo Chavez if you were able to inject him with about 50 additional points of IQ.
If you doubt for one moment that the government intentionally caused the panic, consider how they could have acted in any manner over the last 4 months that would have been better designed to scare people?
Trouble with China arises with Geithner's remarks on possible manipulation of the RMB.
The exchange underscored both a tougher stance by the Obama administration on China's trade policies and China's concern that protectionism in the United States could be on the rise. It also serves as a reminder of how the financial crisis has complicated diplomatic relations between the two countries.
It really is not a good idea to irritate your banker when you owe them money and they have the muscle to make your life painful. The Carter Years Redux. Oy!
California Dreaming on a winters day or Welcome to Hotel California with its $42 billion budget deficit. So in the immortal words of Joni Mitchell They($850 Billion stimulus package) Paved Paradise to put up a parking lot. (Joni was referring to Hawaii - Obama's home state.)
The EU and Great Britain had unsustainable social programs and I fear that this administration instead of learning from their mistakes is replicating them.
Hopefully, the GOP will see that Obama can be ignored as Blagovich and Patterson showed. The GOP should just say no because last years stimulus and TARP did not work.
THe collapse of the newspapers and banking industry harkens to the old Hepburn and Tracy movie 'The Desk Set" Grat to see Drudge Report issuing google trying to set the agenda in Washington. Unfortunately with many of us being lazy google may be able to re-write history like in the wikipedia comments. Maybe they can still help in finding the John Galt credit card contributions to Obama's campaign.
Despite the enthusiastic burblings of Globablism's proponents, maybe running huge trade deficits does really does matter, at least once we begin to have serious and inevitable differences of opinion with our foreign creditors over issues of national self-interest. Who would have thought it?
JB someone over at frontpage disagrees with your assessment on the strength of the Putin government. PLace the Malatov Ribintroff accord as to Gerhard Schroder working for gazprom to get pipeline on Baltic sea to cut out Poland and Ukraine. Merkel would have field day. Also we can see the staging of Boxer rebellion or Chinese interference in the stans. Remember there are too many chinese males and the russians are dying before they are getting to sixty.
We are looking at who drowns or blinks first.
Also, Geeson left Blago and Blago will go nuclear. Not only Rezko talking but Blago.
John – It is sometimes easier to pinpoint origins than it is to know where we might find ourselves at present, especially if one should have come to the realization that nothing ever begins or ends at the markers we ourselves choose to identify. So I ask you (and forgive me for not having yet paid my tuition in full), where (and how) in your estimation, did this global economic meltdown begin? You yourself explained the global financial fabric in terms of bubbles and stresses due to trade inequities between countries. It would seem to me, however, that this should be considered as normal in any living membrane.
My own favorite whipping horse in all this are, of course, Frank, Dodd, Schumer and, to some extent, Obama himself via his association with ACORN. Realistically, though, I realize that this can’t explain all or even most of it. We were told that 90+% of all U.S. mortgages were in good shape to start out with and people were paying them. How then could a piddling percentage of sub primes cause so much damage – worldwide?
I understand the “worldwide” part as toxic mortgage paper being bundled along with good paper, rated triple A, and sold abroad. Was there indeed so much of it as to be able to sink economies the world over? Were other countries doing the same?
Perhaps, it is just a matter of public confidence evaporating in which case our government is at fault for scaring us by issuing needless threats and subsequently acting inconsistently or even irrationally. For years now we’ve been inundated with guilt regarding our wasteful spending habits. Perhaps it’s finally sunk in? Now, suddenly, they want us to start spending again? Give me a break! Which is it? Spend or no spend (to save the planet)?
And where is George Soros in all this? We haven’t heard a peep out of him in months. Isn’t he the one who has a history of manipulating economies (currencies) on a global scale?
Peter: Good questions: Martin Wolf of ft gives me the idea that the bubbles come from price and capital inequities in global trade or discreet markets. The Euro banks and US banks leveraged at 27 or more times assets, and then some of them depended upon housing prices climbing forever with cheap credit available for refi. Ran out of time. Panic, fear, and the collapse of commodities bubbles (commodities states such as the oil and gas states, and farming states) then pushed their markets into eclipse. Our market is a mystery. But hoarding is in. Sensibly. The central banks aim to inflate us out of the muck. Is there time?
I have stopped listening to this show and visiting this site for the most part as there really isn't anything fresh that I haven't already heard 5-10 times repeated on the blogosphere - but this is a good post and thoughtful for the most part.
I am annoyed at the neocon whininess in the tone, though, and all of the GOP whining suggests the GOP that would rather let Rome fall than see a rival get the glory in saving her (a situation that brought about Caesar). (e.g. http://www.youtube.com/watch?v=YCjPFIjMMig ).
Seriously, Republicans - do you crave power so much that you'll stand by and resist aiding our President's attempts to fix things during some of the country's most desperate hours?
On a separate note, if you haven't listened to this "This American Life" radio documentary about how this whole sub-prime mess transpired, you probably don't understand it very well. Just a hunch...
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355
You Dems set the standard for bipartisan support so high during the Bush administration that I guess we just can't live up to it, Kilroy. Can you say "Michael Moore"? Also, without any irony but just a straight answer to your question, if we fundamentally disagree with what "fixed" means, which we probably do, then yes, I would quite naturally oppose Obama, with respect to any given policy. Overall I would support him on anything I agree with. My right as an American citizen (for another year or two, anyway).
I'm not a Dem, Lou. I'm an Independent and proud of it.
I just don't want to drown while you partisans fight over how to rearrange the deck chairs.
Some things are more important than politics, believe it or not...
'On a separate note, if you haven't listened to this "This American Life" radio documentary about how this whole sub-prime mess transpired, you probably don't understand it very well. Just a hunch...'
Many of us have been watching, sometimes helplessly as this entire mess unfolded....it had nothing to do with politics, as we were concerned and realized the need to prepare for the future.
To simplify all in a "radio documentary" smacks of elitism to say the least.
If you'd care to enhance your comprehensive "study" of it all I would suggest Gerald Celente's website and numerous radio interviews regarding the "coming" fiscal crisis among other trends forecast.
Mr. Celente has been "on top of it" for some time and his books, among them TRENDS 2000 were as ominous as Paul Revere's Ride.
Kilroy said: "On a separate note, if you haven't listened to this "This American Life" radio documentary about how this whole sub-prime mess transpired, you probably don't understand it very well. Just a hunch...
Yes, well, if you think the subprime mess "started with the bankers and ended with people about to lose their homes" then you don't understand the mess any better than the producers of that tear-jerking report. That's the Democratic/victicrat explanation, which stops short of the referring to the mechanisms put in place by the Community Reinvestment Act of 1977 to control the banking industry. Any explanation that omits that as a contributing cause is specious.
Minority activists recoil in horror at the intimation that the government's attempt to increase minority home-ownership had anything to do with the mess because they believe it's a variant of "blame the victim." In some cases, the victim does have something to do with the incident. That's why tort law invented the doctrine of "contributory negligence." In this case, the mechanisms built in to the law for controlling bank operations with the goal of forcing bankers to lend to minorities who would otherwise not get a loan because they were poor credit risks is a cause of the problem. Without understanding and exposing the impact of the mechanisms in the CRA, the causes will not be adequately understood and the remedies will fail. In fact, Barney Frank and Chris Dodd, the major players in the abuse of Fannie and Freddie and of the CRA, are even now attempting to bully the banks into lending more freely to poor credit risks and they fully intend to require that in Son of TARP. Such behavior certainly makes me wonder if becoming a member of Congress is actually detrimental to the legislators' intelligence.
Well explicated, Corlyss! Any national discourse that does not include the impact of the Community Reinvestment Act, Fannie Mae, and Freddie Mac is a fatally flawed discourse, and any decisions coming out of such a discourse will be fatally flawed. The fact that Frank, Dodd, et al are still in positions of influence are an indication to me that our government officials and we as a nation do not have a grip on reality.
Kilroy said: "Some things are more important than politics, believe it or not..."
Actually, I don't think we're talking about politics. We're talking about our system of government. We're talking about whether we nationalize banks and industry. We're talking about whether we gut the private sector. We're talking about whether we destroy our Constitution or hold on to our founding principles. Both sides of the aisle have contributed to this, Republican and Democrat. But with Obama as president, the move toward socialism will likely be much more aggressive. THAT'S what we're talking about. There are those who believe that socialism is desirable if it solves all of our current problems. They seem unwilling to consider history. Even if socialism could solve our current problems, it would create other, nastier problems.
OK, well I'm a Libertarian so technically I shouldn't be defending Republicans, especially since there really is no defending them any longer.
Also, $350B + $350 B + $850 B + ..... adds up to some real expensive "deck chairs".
I'm convinced that at least 50% of this crisis was invented and manufactured by Congress and Bush with the express purpose of driving share prices down so they could nationalize at fire-sale prices. I think more's at stake here than just higher taxes.
I do not understand the Blago PR blitz. The Illinois Senate will impeach him. Blago will or has filed amotion to dismiss Fitz because of the grandstanding. Holder or the new AG will signal to the judge to grant the motion and goodbye Fitz. The only drama is to publcize that Obama and his associates have given grand jury testimony and the tapes but the media will not be interested.
I shouldn't be defending Republicans, especially since there really is no defending them any longer.
I think we can count on one hand the number of Republicans in Congress who are willing to stand on principle no matter what. I understand that many Republicans were lining up to get their picture taken with King Barry the other day. It's certainly revealing to see how few of them have the moral courage to stand when they are outnumbered, have taken a pounding in the recent elections, and still have to deal with the media distorting everything they try to do. I'm sure I'm not the only one who will remember which ones, like Lindsay Graham, are bending over backwards to help King Barry succeed in turning American into a socialist nation.