Rolling US Economy Into The Shitbin Thread

not that legislators shouldn't be cautious about all this, but it's fun to replace "stimulus" and its synonyms with "iraq" and pretend like it's 2002-03 and that they'd been as circumspect then.
interesting discussion here on cyclists versus structuralists here ~
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/30/AR2009013003116.html

we're fucked

http://www.nakedcapitalism.com/2009/02/bad-bank-assets-proposal-worse-than-you.html

i actually agree with you re this geithner proposal, dan. it's a total muddle -- it doesn't satisfy anyone (not the folks who just want the troubled banks to eat their losses already and let the chips fall where they will, and not the folks who just want to nationalize the troubled banks and be done with it already) and it may very well prolong this whole fucking mess if these "guaranteed assets" go tits up AND gum up the federal fisc with even more shitty worthless assets. even the "sweetener" of limiting executive compensation appears to be lacking in substance (e.g., what about stock options? funds stashed in retirement plans?) it actually makes the "bad bank" idea look GOOD.

i don't want to get all morbs here, and my opinion may change if/when more details become available. but if this is "bipartisanship," it's for the birds.

not to mention that debt backstopping -- which is what was done to bail out Citigroup and Bank of America, and which appears to be what the debt guarantees are -- haven't WORKED. investors are even LESS willing to buy their securities after they got the fed money.

despite the reference in that post to the IMF study, the empirical data for what we want to do is scant. We are getting ready to throw MASSIVE amounts of money at a problem that a) we barely understand, b) we have no historical models to adequately base our actions and c) is probably bigger/more complex than we all imagine. The poster is a little hard on the Obama administration (given the rock/hard place situation) but acting on impulse with almost no due diligence for the banking situation and overall stimulus package continues to frighten me. As usual, we're going to get what we pay for but in this case, the whole world will probably suffer.

like pigs at the trough. Or in this case, the teet.

http://online.wsj.com/article/SB123369271403544637.html?mod=todays_us_page_one

U.S. Rep. Marcy Kaptur (D., Toledo) is advocating homeowners threatened with foreclosure exercise squatter's rights in trying to stave off the loss of their house.

"I'm saying to them possession is 99 percent of the law; you stay in your house," Miss Kaptur said yesterday, continuing a crusade she started several weeks ago in Congress and CNN picked up Thursday night.

She said she believes that many so-called predatory and subprime loans -- those made to borrowers who did not qualify for a conventional mortgage -- may have been illegal.

She urged homeowners not to panic and leave their home just because they receive a foreclosure notice from their lender, and she said they should demand that the mortgage-holder produce a mortgage audit.

"I say to the American people, you be squatters in your own homes. Don't you leave," she said during a speech in Congress earlier this month.

i don't want to get all morbs here...but if this is "bipartisanship," it's for the birds.

But I just added a wing to the treehouse!

Don, the private economy just got through misinvesting multiple trillions of dollars in soggy tissue paper. They stuffed so much good money into rat holes that for the foreseeable future the entire globe is going to be starving for the cash to pay for important, necessary obligations and debts - the ones that put food on your table, clothes on your back and electricity in your house.

I agree it would be nice to get good value for the dollar as we post huge new national debts, but the worse alternative would be to let the real economy starve and bring a few hundred million more people to beggary in the process.

It can't be repeated too often - the private economy, the titans of business, the wizards of finance, the MBAs and people in power suits, the CEOs and CFOs fucked us blue. They screwed up to the tune of almost killing the whole economy.

Who you going to turn to now? The gov, bad as it may be, is at least partly accountable to you. You seen any titans of industry in breadlines lately? Can you vote them out of office?

turn to harry markopolous, for starters. the hearings on the sec's madoff-related shenanigans is full of relevant insights about how we got to this point. for dealing with the privileged boy's club for so long, dude should get a medal and a high-ranking financial oversight post

"welcome to 2009"
http://www.sprott.com/pdf/marketsataglance/MAAG.pdf

Just fingering the yahoos and yelping at them is something a lot of people can do. If Harry Markopoulos can pump a trillion dollars into the economy in the next 10 months, or give people an alternative way to honor their contracts and debts that does not involve using money, then I would turn to him to get us out of this mess.

I got an email from a good friend at a hedge fund last week. He's a *very* moderate guy, and he had this to say:

"The one thing that I disagree on is that for all the talk of making Tarp II diff from Tarp I, I don't really see it happening. An aggregator bank still just takes bad assets from a bank in exchange for capital. If you pay market, the banks will be insolvent, so they won't participate. If you pay above market, you're basically just injecting capital in to the banks, which is what they did in Tarp I. Why are they scared of nationalizing? Citi is an insolvent bank - wipe the equity, take the company, remove the bad assets, put the remaining good company back in to the public markets, repeat for the next insolvent bank. If they try to let a Citi (or maybe evan a BofA) earn their way out of this we will end up with huge parts of the banking system in zombie mode, a la Japan. That would be very bad and will only prolong the pain."

http://www.thenation.com/blogs/jstreet/405216/will_geithner_and_summers_destroy_the_us_economy?

http://www.thenation.com/images/people/christopher_hayes.jpg

love that dude

Washington is a place with its own distinctive folkways, characteristics and worldviews. Herein we seek understanding.

There are moderate guys at hedge funds? (Honest question, I thought they were all 'screw the rules, we're special!' people.)

There are moderate guys at hedge funds? (Honest question, I thought they were all 'screw the rules, we're special!' people.)

you gotta pay the bills, man.

and my earlier criticism of TARP II still stands -- though whether we could've expected better at this juncture is a legitimate topic for debate IMHO.

Netflix CEO has the #1 priority right -- tax the rich:

Please Raise My Taxes

President Obama should celebrate our success, rather than trying to shame us or cap our pay. But he should also take half of our huge earnings in taxes, instead of the current one-third.

Then, the next time a chief executive earns an eye-popping amount of money, we can cheer that half of it is going to pay for our soldiers, schools and security. Higher taxes on huge pay days can finance opportunity for the next generation of Americans....

Of course, it’s galling when a chief executive fails and is still handsomely rewarded. But with the concept of “tax, not shame,” a shocking $20 million severance package would generate $10 million for the government. That’s a far better solution than what we have today, not least because it works with the market rather than against it.

Another advantage is that it would also cover the sometimes huge earnings of hedge fund managers, star athletes, stunning movie stars, venture capitalists and the chief executives of private companies. Surely there is no reason to focus only on executives at publicly traded companies.

warren buffett's been saying the same thing for decades ... and HE has president obama's ear, to boot.

former g n' r bassist has the #2 priority right --

http://www.playboy.com/blog/2009/02/appetite-for-investment-duffonomics-1.html

I have never been keen on executives getting golden parachutes; I’m more apt to give them a golden shower.

(adjusts crystal ball, peers at it myopically, clears throat)

Now that GM and Chrysler are on life-support and the Fed Funds rate is roughly 0.13% and unemployment is racing up at a zippy pace and US state governments are announcing huge revenue shortfalls and Citibank and Chase are basket cases and Wall Street has handed out its 18 billion in bonuses and the Republicans are comically slapping their heads, hooting and gesticulating at Obama for wanting to spend money fixing things, I thought it might be interesting to predict the Next Big Thing for the economy. Just for funsies.

I'm thinking the news media will soon be earnestly discussing the problem of "zombie banks" in a big way. And both small and large retailers will be closing up shop in droves, leaving lots of empty storefronts and big boxes to litter the landscape, naturally adding fuel to the unemployment wildfire.

By April (May at the latest) there will be articles on how tourism is flatlined and the airlines are backing their way into repeat bankruptcy. Someone will notice that Las Vegas has developed a bad limp and a worrisome cough. The stock market will enter a second capitulation and DJIA 8000 will no longer be the floor, but a happy memory.

Easiest prediction: the Republicans will blame Obama and demand huge tax cuts.

http://timeswampland.files.wordpress.com/2009/02/joblosses26091.gif

(if you're squinting, the blue line is the 1990 recession, the red line is 2001, and the green line is the jobs already lost in the last 13 months.)

we gonna die

yikes! I think I'll stick to my wine, 30-Rock & sweet, sweet denial.

i guess i'll keep pretending i like my job

^^^^^^^^^^^^^^^^^^^

should just be in denial about the whole thing but it's hard. :-(

don't panic

There's always scrap metal theft to fall back on.

And the life of the roving vagabond is a bit unsung, I feel.

just interviewed w/ a place that takes incoming calls from bankrupt ppl who need attorneys

remember to take your last vacations for a decade this summer

IBM Offers to Send Laid-Off Staff to Other Countries
http://news.slashdot.org/article.pl?sid=09/02/06/2010241

TheAmit writes to tell us that many recently laid off IBM employees have been offered jobs if they will only move somewhere it is cheap to employ them. IBM's new Project Match program offers some financial assistance for moving and immigration help for visas.

"However, the move has not gone well with the IBM staff union. Slamming the offer, a union spokesperson said that not only were jobs being shipped overseas, but Big Blue was trying to export the people for peanuts too. He added that at a time of rising unemployment IBM should be looking to keep both the work and the workers in the United States. "
Posted by ScuttleMonkey

Of course, IBM and many companies like them would remain profitable without doing this, just not as profitable as they would like.

I was reading the comments on the IBM piece at Slashdot and thinking "Is this place full of corporate apologists or something? WTF" and I got to this one and now it all makes sense:

by Daishiman (698845) on Friday February 06, @10:04PM (#26761227)

Honestly, having worked several years in outsourcing at IBM, our American customers were as full of shit as we were.
American IT workers have a sense of entitlement where they believe that the quality of their work is inherently superior simply because of their origin. Truth is, there's a lot of brilliant minds in the States, but like most places it is full of mediocre people.

i'm trying my best to stick fingers in my ears and sing ladeeda. instead my fingers keep going for my eyes.

(if you're squinting, the blue line is the 1990 recession, the red line is 2001, and the green line is the jobs already lost in the last 13 months.)

― paper plans (tipsy mothra), Saturday, February 7, 2009 12:13 AM (Yesterday) Bookmark

Incorrect, and misleading. The green line is the RATE of job losses per month. What the graph shows is that we are shedding jobs much faster than we did during the other recessions and that the rate is still accelerating.

Well that's not at all comforting. Thanks.

The Dow Jones industrial average dropped 381.99 points points, or 4.6 percent, to close at 7,888.88. The Dow had fallen as much as 420 points in the last half hour of trading.

The broader Standard & Poor’s 500-stock index fell 4.9 percent or 42.73 points, to 827.16, its worst performance since a broad sell-off on Inauguration Day.

Despite the size and scope of the Obama administration’s plans, investors said Mr. Geithner’s proposal raised more questions than it answered. The way out of the financial crisis, analysts said, looked as murky as ever.

“We’re not impressed, and I don’t think the market’s impressed either,” said Ryan Larson, head equity trader at Voyageur Asset Management. “It’s clear the administration is still trying to work on something concrete. I think the market sensed that, too.”

http://www.piney.com/MolechFlame.jpg

YES. THE MARKET SENSES IT.

(xp) No, I'm not going to waste bandwidth on why I'm disgusted w/ a protégé of Screaming Lobster of Bosnia's treasury secretary signing up. And I'm not commenting on Team Hope's results til the 100 days are up. Ta ta!

It's hard to spend wise and spend fast

I love days when wall street seems to operate like a bitchy little girl. I'd be buying stocks today if I had any money.

yeah, the market is a technical analyst's (i.e., a day trader's) wet dream and a fundamental analyst's worst nightmare.

to correct the above: the way the market has been BEHAVING lately is a technical analyst's ...

yeah not that I'm an expert / want anything to do with the stock market, but lately all of these "wall street is mad about something and gonna prove a point!!!" days always seem to lead to a "oh shit what did I do yesterday" bounce the next day.

I suppose I shouldn't be surprised but

http://www.dispatchpolitics.com/live/content/local_news/stories/2009/02/10/copy/caproos.html?adsec=politics&sid=101