by Jim Kunstler
Though Citicorp is deemed too big to fail, it's hardly reassuring to know that it's been allowed to sink its fangs into the Mother Zombie that the US Treasury has become and sucked out a multi-billion dollar dose of embalming fluid so it can go on pretending to be a bank for a while longer. I employ this somewhat clunky metaphor to point out that the US Government is no more solvent than the financial zombies it is keeping on walking-dead support. And so this serial mummery of weekend bailout schemes is as much of a fraud and a swindle as the algorithm-derived-securities shenanigans that induced the disease of bank zombification in the first place. The main question it raises is whether, eventually, the creation of evermore zombified US dollars will exceed the amount of previously-created US dollars now vanishing into oblivion through compressive debt deflation.
My guess, given the usual time-lag factor, is that the super-inflation snap-back will occur six to eighteen months from now. And the main result of all this will be our inability to buy the imported oil that comprises two-thirds of the oil we require to keep WalMart and Walt Disney World running. At some point, then, in the early months of the Obama administration, we'll learn that "change" is not a set of mere lifestyle choices but a wrenching transition away from all our familiar and comfortable habits into a stark and rigorous new economic landscape.
Read on...
Peacenik was feeling kind of discombobulated this morning when Peacenik realized Peacenik hadn't read Kunstler's Monday morning eye opener. Yes, all is well, everything is still going to hell in a handcart. But Kunstler at least prescribes a few remedies.
11/24/08
11/23/08
We've Been Down This Road Before: A Great Depression Quiz
by Jacob Savage
Half of these quotes are taken from Arthur Schlesinger Jr.'s "The Crisis of the Old Order," about the Great Depression and the coming of the New Deal; the other half are taken from media sources during the last four years. All proper names and specific dates are underlined and have been replaced with their generic counterparts. A small portion of the text has been edited for concision and clarity, with any obvious anachronisms removed.
Your task is to decide what era and person each excerpt refers to: a) Herbert Hoover, Calvin Coolidge, Franklin Roosevelt, and the events of 1929-1933, or b) George W. Bush, John McCain, Barack Obama, and the events of the last four years.
Read on...
Peacenik was caffinating the cobwebs from Peacenik's mind when Peacenik came across this quizz. Are we in a depression? What metrics would you use to decide? Peacenik took the quizz. Peacenik had fun. Peacenik is posting from a new location on a new computer. This is a test.
Half of these quotes are taken from Arthur Schlesinger Jr.'s "The Crisis of the Old Order," about the Great Depression and the coming of the New Deal; the other half are taken from media sources during the last four years. All proper names and specific dates are underlined and have been replaced with their generic counterparts. A small portion of the text has been edited for concision and clarity, with any obvious anachronisms removed.
Your task is to decide what era and person each excerpt refers to: a) Herbert Hoover, Calvin Coolidge, Franklin Roosevelt, and the events of 1929-1933, or b) George W. Bush, John McCain, Barack Obama, and the events of the last four years.
Read on...
Peacenik was caffinating the cobwebs from Peacenik's mind when Peacenik came across this quizz. Are we in a depression? What metrics would you use to decide? Peacenik took the quizz. Peacenik had fun. Peacenik is posting from a new location on a new computer. This is a test.
11/21/08
Time for a Bank Holiday
Comment
By William Greider
Henry Paulson's $700 billion plan to save the world is dead or dying, but the bailout was not killed by his arrogance or his grossly misleading claims about what the public's money would buy. The plan collapsed because it didn't work. The Treasury secretary has launched a PR offensive to revive his falling influence. Too late. The Democrats should be equally embarrassed. In September their leaders in Congress rushed to embrace the Paulson solution, no hard questions asked. They now claim they were duped.
Paulson's squad at Treasury pumped $250 billion into the largest banks, buying their stock at inflated prices on the assumption it would persuade investors to step forward with their capital too. Instead, savvy financial players realized Paulson was spitting into a high wind, trying to save a system with stout talk.
In the absence of any reasonable plan Peacenik thinks Greider may have a good idea. Global capitalism has failed. North America is about to become third world like. Its time for some radical, progressive leadership. The crisis can't wait for Jan. 20. Peacenik thinks Peacenik will go to a hockey game, drink some beer and forget about Wall Street. Have a good weekend.
By William Greider
Henry Paulson's $700 billion plan to save the world is dead or dying, but the bailout was not killed by his arrogance or his grossly misleading claims about what the public's money would buy. The plan collapsed because it didn't work. The Treasury secretary has launched a PR offensive to revive his falling influence. Too late. The Democrats should be equally embarrassed. In September their leaders in Congress rushed to embrace the Paulson solution, no hard questions asked. They now claim they were duped.
Paulson's squad at Treasury pumped $250 billion into the largest banks, buying their stock at inflated prices on the assumption it would persuade investors to step forward with their capital too. Instead, savvy financial players realized Paulson was spitting into a high wind, trying to save a system with stout talk.
In the absence of any reasonable plan Peacenik thinks Greider may have a good idea. Global capitalism has failed. North America is about to become third world like. Its time for some radical, progressive leadership. The crisis can't wait for Jan. 20. Peacenik thinks Peacenik will go to a hockey game, drink some beer and forget about Wall Street. Have a good weekend.
America in Free Fall
By Robert L. Borosage, Campaign for America's Future. Posted November 21, 2008.
Congress might adjourn without acting on the deepening economic crisis, leaving Obama to inherit the catastrophe.
Free fall. The U.S. has lost private sector jobs for 10 straight months. One quarter of all businesses in the U.S. plan to cut payroll over the next year. Retail sales fell in October by the largest monthly drop on record. Auto sales have collapsed, driving the auto companies towards the precipice. Unemployment is up to 6.1 percent, with most analysts predicting it will soar past 8 percent over the next year. (That translates into unemployment among young minority men at rates of 50 percent or more). States are now facing $100 billion in deficits in operating budgets for the next fiscal year. Twelve million homes are "under water," worth less than their mortgages. The U.S. has joined Germany and Japan in what is becoming a global recession.
"The era of big government is over" is over. In the crisis, we are, as Richard Nixon once said, "all Keynesians now." Former Clinton Treasury Secretaries Robert Rubin and Lawrence Summers, until recently notable deficit hawks, now call for substantial fiscal stimulus -- deficit-funded federal spending -- to get the economy going.
Peacenik cannot overstate the severity of this financial crisis. Apparently this morning the Dow futures are modestly up. Asia didn't collapse more overnight. But no one thinks this is the bottom. Like Punditman, Peacenik is seriously considering stocking up on necessities. Is Peacenik crazy? Is today financial armageddon?
Congress might adjourn without acting on the deepening economic crisis, leaving Obama to inherit the catastrophe.
Free fall. The U.S. has lost private sector jobs for 10 straight months. One quarter of all businesses in the U.S. plan to cut payroll over the next year. Retail sales fell in October by the largest monthly drop on record. Auto sales have collapsed, driving the auto companies towards the precipice. Unemployment is up to 6.1 percent, with most analysts predicting it will soar past 8 percent over the next year. (That translates into unemployment among young minority men at rates of 50 percent or more). States are now facing $100 billion in deficits in operating budgets for the next fiscal year. Twelve million homes are "under water," worth less than their mortgages. The U.S. has joined Germany and Japan in what is becoming a global recession.
"The era of big government is over" is over. In the crisis, we are, as Richard Nixon once said, "all Keynesians now." Former Clinton Treasury Secretaries Robert Rubin and Lawrence Summers, until recently notable deficit hawks, now call for substantial fiscal stimulus -- deficit-funded federal spending -- to get the economy going.
Peacenik cannot overstate the severity of this financial crisis. Apparently this morning the Dow futures are modestly up. Asia didn't collapse more overnight. But no one thinks this is the bottom. Like Punditman, Peacenik is seriously considering stocking up on necessities. Is Peacenik crazy? Is today financial armageddon?
11/20/08
Antiwar Groups Fear Hawkish Cabinet
As President-elect Barack Obama’s national security team begins to take shape, there is increasing disquiet among antiwar activists that his appointees and rumored appointees have thus-far, without exception, favored the Iraq invasion and held hawkish foreign policy positions.
The persistent reports that Obama is in talks with Secretary of Defense Robert Gates about keeping his position in the new administration had already prompted loud complaints that keeping him on was not in keeping with his campaign’s mantra of change. His apparent preference to make Sen. Hillary Clinton his Secretary of State, despite all the times he publicly trashed her position on the Iraq War during the primaries, has only added to those concerns.
But nowhere in Obama’s “Team of Rivals” cabinet is any suggestion of an appointee less-hawkish than himself, meaning his increasingly tenuous claim to being an antiwar politician will serve as the base-line for his administration’s foreign policy, with his cabinet pulling it in ever more bellicose directions.
punditman says...
Punditman is adding to Peacenik's bad economic news with this bad political news, which can only be construed as a disappointment to those who hoped for some sort of progressive foreign policy out of Obama (Punditman is not one of those naive types). Oh well. Perhaps the economic mess will constrain any further military adventurism?
On the bright side, Punditman scored a nice goal on a slapshot through the five-hole today and is therefore happy with his new hockey shaft purchase, which he got on sale. He recommends that everyone stock up on sporting goods of all kinds -- before world shipping grinds to a halt and store shelves become bare. In the days to come, recreational equipment may well be scarce -- and God knows we'll need it.
Debt Rattle, November 19 2008: Full Metal Coffin
Ilargi: Hmmmm. It’s starting to look like we're about to see a harbinger moment of sorts, isn't it? I see no indication that the Motown Big Three will get what they want. Flying in on private jets may well be the last nail in the full metal coffin.
A free hand-out now seems to be entirely off the table, and that would leave only the option of a loan. But what could the Three put up as collateral for that loan? For every million dollars a factory might be worth, and that is a big if once the stones start a-falling and a-rolling, there are many millions more in obligations.
Read on...
Peacenik has never seen so much bad financial news as there is today, November 20. Yesterday the DOW closed below 8000 and now there is talk about it going to 6400. GMAC wants to reclassify itself as a bank so it can get financial aid. The North American auto industry is on the verge of disappearing. Banks and Insurance companies are bankrupt but hiding the information from he public. Consumer confidence is at record lows. The people trying to solve the problem....Bernake, Paulson, Harper etc. are flopping around like fish on a dock. There is no plan. There is no leadership. Peacenik thinks Peacenik needs some escapist entertainment.
A free hand-out now seems to be entirely off the table, and that would leave only the option of a loan. But what could the Three put up as collateral for that loan? For every million dollars a factory might be worth, and that is a big if once the stones start a-falling and a-rolling, there are many millions more in obligations.
Read on...
Peacenik has never seen so much bad financial news as there is today, November 20. Yesterday the DOW closed below 8000 and now there is talk about it going to 6400. GMAC wants to reclassify itself as a bank so it can get financial aid. The North American auto industry is on the verge of disappearing. Banks and Insurance companies are bankrupt but hiding the information from he public. Consumer confidence is at record lows. The people trying to solve the problem....Bernake, Paulson, Harper etc. are flopping around like fish on a dock. There is no plan. There is no leadership. Peacenik thinks Peacenik needs some escapist entertainment.
25 Most Important Stories the Media Isn't Reporting (w/ poll)
by StanMO Wed Nov 19, 2008 at 09:00:37 PM PST
Need a break from talk of Joe and Hillary?
Project Censored conducts research on important national news stories that are underreported, ignored, misrepresented, or censored by the US corporate media. Each year, Project Censored publishes a ranking of the top 25 most censored nationally important news stories in the yearbook, Censored: Media Democracy in Action.
Here is this year's list:
Peacenik gets most of his news and information from blogs, plus a few online mainstream media sites. Peacenik thinks the MSM deserves to go out of business. The MSM rarely gets a story right. The MSM has its own agenda. The MSM hates bloggers. This is an interesting list of MSM failures or I suppose from their point-of-view, successes.
Need a break from talk of Joe and Hillary?
Project Censored conducts research on important national news stories that are underreported, ignored, misrepresented, or censored by the US corporate media. Each year, Project Censored publishes a ranking of the top 25 most censored nationally important news stories in the yearbook, Censored: Media Democracy in Action.
Here is this year's list:
Peacenik gets most of his news and information from blogs, plus a few online mainstream media sites. Peacenik thinks the MSM deserves to go out of business. The MSM rarely gets a story right. The MSM has its own agenda. The MSM hates bloggers. This is an interesting list of MSM failures or I suppose from their point-of-view, successes.
11/19/08
Debt Rattle, November 19 2008: He'll have to go
Stoneleigh:
A 1930s style depression is not impossible by any means. If governments could avoid a depression merely by printing money, then one would never have happened. Unfortunately, depressions do happen, because ‘money printing’ (monetizing debt) doesn’t cause inflation (ie an increase in the effective money supply) during a hurricane of credit destruction. Traditional money supply measures don’t capture the full picture.
Credit functions as a money equivalent during the expansion phase, but loses the quality of ‘moneyness’ once expansion morphs into contraction. As the vast majority of the effective money supply is currently credit, the collapse of credit will crash the money supply. As is already happening, ‘printing’ merely send money into a giant black hole of credit destruction, thanks to the hoarding mentality that has taken hold amongst banks due to the collapse of trust. Banks know what toxic waste they hold in their own vaults, and certainly aren’t going to trust their colleagues who almost certainly hold the same.
Peacenik thought Ilargi was frequently downbeat but his blogging partner Stoneleigh may top Ilargi's sense of doom in this piece. You have to scroll down a bit to get to Stoneleigh's article. Peacenik wonders what comes after fear.
A 1930s style depression is not impossible by any means. If governments could avoid a depression merely by printing money, then one would never have happened. Unfortunately, depressions do happen, because ‘money printing’ (monetizing debt) doesn’t cause inflation (ie an increase in the effective money supply) during a hurricane of credit destruction. Traditional money supply measures don’t capture the full picture.
Credit functions as a money equivalent during the expansion phase, but loses the quality of ‘moneyness’ once expansion morphs into contraction. As the vast majority of the effective money supply is currently credit, the collapse of credit will crash the money supply. As is already happening, ‘printing’ merely send money into a giant black hole of credit destruction, thanks to the hoarding mentality that has taken hold amongst banks due to the collapse of trust. Banks know what toxic waste they hold in their own vaults, and certainly aren’t going to trust their colleagues who almost certainly hold the same.
Peacenik thought Ilargi was frequently downbeat but his blogging partner Stoneleigh may top Ilargi's sense of doom in this piece. You have to scroll down a bit to get to Stoneleigh's article. Peacenik wonders what comes after fear.
Will Beer Be the Next Casualty of the Crisis?
The downturn could hurt high-end brewers
By Kimberly Palmer
Posted November 18, 2008
The beer industry is often described as immune to economic downturns. After all, when people get laid off, they want to nurse their sorrows with a cold one, right?
It turns out that, as the beer industry has gone increasingly upscale, the answer to that question is no longer simple. In recent years, beer sales have been relatively flat except in one category—craft beers, which are made by small, independent brewers. Amy Mittelman, author of Brewing Battles: A History of American Beer, says that the heyday for such high-end, specialty beers could soon be over as consumers look to cut costs. Mittelman spoke to U.S. News about the future—and history—of the American beer industry. Excerpts:
Peacenik is shocked. The auto industry, the insurance industry, the banking industry, all fall down. But beer? Peacenik senses total meltdown by Friday. Peacenik may start brewing Peacenik's own beer.
By Kimberly Palmer
Posted November 18, 2008
The beer industry is often described as immune to economic downturns. After all, when people get laid off, they want to nurse their sorrows with a cold one, right?
It turns out that, as the beer industry has gone increasingly upscale, the answer to that question is no longer simple. In recent years, beer sales have been relatively flat except in one category—craft beers, which are made by small, independent brewers. Amy Mittelman, author of Brewing Battles: A History of American Beer, says that the heyday for such high-end, specialty beers could soon be over as consumers look to cut costs. Mittelman spoke to U.S. News about the future—and history—of the American beer industry. Excerpts:
Peacenik is shocked. The auto industry, the insurance industry, the banking industry, all fall down. But beer? Peacenik senses total meltdown by Friday. Peacenik may start brewing Peacenik's own beer.
11/18/08
No For An Answer
By: Spencer Ackerman Tuesday November 18, 2008 9:10 am
Yesterday Hamid Karzai offered Taliban leader Mullah Omar safe passage to Afghanistan for peace talks, a move that I considered a thrown gauntlet. Now Omar's deputy, Mullah Brother -- inhale the gloriousness of that name and let it waft through your nostrils -- says no. And not just no, but hell no. Reuters reports:
"As long as foreign occupiers remain in Afghanistan, we aren't ready for talks because they hold the power and talks won't bear fruit ... The problems in Afghanistan are because of them," Brother said.
"We are safe in Afghanistan and we have no need for Hamid Karzai's offer of safety," he told Reuters by satellite telephone from an undisclosed location, adding that the Taliban jihad, or holy war, would go on.
Peacenik just wants to declare victory and bring the troops home.
Yesterday Hamid Karzai offered Taliban leader Mullah Omar safe passage to Afghanistan for peace talks, a move that I considered a thrown gauntlet. Now Omar's deputy, Mullah Brother -- inhale the gloriousness of that name and let it waft through your nostrils -- says no. And not just no, but hell no. Reuters reports:
"As long as foreign occupiers remain in Afghanistan, we aren't ready for talks because they hold the power and talks won't bear fruit ... The problems in Afghanistan are because of them," Brother said.
"We are safe in Afghanistan and we have no need for Hamid Karzai's offer of safety," he told Reuters by satellite telephone from an undisclosed location, adding that the Taliban jihad, or holy war, would go on.
Peacenik just wants to declare victory and bring the troops home.
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