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Urban Survival...
A particularly candid assessment came in the UK Guardian papers on Monday that sized up the British Labor Party's big [economic] gamble this way:
..."Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked.""
Zooming in, the Fed action on Wednesday about ensures that $1-trillion dollars will be 'created' out of thin air, although the issue as I see it, continues to be one of velocity since money at rest doesn't create jobs, money in motion does. Filling the coffers with money at rest (capital) only works when that money is loaned out at interest, a process that takes time, and that will be something for future historians to debate.
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Underlying the economic problems is a broader issue: I happened to spend a few hours yesterday in the Federal Election Commission's database of political contributions to do a little research on how much money Senator Chris Dodd (who added the executive bonus provisions to the Stimulus Bill) had received from current and past AIG executives. I got up to $54,000 with contributors through "L" in the alphabet and became so distraught that I called Robin Landry to commiserate a bit.
Landry made an interesting point after we agreed that honesty and integrity seemed to be in increasingly short supply in the country of late. He noted that with the executive bonuses, there's a fine line because if government can arbitrarily negate written contracts it sets a dangerous precedent: from then on - when contracts can be voided at the government's will, you could get to a point where systemic trust could break down. A most astute observation on his part. And systemic distrust seems a key in turning a recession into a Depression.
So that got me to wondering what would happen if I set up a keyword flag on the word "lie" and put it into my morning routine of news questing; what would come up?
"Obama LIED to us in order to push his merit pay/charter school agenda" headlines one report.
Over here, in "Dodd Changes His Story" the word 'lie' appears. And although the phrase "now I remember adding that bonus language..." comes up in some reports, the best news of the day may be that some in the MainStreamMedia are getting tougher with their questions.
Of course, as the questions get tougher, the answers found become more distasteful:
"Fannie plans bonuses of $1M for 4 execs"
"AIG's Liddy asks employees to give back bonuses" - and AIG worried about employee safety isn't giving out employee names.
We're also discovering that "Hedge funds may benefit from government cash to AIG: report"
Still, the good news is that the usual drivel and softball questions are evaporating and now we can get down to asking hard questions, not only of our leaders, but of ourselves.
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Oil Up
Over $51. Remember my projection of $3 gas within a year...prices can't stay down forever, so enjoy it while you can. The double whamming is when the dollar is slammed. That's when things will get....er...interesting.
Watch Leno Tonight
President Obama is due to be on Jay Leno's show tonight, becoming the first sitting president to make an appearance. Wonder if he'll do stand up?
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Speaking of speaking: Hopefully the teleprompter will work better for O tonight than the St. Patties Day situation where a prompter blunder left Obama thanking himself in a speech....
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Coping: Investing in TEOTWAWKI
I'm not the only guy who has a Bond Dude...someone who looks at the market from the fixed income perspective. A reader just sent me a remark by his Bond Dude which is pretty revealing:
" I don't know what to think other than that this is what the end of civilization looks like months before its occurrence. A mirage. We all just learned that we are in a depression."
But just because we are in a new Depression - something that's slowly seeping into the collective consciousness, it doesn't mean that it's totally 'the end of the world as we know it' -TEOTWAWKI. Still, there seems to be a fair bit of risk into jumping on this "new bull market" just yet. As a reader in Europe noted today:
"While only 12 calendar days the Dow registered its lowest close in over a decade, some of the sentiment data are registering very bullish sentiment from traders. It seems that virtually everyone knows the market has reached an important bottom and cannot wait to take advantage of these great bargains. Perhaps they should know the CBOE total put call ratio and the Trading Index moving averages are signaling some of the most bullish sentiment seen in years. It would be hard to imagine a more bearish scenario than that. Of course the mkt is always right and I hope it will prove me wrong."
The problem in making sense of the world, in light of the Fed decision on Wednesday is becoming more difficult, for sure, as another writes:
"I'm confused. How do you purchase your own bonds. are they literally taking them off the books by doing this. this has to create massive inflation. please comment"
You got it! The whole financial world is now certifiably unsane. Not insane - I said unsane. As in completely frigging nuts. Here's further proof:
"For your "Are-you-freakin-kidding-me?" Dept:
Ok, George, I tried to wrap my head around it, but this one is just too unbelievable to not require a shot of El Don. Get this: Geithner is in over his head and clueless as to how to move forward, so Obama has decided to "help" him out, instead of firing him...
"Citigroup Inc.'s chief economist is leaving the company for a job at the Treasury Department..."
You have absolutely got to be kidding me!!! The corruption is totally off the freakin' hinges. How much more obvious can it possibly get, before people realize they're being obamaboozled!
Un-freakin-believable. Good luck not poppin' a vessel over this'un.
Figuring out how to cope with - and invest a bit here and there - in the face of the massive changes now underway presents something of a problem. It's like walking into what you used to gamble in when it was an honest casino had suddenly replaced all its blackjack dealers with sleight-of-hand specialists who were certifiably nuts. And when you go over to the roulette machines, it dons on you that none of the machines are paying off anything. except for the ones that are already occupied by players who are friends of the casino's owner. And over at the dice table, the die are loaded...but the loads change on every throw or two, so no matter what, yoiu get deeper and deeper down in your own pocket to just keep playing.
At some point, you pinch yourself and ask "What am I doing in this casino?"
Folks who've been reading this site may have come to the conclusion it's a good place for cheap drinks and people watching, but little else. The sense of surreal is starting to permeate the public's mind, as in another email I read:
"I enjoy reading about "business" (well, not so novel these days) because I never took a biz course in my life... it's like reading sci- fi..."
And the change is everywhere you look:
"For a while now I have noticed that we here in the US of A are no longer "CITIZENS" and rather have become "CONSUMERS" I even see this term used by yourself. In my view, CONSUMERS are all standing in the feedlot waiting for slaughter or their need feed. When did we stop being citizens? It really sends an interesting message/mindset about who we are, don't ya think? Citizens might DO something! Consumers, well...
Tom Freidman NYTimes was on NPR recently and used the terms "I"ll be gone/you'll be gone" (IBG/YBG) to reference the attitude(s) of almost everyone when It comes to what I'll call personal responsibility. (Real estate flip that house who cares? (IBG), get that alt a mortgage (IBG) , then flip that house (YBG) Bundle those and sell 'em (IBG)...As simple as getting the order wrong at the fast food window (YBG) I think it starts way up at the top of the foodchain and business simply play the percentages and is pervasive throughout most all transactions. Here in Colorado the gas drillers want to drill in watersheds of the communities downstream Cuz they can, they leased the right from someone else (Fed) who does not live there (IBG) and they're not about to announce what chemicals they use to "frac" the gas out (proprietary info) and it's in the drinking water now! (its okay IBG) And some wonder why we're in a mess.
The first rule of wealth building: "Spend less than you earn"
Second rule: "Never break rule #1"
You think Prez Obama could here that/ follow that? (I'm not there yet, myself, only to the place where I have left-over non allocated $ from one paycheck to another. Getting my garden in,
Puts a whole range of meanings on this...
Till tomorrow?
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