Obama - "Did someone say we need revenue...lets raise taxes on the rich-folk...I say can we raise taxes, YES WE CAN, let dance..." http://www.youtube.com/watch?v=LfaxV7acT4g
Karl Denninger explains this latest hoax in a recent entry on his site Market Ticker: "So what's going on here? Simple: An enormous number of banks are holding loans at or close to "par" that really aren't. They're holding mortgages at massively-inflated values, even on defaulted properties, and this is why you are not seeing more foreclosure sales - that is, why inventory is being held back. If they sell it the accountants will force recognition of the loss, which will render them instantly insolvent, but so long as they "extend and pretend" they are marking these loans way, way above recovery value. The upshot of this is that these firms' balance sheet claims on asset values are massively inflated, regulators know it, and they're intentionally ignoring it." Bingo! It's all 100% fakery conducted right under the nose of the Fed, the Treasury and the FDIC. How many hundreds of banks are being kept on life-support because the FDIC is down to its last few farthings and doesn't want to ignite a panic? Stay tuned. The banking system is insolvent and the fact that the politically-connected big banks talked their their friends at the Fed into pumping liquidity into equities so they could access the capital markets, doesn't change matters for the hundreds of local and regional banks that will be caught in next year's downdraft. Prepare for massive consolidation with G-Sax and JPM left to pick up former competitors for pennies on the dollar. FIRING UP THE PRINTING PRESS Keep in mind that Wall Street veterans knew from the very beginning that Bernanke's quantitative easing (QE) was a load of malarkey intended to justify keeping toxic asset prices artificially high while pumping trillions into the stock market. Here's former hedge fund manager Andy Kessler's analysis way back in May: "On March 18, the Federal Reserve announced it would purchase up to $300 billion of long-term bonds as well as $750 billion of mortgage-backed securities. Of all the Fed's moves, this "quantitative easing" gets money into the economy the fastest -- basically by cranking the handle of the printing press and flooding the market with dollars (in reality, with additional bank credit). Since these dollars are not going into home building, coal-fired electric plants or auto factories, they end up in the stock market. A rising market means that banks are able to raise much-needed equity from private money funds instead of from the feds. .....It's almost as if someone engineered a stock-market rally to entice private investors to fund the banks rather than taxpayers." (Andy Kessler "Was it a Sucker's Rally" Wall Street Journal) What a swindle. Bernanke's had a good go-of-it, juicing the market through the backdoor and concealing--as much as possible--who is still buying US Treasuries. (who knows; maybe it's the Fed buying its own paper offshore?!?) But what good will it do? The US consumer is broke; the tank is on empty. Household equity has declined by 94%, jobs are scarce, personal savings are rising, and families are cutting back and hunkering down. It will take a decade or more before household debt is whittled-away to a point where people can consume at pre-crisis levels. Another stock market bubble won't change a damn thing. This Depression is just beginning.
That's the sad part. Both market technicals and economic leading indicators are showing all the classic signs of a recovery. It is real, but it won't last long or "recover" to the levels it normally would. At best, we'll see a 1970s style sideways market and economy for a number of years
You still can't comprehend that the millions upon millions in job losses are not the cyclical recession type, but the permanent, structural type, huh?
Uh, no. The world didn't collapse when the huge horse-and-buggy industry and family farm all but disappeared. So-called "permanent, structural" job losses don't mean new jobs and industries can't be created to replace them. Read up on Schumpter's "creative destruction." The problem is this natural process will be completely stifled by Obamunism. Only "green jobs" in half-baked theories/industries will be encouraged...along with temporary "stimulus" projects. Lower corporate taxes, get rid of senseless regulations and jobs and capital will flow in your direction. I'm not holding my breath on that to happen, though.
You realize that Schumpeter's main thesis was that capitalism would slowly evolve into socialism over time? Schumpeter would have a hard-on for Obamonomics if he was alive today. Better re-read the book http://www.amazon.com/Capitalism-Socialism-Democracy-Joseph-Schumpeter/dp/0061330086
I'm simply talking about the theory as it's popularly undersood--I'm not pushing Schumpeter beyond that.
Gotcha! I was brain washed during the mid 90's in college with the whole "creative destruction" theory, so I was a big fan of him until I read the entire book ("Capitalism, Socialism, and Democracy" ) for one of my senior econ classes. Boy was that disappointing. Aside from the poor read, which was mostly due to bad German-to-English translation, I was struck by his communistic mind-set. I walked away thinking that the only difference between him and Marx was this: Marx thought that Capitalism would be over thrown violently, while Schumpeter thought that the transition would be smooth.
Name just ONE new industry that is on the forefront. And don't even bother saying clean energy as those industries have been active prior to the crisis and took a big hit.