What is wrong with the US economy? Part 2

[jal]

Problem #1
I assume that you did read my previous posts.
Problem #2

Are the market corrections due to rebalancing and reflecting the accumulated transactions costs? (Every 5 – 7 years)

=======
http://en.wikipedia.org/wiki/Zero-sum
Economics
Many economic situations are not zero-sum, since valuable goods and services can be created, destroyed, or badly allocated, and any of these will create a net gain or loss. Assuming the counterparties are acting rationally, any commercial exchange is a non-zero-sum activity, because each party must consider the goods s/he is receiving as being at least fractionally more valuable to him/her than the goods he/she is delivering. Economic exchanges must benefit both parties enough above the zero-sum such that each party can overcome his or her transaction costs.
========

7.5 million homeowners 'underwater'

The report on the growing problem of negative equity is a conservative estimate. Some organizations, including Moody's Economy.com, estimate that as many as 12 million borrowers may be underwater.

“If the lunch truly is free, the demand for free lunches will be large,” said Paul McCulley, a managing director with the investment firm Pimco.

-----
Would you expect to get a bail out if you bought a new car? After all you are 'underwater' as soon as you drive it off the "lot".
jal

insert:
I just got this from another blog. Any comments?

"...I run various websites for people in foreclosure and whatnot. Until just a month ago, it was lender policy not to grant a homeowner a modified loan unless the homeowner met certain criteria...Most loan mods fail. In that the homeowner fails to make the new payment also. So lenders were not eager to modify a loan and go through the expense and time, and have the borrower reneg. Well, as of about 3 weeks ago, this has all changed. Lenders are eager to modify any loan regardless of the probability that the homeowner will meet the new obligation. Most of the old loan mods failed. What chance do the new ones have, in this new "anything goes" climate? The US is dictating lender policy outright..."

 

[mgb_phys]

An airline pilot who lives outside Norwich, Conn., Mr. Lawrence has a traditional 30-year mortgage that he has no trouble paying every month. But, thanks to the plunging real estate market, he owes more on his house than it is worth, like millions of other people.

“Why am I being punished for having bought a house I could afford?”

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?
Or he was gambling that it would go up in value and he would make a profit = tough.

His employer could probably get a better deal on 737s now than when they bought them and they probably wished they hadn't locked into fuel contracts at $100/barrel. Perhaps they deserve a bailout as well.

 

[mheslep]

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?
Or he was gambling that it would go up in value and he would make a profit = tough.

His employer could probably get a better deal on 737s now than when they bought them and they probably wished they hadn't locked into fuel contracts at $100/barrel. Perhaps they deserve a bailout as well.

Great point mgb

 

[Astronuc]

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?
Or he was gambling that it would go up in value and he would make a profit = tough.

His employer could probably get a better deal on 737s now than when they bought them and they probably wished they hadn't locked into fuel contracts at $100/barrel. Perhaps they deserve a bailout as well.

It doesn't say when the house was purchased, but perhaps it was purchased recently. I have a colleague in that town, where a major employer closed down. Another major employer in the region also closed. Both resulted in the loss of high paying jobs, which also supported a lot of lower paying jobs. The region has not fully recovered in 15 years. They do have a casino, but those jobs pay much less than many of the jobs lost.

The president of the company where I used to work told my friend and colleague that he should just sell the house and take a loss. Well - if he did that, he probably would have still owed money on the loan, and he'd be without a downpayment.

I'm not sure what the government is proposing in terms of helping those in foreclosure, but there are many who have acted responsibly, yet they find that there house has devalued along with the rest of the housing market. So in that sense, Mr. Lawrence may feel he is being punished. It's not clear that he gambled on the market appreciation.

 

[edward]

Being punished? He paid what he thought the house was worth.
Either he wanted somehwere to live and this was a reasonable deal - in which case what has he lost?

Was it a reasonable deal or the only deal?? The life of a mortgage is a long time for individuals to have pay for failed government policy and lack of oversight.

At the same time he has to pay to bail out the bank that caused his problem.

Sure some people made some poor choices, but that doesn't categorically mean that all people who bought a home in the past three years made a poor choice. Most didn't even have a choice.

 

[Office_Shredder]

As long as he's not planning on selling his house, it'll rise in price again in a couple years and he'll be fine

 

[mheslep]

Was it a reasonable deal or the only deal?? The life of a mortgage is a long time for individuals to have pay for failed government policy and lack of oversight.

At the same time he has to pay to bail out the bank that caused his problem.

It is quite a stretch to say that 'the bank' caused his problem. Mortgages were, and still are, widely available in the US from a wide range of lenders.

 

[Office_Shredder]

Furthermore, the bank isn't the one that decided on the price he'd buy the house for.

 

[edward]

Furthermore, the bank isn't the one that decided on the price he'd buy the house for.

No and neither was the buyer because he had no choice.

The loan writer was willing to loan what the buyer had to pay because an appraiser wanted to please the realtor and the realtor wanted to please the loan writer.

Then the loans were packaged and given a bogus credit rating by companies who wanted to please investment bankers.

As the CEO of Moody"s stated: "We drank the kool aid", and they made millions doing it.

As aresult 40% of the mortgages in the west and southwest are now underwater. People are locked in and can't get out even if they need to move for a job change.

But go ahead and blame it all on the little guy.

 

[Proton Soup]

http://www.tradingmarkets.com/.site/news/Stock%20News/1927757/

Testifying before the U.S. House Oversight and Government Reform Committee, Dinallo faulted provisions of 2000's Commodity Futures Modernization Act that exempted so-called "naked" credit default swaps ? those in which the holder has no direct exposure to the named credit event ? from state gaming laws. Without direct oversight by securities, commodities or insurance regulators, the massive growth of the unregulated CDS market, from $900 billion in 2000 to an estimated $58 trillion today, lay at the heart of the financial crisis now gripping global markets, Dinallo said.

 

[Office_Shredder]

the realtor wanted to please the loan writer.

Maybe the realtor just wants to make more on his commission. I don't think realtors are going around thinking "I got to sell this house for more so bank of america can give a larger mortgage out"

 

[jal]

There goes more of your money/savings
http://online.wsj.com/article/SB122542331644887249.html?mod=googlenews_wsj
• OCTOBER 31, 2008
Banks Owe Billions to Executives
The Wall Street Journal By ELLEN E. SCHULTZ
Financial giants getting injections of federal cash owed their executives more than $40 billion for past years' pay and pensions as of the end of 2007, a Wall Street Journal analysis shows.
The government is seeking to rein in executive pay at banks getting federal money, and a leading congressman and a state official have demanded that some of them make clear how much they intend to pay in bonuses this year.
But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what ..

 

[edward]

Maybe the realtor just wants to make more on his commission. I don't think realtors are going around thinking "I got to sell this house for more so bank of america can give a larger mortgage out"

Time for a reality check Shredder. The higher the price the higher the realtor's commission. There were kick backs, free trips and all kinds of chicanery going on. Inflating the sales price so that the all parties could get a kick back was very common. (Google is your friend)

That doesn't negate the fact that honest buyers have been stuck with upside down mortgages for the foreseeable future.

The scammers walked, the credit rating companies were scolded by the Congress, and the investmewnt bankers are being bailed out. The honest people were left holding the bag.

 

[Office_Shredder]

Time for a reality check Shredder. The higher the price the higher the realtor's commission. There were kick backs, free trips and all kinds of chicanery going on. Inflating the sales price so that the all parties could get a kick back was very common. (Google is your friend)

That doesn't negate the fact that honest buyers have been stuck with upside down mortgages for the foreseeable future.

The scammers walked, the credit rating companies were scolded by the Congress, and the investmewnt bankers are being bailed out. The honest people were left holding the bag.

I just said the realtor was trying to get a higher commission. I looked on google, and the first couple hits had nothing to do with realtors getting kickbacks from banks for getting them larger mortgages; considering the realtors already had a financial interest in doing this, I'd think it pretty unnecessary for the banks to pay them more also. If you can show me proof that this was common I'm willing to change my mind. Until then, claiming it's the bank's fault that the person needed a higher mortgage is based in pure speculation in my mind

 

[misgfool]

As a non-US citizen I could describe some fundamental problems that I see in US economy with facts provided by local news. I have no doubt that in the short term US will bounce back up (with bold actions of FED & UST) so these are long-term aspects. My interest in US comes from the fact, that my safety (job, civil rights, military, etc.) is directly dependent in the health of US. Also europeans are completely scattered and seem to be mostly focused in fighting with themselves and at least for the foreseeable future are quite useless. Anyway couple of things that came to mind.

1. This idea of shifting from production to service-oriented business structure.

Not only a national security threat, but how can you keep generating more and more services? If you produce a product you can always keep doing them and there are not practical limitations of producing them in the future as you can recycle the previous generations. You also always need products to live, but services are only an extra luxury. However, when you provide a service you can't scrap it after it has been used. Maximum amount of service providers is limited by the population cap. Not to mention the fact that it is a lot easier to outsource a service than production of material. So a service culture can disappear almost overnight.

They have already begun to preach in my company too that, growth is in focusing more in services. What is the end point of this cycle? Everyone serves each other?

2. Government subsidies to existing corporations and the idea of something being too big to allow to collapse.

No it isn't. Maybe with the exception of the entire financial sector. If it's too big then why was it allowed to form in the first place? Only emerging technologies and industries should have access to public funds.

For example American automobile industry was a forerunner in the first half of the twentieth century. These days it's technologically backward compared to just about every auto producing country by almost any standard. Now seeing a Ford on the street is a interesting curiosity. It must be already more than five years, since I last saw any other US brand vehicle with the exception of maybe two humvees. I actually had to look from the web what are the other brands. Why is it that there is so high effort from the government to keep the industry in artificial respiration?

 

[edward]

I just said the realtor was trying to get a higher commission. I looked on google, and the first couple hits had nothing to do with realtors getting kickbacks from banks for getting them larger mortgages; considering the realtors already had a financial interest in doing this, I'd think it pretty unnecessary for the banks to pay them more also. If you can show me proof that this was common I'm willing to change my mind. Until then, claiming it's the bank's fault that the person needed a higher mortgage is based in pure speculation in my mind

You are talking about a direct kick back from a bank to a realtor and that is not what I mentioned. I mentioned the loan writers aka mortgage companies. Countrywide is a good example.

It wasn't just Realtors involved, and I mentioned only loan writers, not banks. Mortgage writers, Realtors, and appraisers plus title companies were all involved. in kickbacks.

The banks involved were the big investment banks that failed.
Once the loans were packaged ratings companies such as, Standard and Poors and Moodys were giving AAA ratings on sub prime mortgages. Like the CEO of Moodys said; "We all drank the kool aid"

First hit on Google realtor kickbacks:

In one case, HUD forced TitleVentures.com, a title insurance agency based in Kingsport, Tenn., to close 36 affiliated title corporations because they existed solely to funnel illegal referral fee payoffs, according to HUD. The government charged that Jerry D. Holmes, Jr., principal owner of TitleVentures.com, "established dozens of sham title insurance companies for the purpose of paying kickbacks to real estate and mortgage brokers in five states." The alleged sham corporations in North Carolina, South Carolina, Tennessee, Georgia and Ohio "had few or no employees, no office space, and did little or no title work" -- all in violation of RESPA’s ban against unearned referral fees, according to HUD.

http://realtytimes.com/rtpages/20030825_respa.htm

More:

http://www.fraudguides.com/mortgage-closing-fees-kickback.asp

http://www.realestatejournal.com/buysell/markettrends/20070528-hagerty.html

http://www.lieffcabraser.com/news_articles/2008/20080809-propertyid.htm

This is getting off on a tangent to the topic.

 

[jal]

Keeping up the IMAGE. The finance is coming from YOUR savings.

http://www.ft.com/cms/s/0/a7f6cf94-a78a-11dd-865e-000077b07658.html
JPMorgan to freeze foreclosures
By Francesco Guerrera and Saskia Scholtes in New York
Published: October 31 2008 20:51 | Last updated: October 31 2008 20:51

…. $70bn of mortgages and freeze foreclosures for up to three months.
The measures are expected to stave off the threat of home repossessions for 400,000 families by cutting their mortgage bills through reductions in interest rates or principal repayments and other loan modifications.
Citigroup revealed it had launched a similar programme of loan modifications last month. Citi said the programme, which did not involve an automatic halt to foreclosures, could eventually be extended to up to 100,000 homeowners owing some $20bn in mortgages.
Bank of America also said last month it would modify mortgages for almost 400,000 borrowers with home loans from Countrywide, the mortgage lender it acquired this year. The decision was part of a deal with several state attorneys-general to resolve claims against Countrywide.

Keeping customers in their homes and receiving monthly payments – albeit at a reduced rate – would benefit both the company’s image and its finances, they said.

 

[OmCheeto]

As a non-US citizen I could describe some fundamental problems that I see in US economy with facts provided by local news.

Do your local news agencies have internet feeds? Aside from NPR, our news agencies suck.

1. This idea of shifting from production to service-oriented business structure.

What is the end point of this cycle? Everyone serves each other?

I agree. Where would we get our flat screens?

2. Government subsidies to existing corporations and the idea of something being too big to allow to collapse.

No it isn't. Maybe with the exception of the entire financial sector. If it's too big then why was it allowed to form in the first place? Only emerging technologies and industries should have access to public funds.

For example American automobile industry was a forerunner in the first half of the twentieth century. These days it's technologically backward compared to just about every auto producing country by almost any standard. Now seeing a Ford on the street is a interesting curiosity. It must be already more than five years, since I last saw any other US brand vehicle with the exception of maybe two humvees. I actually had to look from the web what are the other brands. Why is it that there is so high effort from the government to keep the industry in artificial respiration?

Again, I agree. I used to preach about "the economies of scale". But working for a large company, I can see breakdowns in communication between the top and the bottom. Things can become so disconnected that the head will cut off it's feet because it thinks they are an unnecessary expense.

I cannot even imagine how our auto industries function. They remind me of freight trains. Once you get them going, it takes them forever to stop.

http://www.hoovers.com/free/
Ford: 246,000 employees
GM: 266,000 employees
Chrysler: 72,000 employees

Tesla Motors Inc: 250+ employees​

And like our current financial community, I can only seeing it get worse. Eventually, we will end up with only one bank, one auto company, one of everything. Much like the Microsoft juggernaut. And I'm surprised they won't let Murdoch own every news media in the world. Wait a minute, maybe that's why they all suck. He does own them all.

Although I don't like to quote Wikipaedia as a source, I thought the "See also" section under the Sherman Antitrust Act said a lot about what is going wrong:

http://en.wikipedia.org/wiki/Sherman_Antitrust_Act
See also

* Alcoa
* American Bar Association
* American Tobacco Company
* AT&T
* Microsoft
* Northern Securities Company
* Ticketmaster
* Standard Oil
* Standard Oil Co. of New Jersey v. United States
* Tying (commerce)
* Antitrust
* Cartel
* Clayton Antitrust Act of 1914
* DRAM price fixing
* Monopoly
* Price fixing
* Resale price maintenance
* National Linseed Oil Trust
* laissez faire

 

[misgfool]

Do your local news agencies have internet feeds? Aside from NPR, our news agencies suck.

Our agency may have feeds, but as the original news are translated the original content seems to be quite distorted. Especially ones that concern US. The style is to typically predict some economical, civil or external disaster or otherwise bash US. It appears like the only good thing coming out of US is a road to somewhere else. However, practice has shown that US seems to be on the map even on the next day. So one just has to do some filtering when reading news. The problem is that a constant flow of bad news starts to grow roots in people.

And like our current financial community, I can only seeing it get worse. Eventually, we will end up with only one bank, one auto company, one of everything. Much like the Microsoft juggernaut.

That's the problem in Europe too. But I guess the national pride of politicians has so far prevented formation of massive conglomerates.

And I'm surprised they won't let Murdoch own every news media in the world. Wait a minute, maybe that's why they all suck. He does own them all.

I don't understand. I mean why don't you just call MacGyver to handle him?

 

[jal]

There are some smarter people than me saying the same thing that I have been saying.
http://www.bloomberg.com/apps/news?pid=20601069&sid=azH.b7NrSh3k&refer=fedwatch
Nobel Winner Aumann Says Bernanke, Paulson Steps `Not Smart'
Nov. 2 (Bloomberg)
The crisis in the financial markets was caused by the incentives provided to managers of banks and other financial institutions that caused them to act to their own benefit and not the banks', he said. Bonuses were given on the basis of loan sales, without considering who the borrowers were, he said.

 

[Astronuc]

US Treasury wants to borrow record 550 bln dlrs
http://news.yahoo.com/s/afp/20081103/pl_afp/financeeconomyustreasury

WASHINGTON (AFP) – The US Treasury said Monday it would seek to borrow a record 550 billion dollars in the October-December period to help stabilize the financial sector hammered by the global credit crisis.

The fourth-quarter borrowing estimate was substantially higher than the 408 billion dollars announced in July, and is a record high for quarterly estimates, a Treasury official said.

"The increase in borrowing is primarily due to higher outlays related to economic assistance programs, lower receipts, and lower net issuances of state and local government series securities," the Treasury said in a statement.

The Treasury said the federal government had borrowed 530 billion dollars from the markets in the third quarter. Of that amount, 300 billion dollars was borrowed for the Federal Reserve's Supplementary Financing Program, launched in mid-September in a bid to support the ailing economy.

In July the Treasury had estimated third-quarter borrowing at 171 billion dollars.

The escalation of worldwide financial turmoil in September and its growing negative impact on the US economy prompted US authorities to undertake an array of measures aimed at supporting banks and getting frozen credit flowing again.

At the same time, the credit squeeze reduced tax revenue from businesses and from households, which curbed spending in the face of rising unemployment and falling house values.

. . . .

Still borrowing.

 

[turbo]

Some amount of borrowing is required to maintain short-term liquidity in the face of downturns, but it is foolish to believe that we can borrow our way out of this morass. It's time that we had some actual conservatives directing our nation's finances - someone willing to take small doses of bad medicine from time to time instead of constantly borrowing and spending to protect business from any losses. That kind of short-sightedness (and the lack of meaningful oversight over the financial sector) is what got us into this mess in the first place.

 

[Astronuc]

Well the borrowing in this case is supposed to be 'invested', which in theory means it will earn more than borrowed. If it is buying equities (stock) that return may not be sure.

I'm left wondering what kind of return are they expecting and what will they really get.


It's also interesting that the Fed/Treasury make low interest loans to the very institutions that contributed to the current crisis. So in effect, the banks get cheap loans (~2-3%) from taxpayers and turn around and loan to the same taxpayers at higher interest rates (~6% for mortgages, or ~8-12% for consumer loans, or higher for sub-prime loans). Meanwhile the bankers get a nice bonus. There's something wrong with this picture.

 

[turbo]

It's also interesting that the Fed/Treasury make low interest loans to the very institutions that contributed to the current crisis. So in effect, the banks get cheap loans (~2-3%) from taxpayers and turn around and loan to the same taxpayers at higher interest rates (~6% for mortgages, or ~8-12% for consumer loans, or higher for sub-prime loans). Meanwhile the bankers get a nice bonus. There's something wrong with this picture.

It's pretty infuriating, actually. Taxpayers are forced to subsidize the banking industry with low-interest loans, to our own detriment. People who borrow to finance everything and have personal loans, mortgages, and lots of credit card debt may think that easy credit is a wonderful thing, but low-interest loans from our treasury to the banks suppresses the interest that banks are willing to pay ME for the use of my money. As someone who has saved all his life, I'm taking a double hit as my taxes subsidize the banks AND the banks cut the interest rates on my saving to the bone. There is probably nobody here with savings accounts, money market accounts, etc, that is getting enough interest to keep up with inflation and the cost of living. The constant erosion of personal wealth for the benefit of businesses is weakening our country.

 

[CaptainQuasar]

It's pretty infuriating, actually. Taxpayers are forced to subsidize the banking industry with low-interest loans, to our own detriment. People who borrow to finance everything and have personal loans, mortgages, and lots of credit card debt may think that easy credit is a wonderful thing, but low-interest loans from our treasury to the banks suppresses the interest that banks are willing to pay ME for the use of my money. As someone who has saved all his life, I'm taking a double hit as my taxes subsidize the banks AND the banks cut the interest rates on my saving to the bone. There is probably nobody here with savings accounts, money market accounts, etc, that is getting enough interest to keep up with inflation and the cost of living. The constant erosion of personal wealth for the benefit of businesses is weakening our country.

But - and I'm really asking this question, not simply being contrarian - aren't the low-interest loans to the banking industry what allows the Fed to keep a leash on the inflation rate and keep your investments from losing value to inflation even quicker? (Like the way that, for example, any life savings of Zimbabweans are now gone because of uncontrolled inflation there in the past decade.) Are you suggesting an alternate means of controlling inflation? (If you are, cool, I want to hear about it.)

⚛​

 

[turbo]

But - and I'm really asking this question, not simply being contrarian - aren't the low-interest loans to the banking industry what allows the Fed to keep a leash on the inflation rate and keep your investments from losing value to inflation even quicker? (Like the way that, for example, any life savings of Zimbabweans are now gone because of uncontrolled inflation there in the past decade.) Are you suggesting an alternate means of controlling inflation? (If you are, cool, I want to hear about it.)

⚛​

Low-interest loans to the banking industry make it possible for the banks to lend out my money and make lots of interest, while paying me little or nothing. The inflation bogeyman is way over-used. Where are the inflationary pressures? Are wages soaring, and increasing the costs of production? No.

If you want to control inflation, fight for universal health-care and a single-payer system. Health costs are rising faster than any other segment of the economy due to the insurance companies. Once you take the onus off employers to provide health insurance, a great deal of their overhead will be removed, and they can concentrate on their businesses. In addition, allowing formerly uninsured people access to preventive health care, will reduce the severity and treatment costs of preventable diseases.

 

[mgb_phys]

If you want to control inflation, fight for universal health-care

But then you could leave you low paying job with the risk of your children dying.
So it would lead to employers competing for workers in an open market and lead to wage rises. By keeping healthcare as a job benefit you keep the workers in the same position as medieval serfs.

 

[edward]

The good old boy system is alive and well on wall street. It is time to clean house at the FED.

WASHINGTON — The former chief risk officer at investment bank Bear Stearns Cos., which nearly collapsed in March, is now a senior official of the Federal Reserve division that supervises U.S. banks.
Michael Alix, who worked at Bear Stearns for 12 years and was its senior risk manager since 2006, was named a senior vice president in the bank-supervision group of the Federal Reserve Bank of New York, according to an announcement by the Fed.
The appointment is apt to raise questions because of the key role Alix played at Bear Stearns and given the Federal Reserve's role in Bear Stearns' sale to JPMorgan Chase & Co. after its breathtaking slide. In his new job at the central bank, Alix will help oversee the financial safety and soundness of banks, which are inspected by Federal Reserve examiners.

http://www.azstarnet.com/allheadlines/265669

 

[Jimmy Snyder]

The S&P 500 index hit a local bottom at 849 on October 27, just coinciding with news that even though he was behind in all polls, John McCain was closing the gap in some battleground states. They showed that he had less chance than a physicist at a homecoming social. This was a slight improvement over previous polls showing that he didn't have a snowball's chance in hell on a cold day in July where the sun don't shine on a rat's ass. While not much to work with, Wall street took this glimmer of hope and ran the S&P up to 1006 yesterday. A respectable 18% rise, just shy of a bull market in 6 trading days. Unfortunately, these hopes were shattered last night and the market went into a tailspin. This in spite of Obama's plan to end the war. I expect a boost to the economy as our soldiers stop bombing bridges in Iraq, and we bring these jobs back to America. Obama says this may not occur in the next year or two, but surely he will bring it about perhaps sometime during the Palin administration.

 

[lisab]

The S&P 500 index hit a local bottom at 849 on October 27, just coinciding with news that even though he was behind in all polls, John McCain was closing the gap in some battleground states. They showed that he had less chance than a physicist at a homecoming social. This was a slight improvement over previous polls showing that he didn't have a snowball's chance in hell on a cold day in July where the sun don't shine on a rat's ass. While not much to work with, Wall street took this glimmer of hope and ran the S&P up to 1006 yesterday. A respectable 18% rise, just shy of a bull market in 6 trading days. Unfortunately, these hopes were shattered last night and the market went into a tailspin. This in spite of Obama's plan to end the war. I expect a boost to the economy as our soldiers stop bombing bridges in Iraq, and we bring these jobs back to America. Obama says this may not occur in the next year or two, but surely he will bring it about perhaps sometime during the Palin administration.

Your protests fall on deaf ears, my dear mr snyder, because there is a volcano with your name all, all, all over it.

 

[LowlyPion]

I expect a boost to the economy as our soldiers stop bombing bridges in Iraq, and we bring these jobs back to America.

There are job openings here for bridge bombing?

 

[Jimmy Snyder]

There are job openings here for bridge bombing?

Financial institutions have been hoarding their cash, afraid to lend it to companies that may not be profitable enough to pay back the loan. Makes sense to me. Paulson is giving hundreds of billions to these institutions. They are skimming some 5 to 10 percent of that and funneling it directly into their own bonuses. The remainder goes right into the hoard along with the rest of it because none of this gets at the problem, fear of lending. You can make them richer, but you can't make them lend. Here is my proposal. Don't give any money to the financial institutions. Instead, fix the bridges. This kills three birds with one stone. It addresses unemployment since these are jobs that would not exist if we don't fix. It addresses the infrastructure problem, a real tough nut. It makes the bridge fixing companies profitable and so provides financial institutions with companies they can lend to. Some bridges may have to be dynamited in order to replace them. Bring the troops home.

 

[edward]

There are job openings here for bridge bombing?

Of course

 

[OmCheeto]

After hearing how honest this guy is, I'm a bit disappointed that he turned down the Chief Of Staff job:

http://www.c-span.org/video_rss.aspx?MediaID=38408
Sunday, September 28, 2008

Speaking to reporters following Sunday evenings House Democratic Caucus meeting, Rep. Rahm Emanuel said the caucus expected financial services legislation to stablize the financial markets and protect American taxpayers.

Mr President We Will FOREVER Be In Your Debt!

 

[Astronuc]

Vanishing jobs, stressed consumers feed downturn
http://news.yahoo.com/s/ap/20081107/ap_on_bi_ge/financial_meltdown

WASHINGTON – Ford Motor announced plans Friday for more layoffs, the latest in a vicious cycle of vanishing jobs and stresses on American consumers that is spelling deeper trouble for the already sinking U.S. economy.

In reporting that it lost $129 million in the third quarter and went through $7.7 billion in cash, the automaker also said it will cut another 10 percent of its North American salaried work force costs as it tries to weather the worst economic downturn in decades.

And more bad news was looming Friday.

• The Labor Department's unemployment report was expected to show net job losses for October to total about 200,000. The unemployment rate, now 6.1 percent, is expected to rise to 6.3 percent. If it does, it would match the highest unemployment rate that was logged after the last recession, in 2001. The jobless rate hit 6.3 percent in June 2003 and then started to drift downward.

• And General Motors was expected to release a gloomy earnings report for the third quarter.

All the economy's woes — a housing collapse, mounting foreclosures, hard-to-get credit and financial market upheaval — will confront President-elect Obama when he assumes office early next year. Obama has shifted from campaign mode to the task of building a new Democratic administration. A top priority will be quickly assembling his economics team, including the secretaries of Treasury, Commerce and Labor.

On the crucial jobs front, the situation is likely to move from bad to worse next year.

Employers have slashed jobs in the first nine months of this year. A staggering 760,000 losses have been racked up so far.

Many expect the jobless rate to climb to 8 percent, possibly higher, next year. In the 1980-1982 recession, the unemployment rate rose as high as 10.8 percent before inching down.

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Certainly this will be one of the most analyzed periods of American history, including what worked and what didn't.

Obama will do his part, but the American people must do theirs. The government can solve all the problems, many of which must be addressed by the people themselves.