Tuesday, July 15, 2008

The Stupid Economy

I heard myself tell someone today that I will be glad when the depression comes so I won't have to listen to all of the loud construction booms that have been in my neighborhood for the last several years.

I don't really mean that I guess.

But it is true. I can barely get to me house anymore. All of the streets are torn up it seems. The ones that are open have flag men on them. My car is always coated with a thin curtain of dust and the water mains in the area have been broken into so many times that I wouldn't think of drinking it.

A bad economy means I can drive downtown in 3 or 4 minutes.

Or I can ride to work on my bike without placing my life in peril.

It means that my property valuations go down.

It means that I can get into a restaurant on Saturday night.

A bad economy allows me to rent a car in Midland for next to nothing.

With a crappy economy, folks are generally happy to see you

when you walk in the door.

And you don't have put up with nouveau rich buttholes.

On the other side of things, a lot of folks get hurt. Bad hurt.

They lose their pensions, their jobs, their homes and their lives.

Here's part of a piece sent in by a friend and reader that makes you wonder if the wheels really are about to fall off:

The Financial Tsunami—The Next Big Wave is Breaking

By F. William Engdahl
15 July 2008

The announcement by US Treasury Secretary Henry Paulson together with Federal Reserve chief Bernanke, that the US Government will bailout the two largest guarantors of housing mortgage debt—the Fannie Mae and Freddie Mac—far from calming financial markets, has confirmed what we have said repeatedly in this space: The Financial Tsunami which began in August 2007 in the relatively small “sub-prime” high risk US mortgage securitization market, far from being over, is only gathering momentum.

As with the Tsunami which devastated Asia in wave after terrifying wave in December 2004, the financial Tsunami we are witnessing is a low-amplitude, long-wave phenomenon of trillions of dollars of financial securities being unwound, defaulted on, dumped on the market.

But the scale of the latest wave to hit, the collapse of confidence in the two Government-Sponsored Entities, Freddie Mac and Fannie Mae, is a harbinger of worse to come in what will be the most devastating financial and economic catastrophe in United States history. The impact will be felt globally.

The Royal Bank of Scotland, one of the largest financial institutions in the EU has warned its clients “A very nasty period is soon to be upon us—be prepared.” They expect the S&P-500 index of US stocks, one of the broadest stock indices in Wall Street used by hedge funds, banks, pension funds could lose almost 23% by September as in their term, “all the chickens come home to roost” from the excesses of the US-led securitization revolution that took hold after the dot.com bubble burst and Greenspan lowered US interest rates to levels not sustained since the 1930’s Great Depression. "

Now, understand that this grim assessment comes from a "buy Gold site" called Le Metropole

So these folks definitely have an angle. But this Fannie Mae/ Freddy Mac deal is a really big deal. Engdahl goes on:

"On July 14, symbolically the anniversary of Bastille Day, US Treasury Secretary Paulson, former chairman of the powerful Wall Street investment bank Goldman Sachs, stood on the steps of the US Treasury building in Washington, a clear attempt to add psychological gravitas, and announced that the Bush Administration would submit a bill proposal to Congress to make taxpayer guarantee of Freddie Mac and Fannie Mae explicit. In effect, in the present crisis it will mean nationalization of the $6 trillion agencies."

Uh, seems like bad timing to me. Bastille Day was not such a good day for folks with money as I recall.

Earlier today, as Mr POTUS talked to his court of stenographers, I couldn't help but think about the whole concept that we all accept as gospel. That the economy must be good. If its not good, we look for reasons it isn't. And we demand that this mad consumptive binge to destroy our mother and ultimately ourselves be restored immediately.

It never occurs to us ask the simple question:

Why do we allow ourselves to be controlled by this sillyness.

Everyone is in a trance it seems.

Investors this, investors that, markets were jittery, let's stabilyze Freddy and Fanny and boost market confidence.

We live in a capitalist trance.

Where we privatize profits

and socialize losses.

Where our politicians and talking heads repeat the mantra

"It's the Economy stupid".

When, in fact, it's a stupid Economy,

And no one seems to be the wiser.

Like the Queen said,

"Let them eat cake." (watch this)

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Anonymous Anonymous said...


For me to watch a 47 minute video it has to really grab my attention. This link http://tinyurl.com/6x6b7k about the creation of our money supply did just that. I watched every minute of it and I am going to watch it again.


6:08 PM  
Blogger Charlie Loving said...

Notes from Deer Corn on the Nueches River head waters. Today the Propane truck came to refill my tank. It cost me $300, which is about 45% over the last time which was six months ago. The driver an ex-Marine said people are buying less gas (propane).

"Them people with those gas BBQ pits are going back to using wood to cook their meat, they ain't even buying charcoal.
Things are getting real bad. Juan's taco stand went out of business and that BBQ place on 337 closed. Even with all the motorcycle riders the economy is gone to hell."

And the RV parks around here are less than full. The river levels have negated swimming and tubing and those RV's that get 4 MPG are staying home.

The people here haven't a clue what the stocks mean to them all they know is that things are bad and getting badder. The price of Deer Corn is up to $9.00 from $4.50 the last time I looked. The ranchers and farmers are in a devil of a mess with the energy prices. My trucker friends are hurting badly. As Bubba at the Valero said, "People ain't filling up and they ain't buying ice cream."

5:47 AM  
Anonymous Anonymous said...

Or I can ride to work on my bike without placing my life in peril.

Yeah, like you'll have a job. Or a bike.

11:58 AM  

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