This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.
The Hollow Men
T.S. Eliot
Let me open up today with stories about the economic decline that is already beginning to decimate the lives of so many Americans. I have been writing about this every day and the response has hardly been deafening. Political gossip and minutia seems to have a greater grip on the progressive imagination than tracking the financial collapse. This is a media reform issue too because the coverage remains so sporadic and confusing. The NY Times discovered today as its lead story that the subprime mortgages mess is just one part of a much larger story. That story was reported MONTHS ago in many business publications. I have been saying it for two years. Maybe I am in my own bubble, but it is one that I want to burst.
Michael Moore made his first movie about General Motors. Read about what’s happened to that company and its workers because it went from being an auto manufacturer to a lender. Thousand of workers are being axed.
We are watching the “fall of America,” folks, a slow-motion process that is escalating. I can’t do it justice but I will repeat a quote from last December by a man I am not a big fan of but who nailed it in part as reported just before Xmas on itulip.com
THE FAILURE
First there is the credit bubble. Then there is the credit bubble collapse. Then there is the political haggling as Rome burns. Then there is the Depression. But former Treasury Secretary Lawrence Summers has a plan.He spelled out the problems facing the U.S. economy and proposed solutions in a speech “Risks of Recession, Prospects for Policy” yesterday at The Brookings Institution in Washington, D.C. In summary:
“I am speaking here today because I believe that our current economic situation requires a comprehensive program of measures to contain the fallout from problems in the financial and housing sectors and to assure sufficient policy support for economic growth over the next several years. Perhaps because of a failure to appreciate the gravity of our current situation and the problems our political process has in responding quickly and collaboratively to emergent threats, such a comprehensive program is neither in place nor in immediate prospect.”
NO SUCH PLAN EXISTS READERS—AND NONE OF OUR POLITICAL CANDIDATES IS OFFERING ONE….Here’s the eco
· news on yr dissector’s wire:
AP: WASHINGTON - The federal budget deficit is running at a pace that is more than double last year’s imbalance through the first four months of the budget year.
In its monthly review of the government’s finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals $87.7 billion so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007. The new budget year started last Oct. 1.
HOW GENEROUS
NYT: Lenders Offer Plan to Head Off Foreclosures
A group of major mortgage lenders will allow some homeowners facing foreclosure to delay losing their homes for 30 days.
ANALYSIS IN LA TIMES: “Conventional wisdom holds that Wall Street is driven by two emotions: greed and fear. Today we see the second of those — the fear factor — on public display, in the form of the latest effort to forestall foreclosures.
(Headline for those who missed it: “The Bush administration, trying to deal with a worsening housing slump, announced a new initiative today aimed at helping homeowners about to lose their homes. For qualified homeowners, it will put the foreclosure process on hold for 30 days.”)
Banks and lenders are afraid — afraid of a deepening housing crisis, afraid of the political blowback, afraid of writing down more bad loans, and very, very afraid of being stuck owning foreclosed houses that are declining in value every day. The knife is still falling; banks and lenders do not want to catch it……CREDIT CRISIS IS NO LONGER JUST A SUBPRIME PROBLEMFOX BUSINESS NEWS REPORTS: PANIC, PANIC, PANIC
The risk of complete stock market meltdown, a crippling 5000 point nose-dive, is becoming increasingly likely.
The wild swings on Wall Street are becoming increasingly wild and more frequent. The fallout from the sub- prime crisis and slowdown in the economy increase the chances of a genuine economic nightmare.
To prevent the dominos from crashing the Federal Reserve has slashed interest rates by 1.25 percent in just the past two weeks. This means that “Real Interest Rates” are barely positive now. If they go any lower, they’ll be below official inflation rates.
“After inflation is considered, the bank will pay you to borrow its money, instead of the other way around,” says James DiGeorgia, editor of the Gold and Energy Advisor (www.goldandenergyadvisor.com). “Central banks like the Fed don’t do this unless they’re desperate — in panic mode.”
The latest reason for the Fed to panic is that bond insurers are in serious trouble.
“Bond insurers are capable of triggering a chain-reaction meltdown on Wall Street that spreads worldwide,” explains DiGeorgia. “A few years ago, bond insurers like MBIA and Ambac had quiet but profitable businesses. They insured bonds issued by municipalities, state governments, and other large organizations. Since these issuers rarely defaulted, the bond insurers rarely paid out on their policies. But the insurer executives got greedy. So they started insuring riskier bonds — such as mortgage-backed bonds, including subprime debt.”
These bonds are looking increasing fragile. Last Wednesday, Standard & Poor’s downgraded or took negative rating action against 8,000 mortgage bonds and CDOs, worth $534 billion. If only half of those go into default, it will mean $267 billion in losses. This is over two and a half times worse than anything in this crisis thus far.
And, according to estimates, if one or more of the insurers gets downgraded, Wall Street will face an estimated $70 billion in more losses.
“The risk of complete stock market meltdown, a crippling 5000 point nose-dive, is becoming increasingly likely. This would send gold to $2,500, and may even cause sudden 1929-type runs on banks and financial institutions across the country,” cautions DiGeorgia.
The fact that Fox Business Channel is reporting this–given its predeliction to offer “positive” business news is a sign of how serious things are….Billionarire Investor Warren Buffet Offered To Rescue Wall Street From This Crisis By Guaranteeing The Bonds–But At A Stiff Price; Many Fear His Plan Won’t Work; Government Asleep?
WALL ST EXAMINER: PONZI SCHEMES ABOUND'
Michael Moore made his first movie about General Motors. Read about what’s happened to that company and its workers because it went from being an auto manufacturer to a lender. Thousand of workers are being axed.
We are watching the “fall of America,” folks, a slow-motion process that is escalating. I can’t do it justice but I will repeat a quote from last December by a man I am not a big fan of but who nailed it in part as reported just before Xmas on itulip.com
THE FAILURE
First there is the credit bubble. Then there is the credit bubble collapse. Then there is the political haggling as Rome burns. Then there is the Depression. But former Treasury Secretary Lawrence Summers has a plan.He spelled out the problems facing the U.S. economy and proposed solutions in a speech “Risks of Recession, Prospects for Policy” yesterday at The Brookings Institution in Washington, D.C. In summary:
“I am speaking here today because I believe that our current economic situation requires a comprehensive program of measures to contain the fallout from problems in the financial and housing sectors and to assure sufficient policy support for economic growth over the next several years. Perhaps because of a failure to appreciate the gravity of our current situation and the problems our political process has in responding quickly and collaboratively to emergent threats, such a comprehensive program is neither in place nor in immediate prospect.”
NO SUCH PLAN EXISTS READERS—AND NONE OF OUR POLITICAL CANDIDATES IS OFFERING ONE….Here’s the eco
· news on yr dissector’s wire:
AP: WASHINGTON - The federal budget deficit is running at a pace that is more than double last year’s imbalance through the first four months of the budget year.
In its monthly review of the government’s finances, the Treasury Department said Tuesday that the budget was in surplus in January, but totals $87.7 billion so far this budget year, double the $42.2 billion imbalance recorded during the same period in 2007. The new budget year started last Oct. 1.
HOW GENEROUS
NYT: Lenders Offer Plan to Head Off Foreclosures
A group of major mortgage lenders will allow some homeowners facing foreclosure to delay losing their homes for 30 days.
ANALYSIS IN LA TIMES: “Conventional wisdom holds that Wall Street is driven by two emotions: greed and fear. Today we see the second of those — the fear factor — on public display, in the form of the latest effort to forestall foreclosures.
(Headline for those who missed it: “The Bush administration, trying to deal with a worsening housing slump, announced a new initiative today aimed at helping homeowners about to lose their homes. For qualified homeowners, it will put the foreclosure process on hold for 30 days.”)
Banks and lenders are afraid — afraid of a deepening housing crisis, afraid of the political blowback, afraid of writing down more bad loans, and very, very afraid of being stuck owning foreclosed houses that are declining in value every day. The knife is still falling; banks and lenders do not want to catch it……CREDIT CRISIS IS NO LONGER JUST A SUBPRIME PROBLEMFOX BUSINESS NEWS REPORTS: PANIC, PANIC, PANIC
The risk of complete stock market meltdown, a crippling 5000 point nose-dive, is becoming increasingly likely.
The wild swings on Wall Street are becoming increasingly wild and more frequent. The fallout from the sub- prime crisis and slowdown in the economy increase the chances of a genuine economic nightmare.
To prevent the dominos from crashing the Federal Reserve has slashed interest rates by 1.25 percent in just the past two weeks. This means that “Real Interest Rates” are barely positive now. If they go any lower, they’ll be below official inflation rates.
“After inflation is considered, the bank will pay you to borrow its money, instead of the other way around,” says James DiGeorgia, editor of the Gold and Energy Advisor (www.goldandenergyadvisor.com). “Central banks like the Fed don’t do this unless they’re desperate — in panic mode.”
The latest reason for the Fed to panic is that bond insurers are in serious trouble.
“Bond insurers are capable of triggering a chain-reaction meltdown on Wall Street that spreads worldwide,” explains DiGeorgia. “A few years ago, bond insurers like MBIA and Ambac had quiet but profitable businesses. They insured bonds issued by municipalities, state governments, and other large organizations. Since these issuers rarely defaulted, the bond insurers rarely paid out on their policies. But the insurer executives got greedy. So they started insuring riskier bonds — such as mortgage-backed bonds, including subprime debt.”
These bonds are looking increasing fragile. Last Wednesday, Standard & Poor’s downgraded or took negative rating action against 8,000 mortgage bonds and CDOs, worth $534 billion. If only half of those go into default, it will mean $267 billion in losses. This is over two and a half times worse than anything in this crisis thus far.
And, according to estimates, if one or more of the insurers gets downgraded, Wall Street will face an estimated $70 billion in more losses.
“The risk of complete stock market meltdown, a crippling 5000 point nose-dive, is becoming increasingly likely. This would send gold to $2,500, and may even cause sudden 1929-type runs on banks and financial institutions across the country,” cautions DiGeorgia.
The fact that Fox Business Channel is reporting this–given its predeliction to offer “positive” business news is a sign of how serious things are….Billionarire Investor Warren Buffet Offered To Rescue Wall Street From This Crisis By Guaranteeing The Bonds–But At A Stiff Price; Many Fear His Plan Won’t Work; Government Asleep?
WALL ST EXAMINER: PONZI SCHEMES ABOUND'
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