Economy UP

“I guess you live in la la land, noncon. Must be nice. Can you send me some of the happy pills you are on?”

“No pills needed, I just wake up every day.


Dude, if you're ready to swing from the shower curtain rod now, I shudder to think what you'd be like if you faced real adversity.”

“I'm middle class, so I'm hangin' tight. It's those that aren't as fortunate as I am that I am worried about, and the future generations who get to endure the horrible economic (not to mention foreign policy, though the two are incredibly intertwined) miscalculations made by the dimwits in the White House (and the Capitol) over the past eight, loooooong years.

Pull your head outta the sand and stop living in la la land. The bumpy ride is just getting rolling...”

“We as americans thought the whole world could be like us- everyone have two(cars) and Airline tickets for every week until the world ends. A house big enough to require utility bills from three different districts and yet we tell other to curtail their energy usage. Pills, who mentioned pills? I want to know more about those pills than I learned from Rush.

Bear Stearns in freefall. Tilt

BS and it's principles should be allowed to go down with the shi-. Every crooks in this country will be all over the fed from now on. impeach and shoot them if they preach.
last edited: 3/14/08 11:42:10 AM”

“From the article: "NBER is a private sector group that is considered the arbiter of U.S. business cycles."

How could that be? I thought XLax and Splurge were the ones to decide when the US was in a recession.



NonCom: If you think the loss of billions of dollars of potential US wealth and millions of US jobs is no biggie, I'd like you to face reality.
last edited: 3/14/08 11:36:41 AM”

“Rosey I think the logic is that if it's not happening to them then it's not happening at all.
They'll be living in a cardboard box before they'll admit there's anything wrong.

This way you don't have to answer any tricky questions.”

“then again it must be tricky to see anything with your face attached to a troll's groin.”

“LOL! RTVW, our politicians wasted that much money in the past hour.

Rosey: starving pygmies in Africa---don't forget about them....and all the little animals.

Be honest. Past administrations (Repubs or Dems) couldn't fix all the problems and future ones won't be able to either. Same goes for The United Nations. So you can either sit there and feel bad and talk about how bad things are and how much you worry, or you can get up and do something about it.”

“The real issue is that this particular recession has been self-inflicted by greed and a lack of regulation. Even the treasury secretary can admit that.”

“Rosey I think.......
Y2
12:37:53 PM
3/14/08


Well there ya go thinking again.....and wrong as usual. A s s-u-ming isn't one of your strong points. Or is it?”

“I realize I've given you far too much credit up to now NonC. Don't worry - it won't happen again.

How about offering some substance to what you say instead of strolling along with your hands in you pockets pretending nothing is happening?
Or maybe you can launch into some sweeping profound statement about how both sides are as bad as each other and you're a voice of reason.
last edited: 3/14/08 11:51:23 AM”

“LOL! You guys handle substance the same way you handle criticism.


some sweeping profound statement about how both sides are as bad as each other and you're a voice of reason


Ha-ha! Well if you read those statements as me tryin to sound profound, either I should work on my wording or you should work on your a s s-u-ming. Either way, why not take the time to show us, with a voice of reason, how the statement's not true?



PS: ya'all have a good weekend! (Yes, even you rosey and Y2) :P
last edited: 3/14/08 12:05:15 PM”

“To be honest NonC - I've seen you as a fairly decent guy up to now - but you've gradually seem to have bought into the crap that's destroying this place.

I know this place can be polarizing - but if you believe that I say this because you hold a differing view - well then you have some issues.”

“Ah, don't be worried about me. I'm the same old loveable guy I always was.”

“oh I'm not worried..... ohhhhh, a-s-s ..... yeah, good one.”

“well have a good weekend yourself you old #&%!$er.”

“Be honest. Past administrations (Repubs or Dems) couldn't fix all the problems and future ones won't be able to either. Same goes for The United Nations. So you can either sit there and feel bad and talk about how bad things are and how much you worry, or you can get up and do something about it.”

Strange, that's what Ron Paul has been saying and voting for years. Get rid of 80% of the governmennt and bring what government you need close enough to shoot if they get out of line.

Make the gov your slave don't be one to it.
last edited: 3/14/08 1:34:17 PM”

“Enjoy noncom...”

“

F.D.R.’s Safety Net Gets a Big Stretch

By FLOYD NORRIS

It was an old-fashioned bank run that forced Bear Stearns to turn to the government for salvation on Friday. The difference is that Bear Stearns is not a commercial bank, and is therefore not eligible for the protections those banks received 75 years ago when Franklin D. Roosevelt halted bank runs with government guarantees.

Bear was, instead, emblematic of a financial system that grew up over the last two decades, one that largely marginalized traditional banking and that enabled lenders to evade much of the regulatory framework that had also begun during the Roosevelt administration.

The new system enabled loans to be made by almost any financial institution with the money coming from the sale of increasingly complicated securities backed by the loans.

Regulators believed that the new system spread out the risk. Alan Greenspan, a former chairman of the Federal Reserve, said the system had transferred risk from banks — which he called “highly leveraged institutions” — to “stable American and international institutions.”

It turned out he was wrong. Much of the risk had remained with commercial banks, but packaged in such a way that they were required to put aside fewer reserves to protect against losses. Much of the rest of the risk ended up with financial institutions that relied on their ability to borrow at low rates whenever they needed it.

“A sizable fraction of long-term assets — assets with exposure to different forms of credit risk—ended up in vehicles financed with very short-term liabilities,” Timothy F. Geithner, the president of the Federal Reserve Bank of New York, said last week in a speech. “As is often the case during periods of rapid change, more significant concentrations of risk were present than was apparent at the time.”

That risk has come to the fore in the last several months, as several mortgage companies and smaller financial institutions have failed. This week Carlyle Capital, a highly leveraged lender formed by the Carlyle Group, a private equity fund, collapsed. It had borrowed more than $30 for every dollar of capital, and it could not meet demands from lenders that it put up more cash even after it got a $150 million loan from the Carlyle Group.

Bear Stearns, which boasts that it has never had a losing year in its 85 years, was plagued by rumors that it owned securities it could not sell and that it might be unable to borrow enough money to hold on to the securities.

In a conference call Friday, Bear’s chief executive, Alan D. Schwartz, said that as rumors spread, customers became more nervous, “to the point where a lot of people wanted to get cash out.”

At first, Bear could meet those demands, he said. “But they accelerated yesterday, especially late in the day, and as we got through the day, we recognized that at the pace things were going, there could be continued liquidity demands that would outstrip our resources.”

Overnight, the Federal Reserve and JPMorgan Chase arranged to provide the cash Bear Stearns needed. Bear could not borrow directly from the Fed because it is not a commercial bank.

The Fed had seen such problems coming, and had announced plans this week to lend money to major dealers in Treasury securities — like Bear — by taking in as collateral mortgage securities that are now hard to sell.

By coincidence, the demands on Bear Stearns came on the 75th anniversary of the day when American banks reopened after the holiday declared by President Roosevelt when he took office. He assured Americans that only safe banks were being allowed to reopen, although there was no way he could really be sure.

The rescue of Bear is not permanent — the loans are for only a month — and there is an expectation that authorities will seek to arrange for Bear to be acquired, perhaps at a low price, or that it will be broken up and sold to more than one buyer.

Such an outcome could avoid systemic risk while leaving Bear’s top executives without jobs and perhaps deflecting criticism that they had not had to face the results of their mistakes. Bear stock fell 47 percent on Friday; all of the decline came after the rescue was announced.

Deposit insurance largely ended runs at commercial banks, because depositors with less than $100,000 in a bank believed they did not need to worry even if they heard rumors of trouble.

But when investors do not have such confidence — as in Britain last year, where deposit insurance covered only the first £2,000, or about $4,000 — the rational response is to grab the money and ask questions later. That was one reason Northern Rock, a British bank, saw its depositors flee and in the end was taken over by the government.

Mr. Schwartz, Bear’s chief, says his firm remains solvent. But such assurances are seldom credited during panics. As Walter Bagehot, the British financial journalist, wrote in “Lombard Street,” a 19th-century book on the monetary system, “Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.”

At the bottom of the current crisis is a distrust of many financial institutions and securities that goes beyond Bear Stearns.

“This is a credit problem, not a liquidity problem,” said William L. Silber, a finance professor at New York University who has written about the 1933 crisis.

“The root question is,” he said, “Will mortgage borrowers be able to repay their debts? That risk and that uncertainty is still there, and that has brought into question all sorts of credit exposure.” He argues that because that question cannot be resolved soon, in the end the Treasury will have to do as it did in 1933, and issue broad guarantees.

Whether or not that happens, the government may have to revise its regulatory system, which, as Mr. Geithner noted, has “evolved into a very complex and uneven framework, with substantial opportunities for arbitrage, large gaps in coverage, significant inefficiencies and large differences in the degree of oversight and restraint upon institutions that engage in very similar economic activities.”

He called for “a more uniform set of rules applied evenly across entities involved in similar functions,” and added that “institutions that are banks, or are built around banks, with special access to the safety net, need to be subject to a stronger form of consolidated supervision than our current framework provides.”

Friday’s Fed move shows that investment banks have that “special access to the safety net,” a fact that may lead to more regulation.

http://www.nytimes.com/2008/03/15/business/15regulate.html?_r=1&th=&emc=th&pagewanted=print&oref=slogin”

“

Republicans and “free market” zealots bring death to America

By Paul Craig Roberts

Crude oil for April delivery hit $110 per barrel. The US dollar fell to a new low against the Euro. It now takes $1.55 to purchase one Euro.

These new highs against the dollar are the ongoing story of the collapse of the US dollar as world reserve currency and corresponding collapse of American power.

Each new decision from the insane Bush Regime pushes the dollar a little further along to oblivion. The same Fed announcement that boosted the stock market on March 11 sent the dollar reeling and the price of oil up. The Fed’s announcement that it and other central banks are going to deal with the derivative crisis by monetizing $200 billion of the troubled instruments signaled more dollar inflation.

Of course, something needed to be done to forestall an implosion of the financial system, but a less costly alternative was at hand. The mark-to-market rule could have been suspended in order to halt the forced sale and write down of assets and to provide time in which to sort out derivative values, which are higher than the fire sale prices.

More pressure on the dollar resulted from the decision to award the European company, Airbus, a $40 billion contract that could reach $100 billion to build US Air Force tankers. In simple terms, that means another $40 to $100 billion added to the US trade deficit, and a loss of $40 to $100 billion in US Gross Domestic Product and associated jobs.

Of course, the Bush Regime had to award the contract to Europe as a payoff for Europe’s support of the Bush Regime’s wars of aggression in the Middle East. Europe is not going to provide Bush with diplomatic cover for his wars and NATO troops for his war in Afghanistan without a payoff.

Here is the picture: The US economy, which has been kept alive by enormous debt expansion that has overreached its limit, is falling into recession. The traditional way out by expanding the supply of money and credit is blocked by the impaired banking system, the levels of consumer debt, the collapsing value of the US dollar, and rising inflation.

The Bush Regime is attempting to bypass the stalled credit expansion by sending Americans $600 checks, money that will mainly be used to reduce existing credit card debt and not to fund new consumption.

The US is dependent on foreigners not only for energy but also for manufactured goods and advanced technology products. The US is dependent on foreigners to finance our annual consumption of $800 billion more than the US produces. The US is dependent on foreigners to finance its red ink wars, and the US government’s budget deficit is now expanding as tax revenues decline with the declining economy.

The bottom line: US power is enfeebled. US power depends on the willingness of foreigners to finance our wars and on the willingness of foreigners to continue to accumulate depreciating dollar assets.

The US cannot close its trade deficit. Oil prices are rising, and offshore production of goods and services for US markets results in a dollar-for-dollar increase in imports, while reducing the supply of domestic goods available for export.

The US cannot close its budget deficit while it is squandering vast sums on wars that serve no US purpose, handing out $150 billion in red ink rebates, and falling into recession.

US living standards, which have been stagnant for years, will plummet once the dollar decline forces China off the dollar peg. So far prices of the Chinese made goods on Wal-Mart shelves have not risen, because the Chinese currency, pegged to the dollar, falls in value with the dollar. In a word, tottering US living standards are being supported by China’s willingness to subsidize US consumption by keeping its currency grossly undervalued.

The US is overextended economically and militarily, just as was Great Britain with the fall of France in the opening days of World War II. The British had the Americans to bail them out. After the chewing gum and bailing wire patch-ups are exhausted, who is going to bail us out?

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal.

http://onlinejournal.com/artman/publish/printer_3064.shtml”

“Five years after the biggest mistake in the history of this country.Thanks V.”

“Can't you just visualize vile, y2.0, tiltypoo, and rosey, holding hands, and dancing around in joy at what they think is the downfall of evil capitalism?
LOL”

“I visualize others gathered around a bible opened to Revelations under the high roof of an Exxon station with their SUVs idling.”

“Even gold is getting sucked down.”

“What did the Scrub just say? They believe their own lies. You, as a tax payer, own a failed Bank- Brokerage to fit in with your business failure President.”

“I just still giggle and the total mental disconnect of the libbies when they say "tax cuts will not work" yet they voted (and remember guys as we learned in High School Civics..the CONGRESS passes the laws) to give people some of their own money ($600) back to STIMULATE the economy.....”

“Libby King Poor People Helper, you had a solid control of congress by your trickle down group and look at the result. Yes these dems are just as bad as your Reps were, so what the hell are you talking about? Tax cuts work when you live on the credit card girlfriend, but when it's maxed, your on the road to nowhere.”

“

WASHINGTON - President Bush, trying to calm turmoil in financial markets, said Monday that his administration is "on top of the situation" in dealing with the slumping economy.

"One thing is for certain, we're in challenging times," the president said after meeting with Treasury Secretary Henry Paulson and other senior economic advisers. "But another thing is for certain: We've taken strong, decisive action."

Jeeze, I feel so assured...”

“ring the register and hide it all under your mattresses....”

“The Decider; Negative tax rates for the rich'll get that trickledown pump re-primed or sub-primed, hell, I don't know, as long as I don't have to look lik an idiot on prime time.”

“How we doing here? Still in denial?”

“The 'Recession' Is a Media Myth

By John R. Lott, Jr.

During the 2000 election, with Bill Clinton as president, the economy was
viewed through rose-colored glasses. According to polls, voters didn’t
realize that the country was in a recession. Although the economy started
shrinking in July 2000, most Americans through the entire year thought that
the economy was fine.

But over the last half-year, the media and politicians have said we were in
a recession even while the economy was still growing.

Gas prices are going up. The economy is slowing. Talk of recession is
seemingly everywhere. While the majority of people rate their personal
finances positively, consumer confidence in the economy has plunged to a
16-year low, well below what it was during the last year of the Clinton
administration when we were in a recession.

A Nexis search on news stories during the three-month period from July 2000
through September 2000 using the keywords “economy recession US” produces
1,388. By contrast, the same search over just the last month finds 3,166.
Or, even more telling, take the three months from July through September
last year, when the GDP was growing at a phenomenal 4.9 percent. The same
type of Google search shows 2,475 news stories.

Over 78 percent more negative news stories discussed a recession when the
economy under a Republican was soaring than occurred under a Democrat when
the economy was shrinking.

A little perspective on the economy would be helpful. The average
unemployment rate during President Clinton was 5.2 percent. The average
under President George W. Bush is just slightly below 5.2. The current
unemployment rate is4.8 percent, almost half a percentage point lower than
these averages.

The average inflation rate under Clinton was 2.6 percent, under Bush it is
2.7 percent. Indeed, one has to go back to the Kennedy administration to
find a lower average rate. True the inflation rate over the last year has
gone up to 4 percent, but that is still lower than the average inflation
rate under all the presidents from Nixon through Bush’s father.

Gas prices are indeed up 33 percent over the last year, but to get an
average of 4 percent means that lots of other prices must have stayed the
same or gone down. On other fronts, seasonally adjusted civilian employment
is 650,000 people greater than it was a year ago. Personal income grew at a
strong half of one percent in just February.

Despite all that, this last week, Barack Obama proclaimed “As most experts
know, our economy is in a recession.” Hillary Clinton made similar
staements last fall. Yet, as any economist knows, a recession is two
consecutive quarters of negative growth, and we haven’t even had one single
quarter of negative growth reported. The economy slowed down significantly
during the end of last year, but that was after a sizzling annual GDP
growth rate of 4.9 percent in the third quarter.

Housing has obviously been a big drag on the economy, but many other
sectors of the economy, such as exports, have been doing well, some
extremely well. For example, aerospace exports increased by over 13 percent
last year.

The media’s focus on the negative side of everything surely helps explain
people’s pessimism. In a recent interview Fox’s Neil Cavuto claimed this
bias “is all part of the media’s plan to get a Democrat in the White
House.”

Indeed, research has indicated that media bias is real. Kevin Hassett and I
looked at 12,620 newspaper and wire service headlines from 1985 through
2004 for stories on the release of official government releasing numbers on
the unemployment rate, number of people employed, gross domestic product
(GDP), retail sales, and durable goods.

Even after accounting for how well the economy was doing (e.g., what the
unemployment rate was and whether it was going up or down), there was still
a big difference in how positive or negative the headlines were. Democratic
presidents got about 15 percent more positive headlines than Republicans
for the same economic news.

Yet, the hysteria created by this coverage can have another cost. It
creates pressure for government to “do something,” even if that rush to do
something actually ends up hurting the economy. For example, Obama's
promises last week “to amend our bankruptcy laws so families aren't forced
to stick to the terms of a home loan” will only further drive down the
value of mortgage-backed securities, making any unstable financial
institutions that hold them even more likely to fail. In the long term, who
is going to want to loan money when the contract can be rewritten at a
later date?

The news media have generated a lot of fear. Ben Stein has a point when he
says “The actual economic conditions are not that bad. I think if we have a
recession, if we have a serious recession, a great deal will lie at the
media’s feet.” Hopefully a little perspective will enter the picture before
even more harm is done.”

“Growth of weeds in the garden is growth.”

“One man's weed is another man's eden. If you think America is a weed garden, that's your unfortunate perception.”

“Chairman of the Fed joins 'MSM'

"It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke said in testimony prepared for the Joint Economic Committee of Congress.
"Clearly, the U.S. economy is going through a very difficult period," he said.”

“Still in denial? - appears so!”

“The fertilizer type being used on the trickle down garden only feeds weeds. Couldn't reach the hole in the sand, so...

We could be in the position to lower cap gains and dividend rates back down to 15%, but going onward to zero fed funds and discount is the way back to 2002, where the whole problem began.

It's obvious you didn't listen to Ron Pauls comments to Ben bernanke an hour ago. Reality is unfortunate to those that have no idea of what it is. Koolade's ready.”

“Ever since Bush took office the MSM, and much of the financial world, has been proclaiming an emminent recession.

actual last recession - Clinton was in office

sale - Ron Paul has been complaining about the economy for years. What does one more speech make a difference?”

“That he is the only one telling the truth, is disturbing. When the taxpayer is held hostage by the likes of the JP Morgan and Bear Stearns under threat of a bankruptcy
that's too big to happen, someone has to close the Fed printing presses and say NO. The weeds are the garden and the food is in the still.”

“Last recession began March 2001 and ended November 2001.

Look it up.

We may now be in Bush's second recession.”

“Think it's bad now? Just wait until Obama gets in there and REALLY starts spending. Think Bush spent like a drunken sailor? Obama will be like Henry the 8th.”

“The date is debated. Let's pretend ke March 2001 is right. It couldn't have been from anything Bush did in 5 weeks. The economy was tanking prior to his office.”

“The date is not debated by those in the reality-based community: http://www.nber.org/cycles/november2001/


Wasn't John R. Lott, Jr. that guy who got caught posing online as Mary Rosh in order to praise his own "research"? http://www.whoismaryrosh.com/

Birds of a feather...
last edited: 4/03/08 5:01:20 AM”

“It is debated. The left and MSM won't go there, I admit.

And again, either way, there is no way Bush caused it in 5 weeks. You can't deny that. Anything a president would do would take a year just to start to take affect.

Anyways - here are some fact that NBER left out of it's own claims - http://www.nationalreview.com/nrof_luskin/luskin200405050850.asp”

“Last recession began March 2001 and ended November 2001.

Look it up.

We may now be in Bush's second recession.”
VioLiN

This is widely referred to as "Clinton's recession". Look it up.”

“This is widely referred to as "Clinton's recession". Look it up.

Clinton should have a recession to go with his 9/11.”

“8 years of reducing intel .... yeah.”

“it's all kleeeeenton's fault.

Look it up.”

“Ok, so once Bush is out of office Tilt isn't allowed to blame anything that happens from that day forward on him or his policies.

I think I like this plan. Thanks tilt”

“That's funny and all, but it's still true.”