Archive for the ‘Financial Crisis’ Category

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Scraping the bottom of the barrel.

Friday, May 21st, 2010

It’s taken a couple of years. . . but this AM the news is in about the budget agreement. . . and it looks like the state of Oklahoma is finally reaching the bottom of its fiscal barrel.  To plug the state budget deficit, the legislature is draining the state’’s rainy day fund, leaving only $100 million to apply to the expected deficit next year.

Which is to say that our state’s political and economic leadership remains in denial about the message that the present situation is sending. They continue to have a nice picnic, enjoying their fried chicken and potato salad, while ignoring the roaring winds of the tornado bearing down upon them.

This of course means that when reality can no longer be evaded, the situation will be much worse than it would be if they had gotten serious from day 1 of the financial crisis.

States and nations choose to adapt and survive or they choose to decline and fail.  Alas for us, Oklahoma’s political leaders choose decline and failure instead of embracing the challenges of this era and innovating our way forward into better times.

We the people must act now to save ourselves, because our political leadership is doing nothing serious about the storms that are upon us.

Got a local food system?

Got an economic alternative and a cash reserve?

Got a super-insulated, energy efficient house with passive solar, no mortgage, and lots of edible landscaping?

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That didn’t last long.

Tuesday, May 11th, 2010

Yesterday on the euphoria of the quick rush of the new European financial methamphetamine drug, the markets soared.  Overnight, Asian markets fell, and the US markets barely went anywhere, turning negative in the afternoon.

That’s the problem with financial methamphetamine.  It directly parallels the experience of actual meth users.  At first it doesn’t take much to get you high and you enjoy the experience.  Then it takes more, and the high lasts for less time.  And THEN it takes even more, and lasts for much less time, and the whole schtick is much less enjoyable.  But you don’t have a way out, or at least, the addict doesn’t think that he or she has a way out.  They think they have no choice but more meth.  Sooner or later, they burn out completely.  If they’re lucky, they end up in an emergency room and get medical care.  If unlucky, they’re found dead somewhere.

Today commentators looking at the European meth plan are actually making common sense remarks, like . . .

“Lending more money to already overborrowed governments does not solve their problems,” Carl Weinberg, chief economist of High Frequency Economics in Valhalla, N.Y., said in a note.

Throwing good money after bad.  Yes, let’s loan someone who can’t pay their bills EVEN MORE money to be paid back later, with interest.  That’s great economic policy, right? 

  • Got a local food system?
  • Got a local economic safety net?
  • Got food storage and edible landscpaing?

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Yee-Haw! Another methamphetamine jolt for the financial markets.

Monday, May 10th, 2010

Following the announcement of the discovery of a giant supply of financial methamphetamine from the European money drug labs, world markets soared as the drug rush hit all the usual junkies.  The latest hit was “just-in-time”, since most of the addicts had been a bit quesy since the recent near-thousand-point wilt in the US stock markets.  Happy times indeed are here again. . .  until of course this rush fades and the queasy feelings set in, and people start getting restless and antsy and worried about where they are going to get their next financial high.  Each high, of course, moves us one step closer to the day when the drug no longer works, but hey, why think about the future while we are relaxing into that intense and comforting financial methamphetamine high?

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Three cheers for Iceland!

Tuesday, January 12th, 2010

I just posted the comment below at the Ice News website, which provides news about Iceland in English, commenting about the coming referendum on the unjust demands of the British and Netherlands governments regarding the responsibility of the people of Iceland to make good on the deposits of British and Netherlands citizens in Icelandic banks.

Begin comment. . .

I say “Three cheers for the brave Icelandic people who refuse to be impoverished by the demands of the crooks and fools running the British and Netherlands governments.” It is at best disingenuous to lay all of this on the nation of Iceland. If the British and Netherlands governments allowed these banks to operate in their territories, then their regulators are at fault for not noticing how thinly the guarantee fund was financed.

In the comment thread above, several statements have been made about the credit-worthiness of the United States government. Anyone who believe this is delusional. Anyone who thinks that US taxpayers will actually be able to pay the many trillions of dollars our own crooks and fools have obligated us for is also delusional (cf all the guarantees we’ve been handing out like candy to the crooks on Wall Street and in the big transnational banks).

Beware of anything you hear the US government saying about its finances. Tax receipts for governments — local, state, national — are plummeting. The feds are fiddling with their statitics just like they did in the old Soviet Union. Unemployment is at least twice what the government is reporting.

So if we ever actually pay our bloated debt and bank/finance system guarantees, it will only be thanks to a hyper-inflation where the price of a cup of coffee at my favorite local cafe has risen from US$1.00 to US$100 or even more. A lot of good your US dollars will do you then. I have thought that maybe they could be shredded and used for insulation, and I suppose they could be composted and used to grow vegetables.

Keep banging those pans, Icelanders. Make a noise loud enough to sound across the world.

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The good, the bad, the ugly. . .

Saturday, October 24th, 2009

I’ve been afflicted by writer’s block lately.  The news seems to be about the same as it has been over the past year.  The government and the Wall Street parasites are jaw-boning a recovery.  The huge collection of government critics keeps debunking the federal propaganda.  Meanwhile, things continue to go from bad to worse for many people.

On the positive side, it was a great year for fruit here in central Oklahoma.  My pantry is loaded with jars f peach jam and pear butter, and the freezer is full of tomatoes and hot peppers and cooked squash, not to mention beef, chicken, pork, and buffalo, all from our own gardens or within a hundred miles or so of Oklahoma City. The backup batteries are charged and the inverter is on the shelf.  I need to fill the propane tanks, and finish the wood pile, but it looks like we ae about ready for winter.  I am still working on following my own advice — 20 resilient responses for troubled times –  and I hope others are doing likewise.

The continued betrayal of We the People by our political, economic, academic, and religious elitesis troubling and dangerous to the common good.  Both political parties are about as dysfunctional as they can be.  If we don’t save ourselves, there will be no resuce.

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Stockholm Syndrome writ very large.

Tuesday, August 25th, 2009

Comes now the news Ben Bernanke has been reappointed as head of the Federal Reserve.

It seems to me like our whole nation has plunged deeply into a gigantic Stockholm Syndrome when it comes to the parasites, fools, and thieves of our financial system.  How soon we forget the days when the hired political agent of Wall Street — the Tyrant Emperor George Bush II — threatens Congress with martial law and a complete meltdown of the financial system unless they take trillions from Main Street and give it to Wall Street.  And there is Ben Bernanke, right in the middle of the robbery, egging it on, joining in the heist.

So what is our response to these wicked people who held (and hold) our nation hostage? Do we lock them up in jail and throw away the key? Not on your life. We give them even MORE money, and reappoint the arch-criminal of them all, Ben Bernanke, to another term as head of the Federal Reserve.

The worse they treat us, the more we apparently love them.  This sounds like the Stockhold Syndrome writ very large, and it augurs very poorly for the future.  If you reward crime, you get more criminals. That’s the basic facts of this life.  So expect more taking from Main Street so the feds can give more to the fools, parasites, and thieves on Wall Street.

That’s what this game is about, and it will continue right up until the moment our entire nation falls onto the ash heap of history.

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More on deflation.

Monday, August 17th, 2009

The bad news keeps coming in.

  • Nearly 1/3 of mortgages are under water, that is, the mortgagees owe more money than their houses are worth. Add in the mortgages that are “almost negative”, and we’re at 38%.  Here in Oklahoma, 19.6% of mortgages are negative, and 30% are nearly negative, so we are at 49.6%!  But. . . but .  .  . but . . . our local political and economic aristocrats have been assuring us, for months, that the “recession isn’t so bad here in Oklahoma” and “our property values remain strong”. {icon of hand slapping forward.} “Idiot!  The aristocrats are lying.  You should know that better than anyone.” Why is this so bad? Well, every one of those negative or near-negative mortgages is just about one major personal financial crisis away from a “walk-away foreclosure”.
  • Here are charts from the St. Louis Federal Reserve Bank that make a pretty compelling case for deflation.  Import prices? Down 20%.  Export prices? Looks like down about 8%. “Official” CPI? Down 2% (largest negative in 59 years). Retail sales? Down 10% over last year. Imports? Down about 35%. Exports? Down about 28%. Inventories? Down 10% over last year. Capacity utilization? 65% (all time low). Non-durable goods manufacturing? Down 9%. During goods manufacturing? Down 20%. Total manufacturing output? Down 15%. And so on and so forth.

OK, that’s enough for now. I should have advised readers to take a couple of shots of bourbon before reading this article. Indeed, I should have had a drink or two before writing it, but alas, I am stone cold sober.

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More thoughts on dysfunctional aristocracy.

Tuesday, August 11th, 2009

Yesterday’s post led to further thoughts today on our problem with dysfunctional aristocracies. Simon Johnson writes today about the problems our “too-big-to-fail” policies and our refusal to properly regulate Big Finance will cause for our future.  He notes that the Chinese are investing in production, while we are investing in finance.  In other words, in the future, China will eat our lunch.

The problem is not confined to economics.  Our religious aristocracies show similar signs of dysfunction.  How many US Catholic bishops lost their jobs for conspiracies to conceal the problem of sexual abuse among the clergy?  Not very many, that’s how many, and to this very day, the arch-enabler of clergy sexual abuse, Cardinal Law, remains a cardinal, is on all of the Vatican committees relating to bishops, and is arch-priest of the Basilica of St. Mary Major, one of Rome’s four pilgrimage basilicas.  None of the Vatican bishops who conspired with the US bishops has ever been identified or punished. And some people still wonder why the US has such a crisis in recruiting new priests.

The political aristocracies are no better.  Our new Tyrant-Emperor is shaping up as pretty much the same as the old Tyrant-Emperor on the really big questions like continuing the war and continuing to feed/protect the parasites of Wall Street.

This is not a future to bet on.  The aristocracies of these united States are as clueless as the aristocracies of France in 1789 or Russia in 1917. They continue to think that their place of privilege is secure from any challenge and their right to loot the population will not be infringed upon.

Alas for them — and for us — the triple dooms of peak energy, climate instability, and economic irrationality remain on the horizon, coming ever more closely with each passing day.  Elites don’t usually do well in such systemic crises, just ask the French and Russian aristocracies about that.  But then, the French and Russian people didn’t do so well either in their systemic crises.

The advantage that we have that wasn’t there in 1789 and 1917, however, is a certain amount of foreknowledge and understanding of what is happening.  Widespread literacy, very cheap knowledge, practically instantaneous forms of communication and storage of knowledge (internet, book publishing, etc), a wider sphere of possible actions, all these are points that suggest the ability of people to prepare now for hard times coming at them.

The key to survival, however, is to avoid procrastination.  Now is the time to make hay while the sun is shining.

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Economic check

Monday, August 10th, 2009

Well it’s been a while since I’ve ranted about the financial crisis.  So how are we doing?  Are we now safely out of the woods so everyone can ignore my various advices to prepare for a financial hurricane?

The short answer is “no”.

  • Foreclosures and delinquencies are still rising,
  • unemployment is increasing (the government of course continues to fiddle with the reports to make the problem seem less than it is, my rule of thumb is “double the government’s unemployment figure to find the REAL unemployment rate),
  • The financial reports of banks and other financial institutions are still loaded with worthless assets that are being carried at full value on their balance sheets,
  • The rate of bank failures appears to be increasing.
  • The likely result of “financial regulation reform” is going to be to increase the power of the big guys, and do nothing substantive for retail financial services customers (so it is definitely “let the buyer beware” when it comes to retail finance),
  • The biggest financial institutions are profiting from the government’s assistance in eliminating key rivals, and as a result, are handing out major bonuses this year,
  • Despite historically low Federal Reserve interest rates, the cost of retail credit to families and small businesses is headed up, and the number of fees and penalties is proliferating like mosquitoes in a swamp,
  • The Commerce Dept reports that wages for the 12 months preceding June 2009 fell 4.7%, the largest decrease since these records started in 1950,
  • Household net worth has declined by $13 trillion since 2007.
  • Homes for sale are at historic highs, but there is evidence of a huge “shadow inventory” of homes not on the market, but held by banks (foreclosures) who are releasing them slowly to keep the market from declining even further.

Etc. etc. yadda, yadda, yadda.

So no, I don’t see anything that is stopping my work on my own Category 5 Financial Hurricane Survival Plan.  I am confident that no one in Washington DC or my own state capitol or even my own city hall cares a rat’s behind about what happens to me and mine.  They are all about helping the aristocracy, and that “help” will always be at the expense of Main Street.  We must save ourselves and unite to save each other, because our aristocracies are leading us straight to the ash heap of history.

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Big banks making out like phat rat.

Friday, July 17th, 2009

Day after day this week the news has been headlined about this or that Wall Street financial institution turning in GIGANTIC HUMONGOUS INCREDIBLE profits.  Well, duh.  First you winnow the field a bit by selectively letting some institutions go bankrupty while favoring others with better political connections.  Then you shovel untold — and mostly unaccounted for — mega bucks out of helicopters all over the Wall Street financial district. Voila, the big banks are making big profits.  What’s so mysterious about that?  It’s the way things are supposed to work.

Meanwhile, on Main Street — foreclosures reach an all time high, unemployment is at  Depression levels (real unemployment that is, not the fake Soviet-style numbers posted by the Commissariat of Labor, and Main Street wealth is shrinking. You can’t take trillions of dollars from real people on Main Street and give it to fools, parasites, and crooks on Wall Street, and not hurt some people.  These people losing their homes, their jobs, their savings and etc are just — in the popular political parlance — “collateral damages”.  There are maybe one or two people in Congress and the White House who actually care anything for the suffering of the people.  “Be patient” — we are advised, by a man whose salary is in $400,000 plus housing plus staff plus protection plus extra amounts for “unanticipated expenses.”  Most people, if they had his deal, would surely be willing to “be patient”.  but most people don’t have a sweet deal like that.

So it goes through the collapse of the American Empire.  It will continue until people decide they are tired of being the victims of fools, crooks, and parasites and decide t stop paying the bills for our aristocracies.  Then, as we . . .

  • cut up our credit cards and pay off our debts,
  • grow our own food,
  • buy food directly from farmers,
  • walk/ride bicycles/take public transportation,
  • stop investing in the stock market casino,
  • take our money out of the big banks and put it into locally owned credit unions and banks,
  • stop listening to the lies of politicians and corporations,
  • invest in extreme energy conservation,
  • slash household spending
  • stop spending money with national corporations and start supporting locally owned businesses,

we will create a new society within the collapsing ruins of the old and our aristocrats and politicians will have to find honest work.

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