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These are my thoughts tonight on the current outlook for the economy.
While I am thrilled that the stock market rallied today,
the rest of the news, the news about the auto industry and news from Treasury Secretary Paulson the last 7 days (Basically saying he is done with the TARP rescue, not going to do what he said he would do originally, namely buy up the toxic assets, the White House and FDIC at odds with the FDIC women (sorry I forget her name) who posted the way to fix the mortgage mess on the FDIC website recently, she is the one that successfully worked on salvaging Indy bank mortgages at the FDIC the last few months, and she tested the plan which is working, but her boss, Bernanki, GWB and Paulson don't want to promote or use her plan and Paulson has basically said this week he is done for the year, and leaving the job to the incoming administration (the news I just recited came out last weekend and this week in lots of various pieces).
That is what we have heard instead of getting confidence building news from Washington, and has thus again destabilized the banking system, and stock markets. That news of the last few days which seems to have led to an impending fall of Citi bank now, this weeks world wide renewed stock market crashes, all indicate to me that Washington is unable and unwilling to act quickly enough and to spend enough, fast enough to solve the problem. I just read there won't be any, nada, zero, zilch, stimulus package this year, after weeks of news about plans for one. I had high hopes they would pass something to try and stimulate consumer Christmas spending, but that seems to be dead now.
I suspect that Citi Corp (bank), Hartford Insurance, and probably a few more will be sold, or dead in the street next week alone, on Treasury life support or sold this weekend. I also suspect that the Big 3 will be toast by year end, and that unemployment will jump to at least 15% next year, that state governments will go belly up, and so on. Washington just does not get it, and by the time they do get it, it is too late, the damage has already been done. What I don't get is how they fail to realize that what the world needs right now is confidence, and not all the political back and forth of hourly press conference releases saying we have a deal one minute, and no deal the next, which only helps destroy confidence even faster. Fragile markets like we have world wide right now need every bit of confidence they can get.
Like I said it's change the oil and filter now or the engine tomorrow, and Washington is just too dense and slow to get it. Unfortunately by early next year they won't have a Detroit left to even build them an engine.
They had no idea how far the Lehman Brothers Bankruptcy would reach (asleep at the regulatory wheel again) and they don't seem to realize how far the systemic looses will go when the Big 3 go under, and take out the suppliers to the suppliers to the suppliers..... that are in the value chain, along with millions of jobs, and the banks and retirement accounts holding all their debt, or the jobs of people whose jobs depend on the money spent by those who will loose their jobs. I wonder what happens when GMAC financing goes under with Chrysler and GM? What a pleasant thought that is.
It is a shame that a degree in economics is not required to run for public office in Washington, or even an IQ test or common sense test. But I guess if they had any common sense they would not be in Washington anyway.
I heard tonight, that France (the heavily regulated economy, France, yes the one that we make jokes about, is the only country left in Europe with a positive GDP in the third quarter this year. Them and China (or perhaps I should say Asia), I think are the two remaining economies that had positive growth, one a mix of capitalism and communism, the other labeled as heavily socialistic. In other words, both have much more government involvement in regulation and the economy than we do.
I am afraid it will be all over before Obama even gets into office. It may be 2020 before the world gets back to where we were. Oh, and starting a war won't do us any good this time to get out of this recession/depression, we already have 2 under way.
In closing, I hope and pray I am wrong.
While I am thrilled that the stock market rallied today,
the rest of the news, the news about the auto industry and news from Treasury Secretary Paulson the last 7 days (Basically saying he is done with the TARP rescue, not going to do what he said he would do originally, namely buy up the toxic assets, the White House and FDIC at odds with the FDIC women (sorry I forget her name) who posted the way to fix the mortgage mess on the FDIC website recently, she is the one that successfully worked on salvaging Indy bank mortgages at the FDIC the last few months, and she tested the plan which is working, but her boss, Bernanki, GWB and Paulson don't want to promote or use her plan and Paulson has basically said this week he is done for the year, and leaving the job to the incoming administration (the news I just recited came out last weekend and this week in lots of various pieces).
That is what we have heard instead of getting confidence building news from Washington, and has thus again destabilized the banking system, and stock markets. That news of the last few days which seems to have led to an impending fall of Citi bank now, this weeks world wide renewed stock market crashes, all indicate to me that Washington is unable and unwilling to act quickly enough and to spend enough, fast enough to solve the problem. I just read there won't be any, nada, zero, zilch, stimulus package this year, after weeks of news about plans for one. I had high hopes they would pass something to try and stimulate consumer Christmas spending, but that seems to be dead now.
I suspect that Citi Corp (bank), Hartford Insurance, and probably a few more will be sold, or dead in the street next week alone, on Treasury life support or sold this weekend. I also suspect that the Big 3 will be toast by year end, and that unemployment will jump to at least 15% next year, that state governments will go belly up, and so on. Washington just does not get it, and by the time they do get it, it is too late, the damage has already been done. What I don't get is how they fail to realize that what the world needs right now is confidence, and not all the political back and forth of hourly press conference releases saying we have a deal one minute, and no deal the next, which only helps destroy confidence even faster. Fragile markets like we have world wide right now need every bit of confidence they can get.
Like I said it's change the oil and filter now or the engine tomorrow, and Washington is just too dense and slow to get it. Unfortunately by early next year they won't have a Detroit left to even build them an engine.
They had no idea how far the Lehman Brothers Bankruptcy would reach (asleep at the regulatory wheel again) and they don't seem to realize how far the systemic looses will go when the Big 3 go under, and take out the suppliers to the suppliers to the suppliers..... that are in the value chain, along with millions of jobs, and the banks and retirement accounts holding all their debt, or the jobs of people whose jobs depend on the money spent by those who will loose their jobs. I wonder what happens when GMAC financing goes under with Chrysler and GM? What a pleasant thought that is.
It is a shame that a degree in economics is not required to run for public office in Washington, or even an IQ test or common sense test. But I guess if they had any common sense they would not be in Washington anyway.
I heard tonight, that France (the heavily regulated economy, France, yes the one that we make jokes about, is the only country left in Europe with a positive GDP in the third quarter this year. Them and China (or perhaps I should say Asia), I think are the two remaining economies that had positive growth, one a mix of capitalism and communism, the other labeled as heavily socialistic. In other words, both have much more government involvement in regulation and the economy than we do.
I am afraid it will be all over before Obama even gets into office. It may be 2020 before the world gets back to where we were. Oh, and starting a war won't do us any good this time to get out of this recession/depression, we already have 2 under way.
In closing, I hope and pray I am wrong.
