>Massive deflation and unemployment will set in for a while,
>until the immutable law of supply and demand lowers the
>prices until supply=demand at the new level.
To slam in a change by jumping straight to where you want to end up creates exactly the kind of shock that can rip things apart like say for example, Saving & Loan institutions. Woah there cowboy! How about phasing in an adjustment like that so we don't end up with one step forward and two steps back?
Massive unemployment isn't necessary to repolarize the economy away from borrowing but it will ruin peoples finances, lives and physical and mental health as they end up homeless and starving. BTW, in the Great Depression, many unemployed people just ended up back on a relative's farm as an extra hand while today there is no equivelant safety net.
On the whole I agree we must wean ourselves off borrowing.
Not a bad idea on paper, at first. It would be nice but at the moment impossible. This was doable when we ran budget surpluses and paying down the debt. We can't even fund and operate Social Security correctly, let alone a government-owned equity firm!
Both the UAW and corporate management have eyed on the two largest financial burdens. Health care costs for its current and retired employees (you know beyond Medicare), and the pensions. Now they say the latter is fine, I'm calling bullshit on that. You can tell me they got the cash, but they also said they would turn the business around, so they aren't all that great in the credibility department. Unless you can get some sort of national health care plan in place within the next year, the UAW is going to have to realize that they will be in the health insurance business. If GM declares bankruptcy, all bets are off on any loyalty to the grand bargain they struck with the union; I suspect the UAW knows this as well.
The number I'm coming to, if you include even the ancillary industries, the dealerships, municipal jobs related to the industry, and so on....well we're talking about 5-6 million jobs. And that's being conservative, because the negative effect on the economy would actually be greater.
A preview of sorts....consider this, that tomorrow morning or the day after, GM declares it will go into Chapter 11. It could force the shut down of half it's production literally overnight. The UAW really would not have a say in this, as the company would be in receivership. All or a good chunk of the contracts to suppliers would be null and void. This would send a shock to their industries, which would lead to furhter closures and layoffs. These industries have suppliers as well, so they would go next.
Then you have the dealerships, some of whom have only one company-branded product line (say only Chevy and Buick). They are immediatly left scrambling to look for a new supplier of autos and financing. Some would be able to pull it off, many won't, not in this economic climate.
Bank Holding Companies were the the only way to go for J.P.
Morgan, Salmon Chase and countless robber barrons from the 1880s until Glass Steagul broke up banking and brokerage.
Clinton re-authorized brokers and banks to join in 1998.
It is so easy to predict and understand this crisis and its next wave. Put banks and brokerage together and there is a perfect formula for disaster.
Disaster has arrived at Merrill Lynch. In the 90's, Merrill moved more aggressively to blur the lines between bank and broker. Merrill should be the poster boy for this crisis. But what do AMEX and Sach do? Imitate Merrill, what else?
Once all non-bank brokers become deposit taking banks who may trade securities,the second and big wave of the Tsunami will be visible and rising offshore.
But before the Cramer SWF (he is from Goldman), or my idea of the Enterprise Fund. We should condsider what J. Venom says re Health & Penson
"
In comparison to say the Canadian Auto Workers (CAW), the UAW has to negotiate health benefits because there is no government solution. We live in a nation that does not provide a standard universal health care system. Secondly, in regards to pensions, the US government provides a pension system that today barely meets the needs of retirees. The membership of the UAW knows that Social Security is inadequate, and thus have to work from that point on forward. Perhaps instead the unions should have opted earlier on in taking over the pension system away from GM.
"
This is very true, in fact Toyota at one time manufactured the RAV4 in Mississippi but moved production to Canada, not because of the education, skills or the rest of the crap the reactionaries spout against U.S. labor, but due to the Canadian Health Care system!
The U.S. markets will not have a sustainable rally until General Motors is saved, Cramer said during Monday’s Mad Money.
Add Ford and Chrysler to that statement as well. GM’s
failing alone could cost the U.S. economy 3 million jobs – and that’s a lowball figure. Washington can funnel as much money as it wants into shoring up the credit markets, the other key to our present crisis, but what bank’s going to make loans to the unemployed?
If the auto industry fails, millions of people will miss mortgage payments and watch banks foreclose on their homes. Credit-card defaults en masse will follow. Consumer spending will come to a virtual stop. And Wal-Mart
and Family Dollar will continue to be the retailers of choice.
And all those losses in your 401(k) over the past couple of months? You won’t make that money back if GM and company go under. So if Hank Paulson and the Treasury, and Ben Bernanke and the Federal Reserve, so vigorously propped up the banks, then Cramer sees no reason why they shouldn’t do the same for the Detroit. It’s a sector as integrally important to the fate of the U.S. as any lender or insurer.
What is so important about this is a very entertaining stock picker guy who periodically goes ballistic on the Fed nails it. He gets that in the United States what we really have is trickle up consequences and if they continue to piss on manufacturing and the working/middle class, eventually that shit rolls upward and is going to hit Wall Street and the super rich where they live.
I usually watch Cramer for the entertainment value but today he said sacriledge to Wall Street, that working America will effect them badly...talk about truth to power.
it's testimony from one group, it's not law. So maybe the testimony also said IRAs but it's just a hearing, not even a bill has been introduced, much less passed.
If you are really concerned write your representatives and tell them not to do this.
I doubt such a thing would pass for taking half of retirement upon death, well, just no way is that going to be supported.
The reason why alcohol is taxed: because cash-poor hillbillies in the Southeast used to use whiskey instead of currency- and kept doing it even after "revenooers" were hunting "moonshiners" by night in the backwoods.
Makes me wonder if a good microbrewery would be a good investment today.
Because I wanted to get it at the quoted spot price- and by the time I was ready, was completely unobtainium at that price (and no, I wasn't willing to invest in "gold paper" from somebody claiming to hold gold and sell a share of it).
Right now, I'm looking for something "safe". And not finding it. I just don't have enough trust, enough risk tolerance, to do anything right now.
The first cut was a discussion of the target industries.
The second cut was what the investment vehicle could be.
The third cut is the drill down to the transactions.
The objectives are straightforward
- What are the industrial target assets
- What kind of fund should be used
- How to finance infrastructure without increasing the budget deficit at all
- What are the protections and guarantees on public finance
>Massive deflation and unemployment will set in for a while,
>until the immutable law of supply and demand lowers the
>prices until supply=demand at the new level.
To slam in a change by jumping straight to where you want to end up creates exactly the kind of shock that can rip things apart like say for example, Saving & Loan institutions. Woah there cowboy! How about phasing in an adjustment like that so we don't end up with one step forward and two steps back?
Massive unemployment isn't necessary to repolarize the economy away from borrowing but it will ruin peoples finances, lives and physical and mental health as they end up homeless and starving. BTW, in the Great Depression, many unemployed people just ended up back on a relative's farm as an extra hand while today there is no equivelant safety net.
On the whole I agree we must wean ourselves off borrowing.
Not a bad idea on paper, at first. It would be nice but at the moment impossible. This was doable when we ran budget surpluses and paying down the debt. We can't even fund and operate Social Security correctly, let alone a government-owned equity firm!
Both the UAW and corporate management have eyed on the two largest financial burdens. Health care costs for its current and retired employees (you know beyond Medicare), and the pensions. Now they say the latter is fine, I'm calling bullshit on that. You can tell me they got the cash, but they also said they would turn the business around, so they aren't all that great in the credibility department. Unless you can get some sort of national health care plan in place within the next year, the UAW is going to have to realize that they will be in the health insurance business. If GM declares bankruptcy, all bets are off on any loyalty to the grand bargain they struck with the union; I suspect the UAW knows this as well.
He's about spot on.
The number I'm coming to, if you include even the ancillary industries, the dealerships, municipal jobs related to the industry, and so on....well we're talking about 5-6 million jobs. And that's being conservative, because the negative effect on the economy would actually be greater.
A preview of sorts....consider this, that tomorrow morning or the day after, GM declares it will go into Chapter 11. It could force the shut down of half it's production literally overnight. The UAW really would not have a say in this, as the company would be in receivership. All or a good chunk of the contracts to suppliers would be null and void. This would send a shock to their industries, which would lead to furhter closures and layoffs. These industries have suppliers as well, so they would go next.
Then you have the dealerships, some of whom have only one company-branded product line (say only Chevy and Buick). They are immediatly left scrambling to look for a new supplier of autos and financing. Some would be able to pull it off, many won't, not in this economic climate.
That's what I've read is the average cost savings by moving jobs to Canada and Ireland simply due to health care costs.
Letting campaigns and corporate lobbyists immediately dismiss universal single payer was dumb.
If someone wants to write a post on the overall savings of universal single payer I think it fits this site.
I've put up many graphs showing the United States pays far more in health care costs than anywhere else in the world on top of it.
I think we're at the bottom in terms of health care quality.
Bank Holding Companies were the the only way to go for J.P.
Morgan, Salmon Chase and countless robber barrons from the 1880s until Glass Steagul broke up banking and brokerage.
Clinton re-authorized brokers and banks to join in 1998.
It is so easy to predict and understand this crisis and its next wave. Put banks and brokerage together and there is a perfect formula for disaster.
Disaster has arrived at Merrill Lynch. In the 90's, Merrill moved more aggressively to blur the lines between bank and broker. Merrill should be the poster boy for this crisis. But what do AMEX and Sach do? Imitate Merrill, what else?
Once all non-bank brokers become deposit taking banks who may trade securities,the second and big wave of the Tsunami will be visible and rising offshore.
But before the Cramer SWF (he is from Goldman), or my idea of the Enterprise Fund. We should condsider what J. Venom says re Health & Penson
"
In comparison to say the Canadian Auto Workers (CAW), the UAW has to negotiate health benefits because there is no government solution. We live in a nation that does not provide a standard universal health care system. Secondly, in regards to pensions, the US government provides a pension system that today barely meets the needs of retirees. The membership of the UAW knows that Social Security is inadequate, and thus have to work from that point on forward. Perhaps instead the unions should have opted earlier on in taking over the pension system away from GM.
"
This is very true, in fact Toyota at one time manufactured the RAV4 in Mississippi but moved production to Canada, not because of the education, skills or the rest of the crap the reactionaries spout against U.S. labor, but due to the Canadian Health Care system!
and I hope we get a youtube of this because I was standing up saying right on Jim!.
Mad Money 11-10-08:
What is so important about this is a very entertaining stock picker guy who periodically goes ballistic on the Fed nails it. He gets that in the United States what we really have is trickle up consequences and if they continue to piss on manufacturing and the working/middle class, eventually that shit rolls upward and is going to hit Wall Street and the super rich where they live.
I usually watch Cramer for the entertainment value but today he said sacriledge to Wall Street, that working America will effect them badly...talk about truth to power.
I worry it all went to that Nigerian Prince I keep getting emails about.
that they could send every single American a $50,000 check and it still would be cheaper than what they did.
...the efficacy of less than one trillion dollar 'stimulus', most of which is being diverted to merchant bank pockets, on a....wait for it....
14 Trillion dollar economy.
Come on Barrack these assclowns are talkin' chump change. Mall every man woman and child a 10k check an let's....
...git rollin'.
it's testimony from one group, it's not law. So maybe the testimony also said IRAs but it's just a hearing, not even a bill has been introduced, much less passed.
If you are really concerned write your representatives and tell them not to do this.
I doubt such a thing would pass for taking half of retirement upon death, well, just no way is that going to be supported.
It states IRA's and 401K's
The reason why alcohol is taxed: because cash-poor hillbillies in the Southeast used to use whiskey instead of currency- and kept doing it even after "revenooers" were hunting "moonshiners" by night in the backwoods.
Makes me wonder if a good microbrewery would be a good investment today.
.....the sweet, sweet smell of 'hopiness' in da mornin'. Er...wait, wait that smell from Congress....
...it don't smell so damn sweet as all that.
gotta timing conflict bug which happens once in a while.
Because I wanted to get it at the quoted spot price- and by the time I was ready, was completely unobtainium at that price (and no, I wasn't willing to invest in "gold paper" from somebody claiming to hold gold and sell a share of it).
Right now, I'm looking for something "safe". And not finding it. I just don't have enough trust, enough risk tolerance, to do anything right now.
This seems to have gotten posted twice.
The first cut was a discussion of the target industries.
The second cut was what the investment vehicle could be.
The third cut is the drill down to the transactions.
The objectives are straightforward
- What are the industrial target assets
- What kind of fund should be used
- How to finance infrastructure without increasing the budget deficit at all
- What are the protections and guarantees on public finance
Burton Leed
They're asking for another four years -- in a just world, they'd get 10 to 20 ~~ Dennis Kucinich
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