Bailout won't unfreeze the economy

Adjusted for inflation, the incomes of non-government workers are lower today than in 2000. They're barely higher than they were in the mid-1970s. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. The top 1 percent of American earners now take home about 20 percent of total national income. In 1980, the top 1 percent took home just 8 percent. Inequality on this scale is bad for many reasons, but it is also bad for the economy.

Bailout or no bailout, we're heading into deep recession. One of the first initiatives that Congress and the next administration will need to take will be an economic stimulus package. But not even this will remedy the underlying problem: The earnings of most Americans haven't kept up with the cost of living. That means there's not enough purchasing power to keep the economy going.

With the bursting of the housing bubble, we're reaching the end of our ability to borrow, just as lenders have reached the end of their capacity to lend. That means there's not enough purchasing power in the economy to buy all the goods and services it's producing. We're finally reaping the whirlwind of widening inequality and ever more concentrated wealth.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/04/INTM139L8L.DTL

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...the ability of those in the middle and lower classes to buy more than the "necessities" has lessened. There is the possibility that those in the lower income levels could invent "luxuries" that the wealthy cannot live without. The "capital" that is tied up in the upper classes will have to wait until the wealthy are willing to risk their capital (not their lives) on a risk that will net them more. Now if you have an attractive daughter (or son) perhaps they could earn a living being some wealthy person's plaything, but unless you are the next Bill Gates your future is probably limited. Of course, we all share in this debacle. The money I spend at Wal-Mart's doesn't go to my local business. So perhaps the money I "save" now will come back to haunt me later. I wonder what will happen if the rest of the world quits investing in our debt, and looks to Europe as a safe haven for their wealth?

Old South End Broadway

I understand that China and other countries are quietly moving toward the Euro as a world currency. And if oil ever becomes priced in some money other than dollars, it will be all over for the greenback and our economy.

Ron Paul had some great comments about our paper money and its value:
"It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets... In the past 5 years the dollar has been devalued in terms of gold by more than 50%. You just can’t fool all the people all the time, even with the power of the mighty printing press and money creating system of the Federal Reserve... The artificial demand for our dollar, along with our military might, places us in the unique position to “rule” the world without productive work or savings, and without limits on consumer spending or deficits. The problem is, it can’t last."

Ron Paul seems to be the only guy in government who sees (or is willing to declare) that our economic "king" has no clothing.

http://www.house.gov/paul/congrec/congrec2006/cr021506.htm

You could have just posted "GuestZero was right" and then pointed people to my numerous postings on this topic.

Hey, I'm still a nice enough guy not to rub everyone's noses in it (... too much). The economy was being undermined and the collapse has just begun. All I require is people to just admit I was right and that what I said will happen, WILL happen.

And what will happen is the Great Depression II. Yes, that's right: Soup lines. Labor riots. National Guard deployments. Vagrants. 20% unemployment. Government works programs and many other aspects of Socialism.

We couldn't keep making strip malls, junk bonds and websites and call that shit an "economy". Instead of worthless services and other hyper-marketed FLUFF, manufacturing is the heart of ANY sustainable economy. That's true even in agrarian states, where each farmer has to make his own tools -- hence, it's a "hidden" industrial base.

Well, enough of that. I've said it all until I was blue in the fingers. I was right and most everyone else was just fucking WRONG. While they were spending themselves poor, maxing out even insane credit levels, I was living frugally and saving money (AS MONEY -- since a 401(k) and other accounts aren't SAVINGS), and now I'm going to be buying up one of you moron's houses for cash. Chances are, you're already out of it at the point of the Sheriff's baton, and it's unlikely you'll know the illustrious GuestZero is now sitting cozy in "your" home. But it was never YOUR home, since all YOU did was just rent it from a bank. Well, smart people don't live their lives as bank slaves. Smart people SAVE MONEY and use that money to make sensible purchases that continue saving them money (instead of playing like they were little Trumps with speculative assets).

Namely, David Byrne in the Talking Heads, singing "Road to Nowhere". That's what's happened to America ... we spent so much cultural energy trying to "get rich", that we ended up on the road to nowhere. Well, look around. Desert. You can't eat there. You can't drink there. There's nothing to do there. So maybe after you lose your job, your house, your spouse and then your fucking mind, you'll pass your hard-earned wisdom to the next generation for GOOD, to wit: Chasing money like it's a god just puts you on the road to nowhere.

http://www.youtube.com/watch?v=sQXsuAey-NE

O.k... GuestZero was right. :-)

As the rest of the world realizes the fiasco Congress has made in the worldwide economy by bailing out Big Banking, stocks worldwide tank.

http://news.yahoo.com/s/ap/20081006/ap_on_bi_ge/as_world_markets

"Across Asia, all markets were in the red. Tokyo's Nikkei 225 index fell to its lowest level in 4 1/2 years, sinking 4.25 percent to 10,473.09.

Hong Kong's Hang Seng index slid 4.3 percent to 16,927.87. Markets in mainland China, Australia, South Korea, India, Singapore and Thailand also fell sharply.

In Russia, the RTS stock index tumbled more than 7 percent in first 20 minutes of trading."

Don't blame me,
I didn't vote for a
socialist.

http://money.cnn.com/data/markets/dow/

Fueled by MAJOR selloffs of American stocks by foreign markets.

However, the good news, foreign countries are now being dragged into the American recession and money crunch also.

Don't blame me,
I didn't vote for a
socialist.

Where is this magic that was supposed to happen now that the spinless hacks of Congress sold out the American taxpayer for 3/4 of a TRILLION dollars?

Wasn't this sell-out to the fat cat banking lobyists supposed to help?

Watch for the Dow to drop below 9000 by Wednesday.

Then watch as the layoffs begin. by Friday.

Don't blame me,
I didn't vote for a
socialist.

Fueled by the guarantee that mommy government will put taxpayers on the hook for the bad loans, Wall St. is bailing out of two more mortgage houses.

Since this morning, Prime Group Realty Trust has lost 1/2 it's vaiue and Federal Home Loan Mortgage Corp is approaching 1/2 it's value lost.

PGEPRB Prime Group Realty Trust 2.60 -2.90 -52.73% 29,300
FREPRH Federal Home Ln Mtg Corp 1.53 -1.06 -40.92%

All the banks, homeowners and rich people are thanking the American Taxpayers for buying them out of all these bad investments. Meanwhile, more companies go under as people cash in on the mommy government guarantees.

Don't blame me,
I didn't vote for a
socialist.

Prime Group is a Real Estate Investment Trust, or REIT and is a OTC stock as well. The value of that company is in the assets owned by the group and their ability to keep those buildings full. Toledo-based Health Care REIT, which just purchased Dana's headquarters, is a similar company, but deals with nursing homes and medical facilities. They don't issue mortgages, buy mortgages, or trade CDOs. 

The Federal Home Loan Mortgage Corportation is better known as Freddie Mac. The stock symbol for Freddie Mac was FRE, but since the government took it over, it trades under the OTC symbol of FREPRH. How much more on the hook can we be? BTW, Freddie Mac finished the day at 2.58, down 0.38% on the day. 

---------

"Show me a man who lives alone and has a perpetually dirty kitchen, andfive times out of nine I'll show you an exceptional man." -CharlesBukowski

There's a city full of walls you can post complaints at

The DOW was down about 25% Year To Date.

Make sure you thank Congress for helping the fat cat Big Banking Cartel by giving giving the fat cat Big Banking Cartel YOUR money!

That is your retirement that is circling the bowl while Big Banking, along with Congress in it's pocket, saps you dry.

Don't blame me,
I didn't vote for a
socialist.

(Hopefully all this boldface will turn off here.)

The next crashes to happen involve the following:

1. Bank failures. There's not enough money to stop all of them. The Communists in the Congress can't bail them all out.

2. Many more foreclosures. The number of people losing their right to rent money from a bank, will continue to rise with only minor easing of the rate. There's not going to be enough "adjustments" to compensate for the tsunami of Alt-A mortgage resets set to arrive in the 2009-2010 timeframe. Schiff et al have long warned us about that reset schedule. Anyone who claims not to know about it, is just ignorant or in denial.

3. Big drop in hiring causes big spike in official unemployment. Depression-era unemployment must rise to about 20%, so the official rate can only hide about 1/3rd of that ... count on official figures in the 10% to 13% range.

4. Defaults on commercial lending finally arrive in a huge swell that the media will claim was "unforeseeable". Well, I'm telling you to expect it, so that will just be more lying on the part of the media and officials. All those fucking strip malls don't have enough customers to make good on the debt incurred to construct and operate them. By then, no real bailout energy will be left. A lot of commercial properties will go empty, and then as the wave crests, there won't be enough plywood purchased to properly secure them. Count on squatters, fires and meth labs.

5. Finally, a truly disastrous wave of pension defaults will happen, and the government will try to actually bail those out. I can even begin to speculate on how the failure to bail those will affect the American people. Personally, I'm hoping the shooting will finally begin that we've so long put off in this nation of masters and slaves.

investment play into this? Will they quit investing in our tax policy (where we spend more than we take in through taxation)? Or will this be the end of programs such as Medicare and Social Security? Is it time to let all those who are retired fend for themselves? What do they contribute to the economy (besides consumption of necessities)? Is the "lifeboat" big enough or can it support only "consumers" who live beyond the necessities?

Old South End Broadway

OSEB, Medicare is on the ropes, and SS is effectively over anyway. You should count on those programs being pared down bit by bit over the next 30 years. I'm due to retire in about that time, and I have a realistic view that there's going to be next to nothing there for me.

As for foreigners and out national debt, just look around. Does it LOOK like we're in control of our economy? No. The Chinese especially need up to buy up their production. That's why the nation has been transformed into one huge strip mall. Mercantilism has reached insane heights in our culture.

It's time for the retired and soon-to-retire to face facts:

1. Energy costs and medical costs are going to eat you alive. PLAN.
2. Downsize your house. Don't expect us to make you a millionaire over it, either. It's not a stock certificate -- it's a fucking PLACE TO LIVE. Myself, I'll give you $30000 for it, and you can just fuck off somewhere else.
3. Are you still paying on a mortgage? Other than being a fucking moron for that, you should get out of that debt load.
4. Your credit cards should be GONE.
5. Still supporting your kids? Are you fucking kidding me?!?! Your kids are in their 20s and 30s. GET RID OF THE LAZY LITTLE FUCKERS. Either make the little bastards pay rent or kick them to the roommates zone.
6. Get rid of that big boat of a car. Do you LIKE paying $4 a gallon or something? Get a "rice burner" with a good heater.
7. Don't try to come back to work. You're only taking a job away from your kids. You had your 40 years of work. You should have saved money then. Step aside and live within your means.

Retirement accounts have lost $2 trillion
By JULIE HIRSCHFELD DAVIS, Associated Press Writer

WASHINGTON - Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.

The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers' savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.

http://news.yahoo.com/s/ap/20081007/ap_on_bi_ge/meltdown_retirement

MY GOD! WTF HAPPENED 15 MONTHS AGO THAT STARTED ALL THIS? Hmm, only thing I can remember is Democrats taking over Congress in Jan of 07. Isn't that a little over 15 months ago? OK, more like 21 months ago, but this DID NOT happen on the Republicans watch.

Don't blame me,
I didn't vote for a
socialist.

This crash is BI-PARTISAN. Such a crash is years in the making. "Years" must include the combined and dysfunctional might of the Republican Presidency and Congress of 2001-2006.

Remember that the Great American Housing Bubble was built solidly under the watchful eyes of that Republican primacy. The Republican President sat on his hands while his regulators allowed the banks to "innovate" themselves into a multi-trillion-dollar hole.

Don't discredit yourself by insisting that the Democrats are SOLELY responsible for this crash. You man McCain isn't going to fix any of it, like Obama isn't going to either. Both voted YES on that bailout bill. Both men are completely corrupted by corporate money.

It can't be fixed, just ENDURED. No major party is willing to apply fix actions ... so by extension, the vast majority of Americans aren't willing, either.

... that a 401(k) and other such accounts are NOT ACTUALLY MONEY. Savings should be MONEY. You middle class fucks keep playing like you're little Donald Trumps, but you're not rich and 95% of you never will be rich. Stop pretending you'll be rich, you delusional assholes!

Save money as money. Those CDs pay a modest return but are 100% guaranteed not to lose capital value.

The return on investment for a more fuel efficient car or furnace is a lot better than all this stock nonsense. When will the middle class wake up from the dream of riches in order to recall this fact?

Fed to buy massive amounts of short-term debt
Tuesday October 7, 11:36 am ET
By Jeannine Aversa, AP Economics Writer
http://biz.yahoo.com/ap/081007/financial_meltdown.html?.&.pf=banking-bud...

"Invoking Depression-era emergency powers, the Fed will buy commercial paper, a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls."

Looks like I called that by a few hours in advance. Of course, I've been talking about the coming Commercial Lending crash for about a year.

The government is now pulling out all the stops to keep the so-called economy humming until the election. We're all going to pay for that with a good DECADE of unnecessary recession and depression. Think about that. 10 years of lower- and middle-class suffering JUST to re-elect ONCE a pack of thieving little liars in the Congress.

The DOW dropped another 500+ points today on it's freefall into the basement.

http://money.cnn.com/data/markets/dow/

Looks like the magic 8000 number is coming up fast. Thanks to Congress for spending $700 Billion of taxpayer money to turn our 401Ks into worthless black holes. Now we can't afford to retire and end up owing the government 3/4 of a Trillion dollars. Looks like Congress has guaranteed Social Security by making everyone WORK UNTIL THEY DIE.

Meanwhile, AIG execs are celebrating the taxpayer donation and bailout of their bankrupt company by taking a $443,343 vacation!

http://airamerica.com/blog/2008/oct/07/aigs-44334371-vacation

Don't blame me,
I didn't vote for a
socialist.

As predicted.

http://money.cnn.com/data/markets/dow/

And will keep falling past 8000.

Don't forget to thank your Congressperson and remember to vote for the incumbant. They are, after all, the ones who approved the AIG, Fannie Mae, Freedie Mac and banking welfare package that you are paying for.

Don't blame me,
I didn't vote for a
socialist.

BORROW MORE MONEY.

Massachusetts looks into federal aid
http://money.cnn.com/2008/10/05/news/economy/massachusetts_aid.ap/index....

California is trying it, and now Massachusetts is. Essentially all the states are loaded up with foolish liabilities, primarily things like benefits for unionized labor and promises to support their local construction mafias with unnecessary public works.

Toledo and Ohio are going to follow eventually, but trying to borrow huge amounts of money. I predict Ohio bonds will be directly marketed overseas, and Ohio muni packages will follow once those waters are tested.

If Ohioans truly held to Republican principles, we'd summarily FIRE all the unionized employees of the state and re-hire non-union workers from our legions of private employment agencies. Each new employee will be given a 6-month eval period to prove she can perform, and if so, then she will then be hired AT WILL and can look forward to getting about the state's median income for as long as she can fulfill the job requirements. Pension? HAH! Here's your 401(k) contribution and you'd better invest it wisely (i.e. very conservatively, including moving it into a simple bank account).

My grandfather had some land he could fall back on. It was small but it could support himself, a wife, and four children. It was about five acres. Between that and working seasonally in the forest they could get by (but the "government" also supplied "commodities"). Where are the farms we can fall back to? They aren't there because the government encouraged bigger and bigger farms.

Old South End Broadway

There's a modest house built on an acre of land on Heatherdowns near Reynolds. It's being auctioned off as a part of all that Westhaven bullshit. You can raise a lot of food on that acre. Bid on it; nobody's stopping you. Of course, you'd have to bring MONEY along with you. And that's exactly the trouble; too many people committed all their income to payments on stupid shit just to feel like they were rich. So they have no money; on the contrary, they have instead huge debts (since payment systems are largely DEBT systems).

Land is a good thing. But the last I saw, too many people didn't want land. They only wanted a hyperexpensive McMansion on top of some soil. They hated trees, too. How many times have you watched people hack down trees just because they were in the way? How many times have you watched people get rid of FRUIT TREES simply because they "didn't like the mess"? It happens too often. So we only converted ourselves into slaves of the energy companies (to cool our houses now exposed to a lot more open sunlight) and large grocery stores.

Once people realize they are actually POOR instead of being little Trumps like the idiot box urged them to, then we'll see a sea change in people's behavior. People will return to having gardens and compost heaps. Families will stop sending both parents to work, since a house plus kids plus garden requires too much labor on top of the "two income household". I welcome that. We should have NEVER gotten rid of such landed sensibilities.

... and welfare is shameful and encourages dependencies.

But some people given welfare are utterly shameless:

AIG execs' retreat after bailout angers lawmakers
http://ap.google.com/article/ALeqM5iCBEplezRU4MUlI3wKRd0IZ9GCgQD93M2CP00

These crooks took the bailout money and then continued living high off the hog.

Notice that no bailout provision demands that these thieves be paid anything less than their Robber Baron salaries.

When are we going to fire the so-called representatives that allow all this theft to happen?

Now it will just keep falling until we are all riding bicycles to work. Our homes and businesses will be worth nothing. What we should do is repeal all the laws that prohibit free commerce, including the smoking ban. Anything to prop up the economy. Do you think the geniuses in Columbus could figure that out? Probably not.

Do it now!

Ohio will need more tax money to keep up with the growing demands of unemployment!

Carty also must raise taxes now! To cover the bumbling $7 Million dollar addition error in the Toledo budget!

HURRY Democrats! Raise taxes now!

Don't blame me,
I didn't vote for a
socialist.

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