Economic/Market Highlights 11/19…The Pain Increases!!
By Larry Doyle on November 20, 2008 at 7:10 AM in Current Affairs
***Citigroup is down another 25% in this morning’s trading as investors are concerned that embedded losses are deeper than previously thought….as the attached article highlights, “it makes us think the mark to market writeoffs are not over yet”.***
Read more as to how and why “Citi’s Slide Deepens….”
As my Dad used to say when the report cards came home, “Just give me the grades and save the sob story for your Mother”.
| Dow | on the day | -5.1% |
| month to date | -14.2% | |
| year to date | - 40% | |
| S&P 500 | on the day | -6.1% |
| month to date | -16.7% | |
| year to date | -45.3% | |
| Nasdaq | on the day | -6.5% |
| month to date | -19.5% | |
| year to date | -49% | |
| 10yr U.S. Tsy | on the day 3.33% | down 20bps |
| month to date | down 64bps | |
| year to date | down 70bps |
With grades like these, my Dad would have clenched his teeth, furrowed his brow, and bit his tongue. My Mom would proceed to rip my head off. Truth be told, that tough love was just what I needed to increase my discipline.
While tough love needs to be more love than tough, the fact is that covering my own shortcomings in work and discipline solved NOTHING. Our “socialized housing finance system” and our effectively “socialized banking system” are finding the same outcomes. Ultimately the price must be paid much like the losses must be recognized.
Neither Paulson nor Congress nor anybody in Washington or Wall St will tell you that the system has trillions in embedded losses but they do and our markets know it and are showing it by their prices.
Obviously with grades like these our markets are merely a reflection of an economy that has serious fundamental problems, a technical imbalance in buyers vs sellers, and horrendous psychology.
All other things being equal, in markets like this I would look to put capital to work. However, all other things are not anywhere close to being equal. We have tried to highlight extensively that there are a trillion dollars worth of embedded losses in the banking system (Citi down 23% today, JP Morgan down 12% today).
We have also tried to highlight that there are hundreds of billions in losses embedded in the insurance industry (Lincoln Financial down almost 40% today!!). Who knows what the losses are in the hedge fund industry because they neither publish holdings nor marks. While I could offer opinions on housing starts, inflation readings and the like, the only word that I will offer to properly characterize this market is “resignation”.
Our market is resigned to the fact that the Fed has little to no ammo left. With the Fed Funds rate at 1%, consumer and corporate borrowing rates have hardly budged or actually have only moved higher over the last month given the perceived increase in the credit risk of the underlying borrowers.
Our market is resigned to the fact that the Treasury has little to no ammo left. The 290bln that has already been expended has brought some stability to certain short term sectors of the market but it has not changed the fact that the losses are embedded and need to be cleared. Obama can inject the balance of those funds, 410bln, but honestly it will not change the fact that the embedded losses are multiples of that.
Our market is resigned to the fact that neither Congress nor the incoming administration can support our markets by throwing more money at them via a stimulus. That money may “dull the pain” but it will not clear the losses.
Our markets need private capital to facilitate the transfer of assets from the weakened hands of banks, insurance companies, REITS, and hedge funds to the strong hands of new PRIVATE money. IMO, the only way to attract that money is through a cut in the capital gains tax rate and a form of tax credit for new home purchases.
Even with that cut and credit our markets are a LONG way from turning around. Even though our economy was strained up through the Summer, the dam did not truly break until Lehman Brothers collapsed on September 15th.
While the pain is extreme, bear up and realize that we are now merely two months into into what will be a severe economic downturn. Having broken down to new lows in the markets since 2003, I believe we will see a further selloff of at least another 5-7% before any support develops. Even there, the market is telling me to wait before committing capital.
I used to have a rule of trading which read “MGIDWHMP”. That acronym means Market Goes In the Direction Which Hurts the Most People” and given the forced liquidations and delevering that direction is certainly lower. I definitely foresee that while Congress debates providing relief for the auto industry, the new administration is going to be faced with injecting more capital back into Freddie and Fannie (they each got 100bln already), AIG (150bln already), and more into some banks that have already received capital (for example, Citigroup, down 23% today to 6.50).
We are already starting to see some of the consumer finance companies position themselves for capital as they know that there credit chargeoffs are getting ready to soar. Read more here as to how the “Future of Fannie, Freddie Debated” and why the mortgage market needs private capital solutions.We are seeing severe strains in the commercial real estate space as delinquencies and defaults hit that sector.
Read more about this, “Commercial Market Begins to Show Fissures”We highlighted in our piece about the Wall St. model last week how banks had lowered credit standards across a variety of classes of loans in order to generate volume.
Read more about, “Do Sold Off Corporate Loans Do Worse”…In this article professors from Case Western and Carnegie Mellon focus on the “moral hazard and adverse selection in the originate to distribute model of bank credit.” This study highlights the points we made last week in describing the broken Wall St. model.
Perhaps they are loyal readers of NQ, the best forum for getting at the truth.
Last but not least, there is an individual named Noriel Roubini, a professor at NYU’s Stern School of Business, who has had IMO the absolute best read on the markets and economy. He is not beholden to an investment bank, an asset management business or any other enterprise that is trying to sell advice or products.
He has had some remarkably accurate calls on market movements and economic trends. Today he highlighted that the recession that we are currently experiencing will be the deepest in the last 50 years. I could stick my head in the sand or soft sell that markets always rebound but I am merely trying to provide a healthy and realistic view as to what is really going on in the economy and markets.
Here is a link for more about Roubini. I think you will find him enlightening if not exactly entertaining.
If I could be so bold as to make one request of the loyal readers of NQ. While I hope that some if not all (mandatory civil service does not appear to be overly popular) of my insights may be helpful, I would like to attempt to increase the level of dialogue and questioning during these critically important times for our economy and country. I welcome responding to comments or questions but please keep your comments and remarks on the topic at hand.
I thank you.
LD
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WWHD? What Would Hillary Do?
Well, I’m pretty sure she wouldnt reward PENNY PRTIZGER with COMMERCE SECRETARY … WTF …. you’re kidding me, right? Is the United States that desperate for leadership?
I give her six weeks…lol…As Galt like to say..Gird your loins….
Ab actu ad posse valet illatio…Absurdo!
From what has happened we may infer what will happen…Absurd!
Okay. Help me out with this if you can. Is Penny the hope or the change? I confess that I can’t see my way around this one. She’s not going to make the confirmation. If she could fill out that 7 page form with a straight face, Bill Clinton is a problem? PUH-LEEEEZ
Abyssus abyssum invocat
Hell calls Hell…( one misstep leads to another…)
Ad Hoc…Ad Absurdum…Acribus initiis, incurso fine,,,Acta est fabula, Plaudite!
For this purpose…Absurdly…Zealous at the commencement careless towards the conclusion…The play is over…Applaud!
Beebop -
My thought exactly. It will be interesting to see if P. Fitzgeralds investigations will continue with so many from the “Chicago way” moving to the whitehouse.
Xcellent analysis LD…You Rock.
What happened to Buffet and his plans for his ginormous Wind Project?….He Bailed…(sigh)
Great lists of the facts, thank you. BO is ill prepared to get our economy going again, he does better when the money is good, like with his illegally accrued campaign finances. There is NO REASON for business to stay here, and the DOW reflecta a complete NO CONFIDENCE vote from manufacturing, automotive, and housing industries….try to find a person who wants to borrow money , to give 28% or more back, if they turn a profit….not going to happen.
I have businesses and I am consolidating my risk, and not growing. I was going to move forward with a new deal, and pulled back when it looked like BO might win. That fact that he has won, makes this even more so.
In short…..no one is being held to accountability. That is what is wrong with society in general. Kids don’t do well in school, blame the teachers but not the parents who don’t spend any time w their kids and homework and don’t blame the kids. Don’t want to work, go get welfare and any hand outs you can find. Commit crime after crime, that’s ok, a judge will keep giving you probation because apparently that is working. Want to go out and get laid, don’t worry about using free birth control, just go get an abortion or have the kids and get the public to raise your kids for you. Execs and CEO’s cook the books, get millions in bonuses, exec pay, company goes bankrupt, leave the company with millions more in severance pay. Get illegal, foreign contributions, fund Acorn who is engaging in voter fraud, be one of the highest paid recepients of lobbying money from Fannie Mae and Freddie Mac which then is a major player in the mortgage crisis and the economy breakdown, steal elections from your opponents including the best candidate for President, play the race card, engage in sexism and turn the other way when your rabid supporters do it, have no experience or qualifications other than corrupt activity, and you can be President.
Our society has become one where personal responsibility is out the window.
Spot On
Yes, spot on. Dishonesty triumphed. See no evil. Lets let the day end and lets have a new day regardless of yesterday. But no changes in sight.
Is addition to greed.
The unexamined life is not worth living…- Socrates
Gives a whole new dimension to the Ignorance is Bliss way o life…It’s also….
L A Z Y…imho
Yes, accountability is something we seem to have deserted long ago. You can see it all around. Even the way we use language points to it. I could list hundreds of examples, but just use your imagination.
I’ve seen this coming for a long time, but didn’t think the implosion would be quite so extreme. The RMS Titanic is taking on water…
For lack of a better term, “easy money” has been a major factor in all this. Too much of getting “something for nothing,” or something for very little effort or productivity. Consider how many people today, who are showered in money for doing absolutely nothing productive. And I do mean from the top to the bottom of the scale.
Hard work, perseverance, and accountability somehow escapes us. This land has been invaded by parasites, and until we recognize the implications of that, things will get much worse, before they get better…
Hmmmm…Arcadianwind…intolerance is what it is…and we live in the age of I want what I’m entitled to…
I’ve been dancing on the line between skeptic and cynic for a while…( trying to cling to the skeptic over the cynic…)
Diogenes would be howling at our folly…Munching onions in his tub with glee…
Indeed.
Exactly the things I have been preaching to people all year and they still think I didn’t vote for Odrama because of cour grapes over Hillary.
Expand on that thought people to reason why, I say!
Ah yes, the reasons why. Example, as LD points out
There is the sad fact. We, the tax payers, will be bankrupted by trying to bail out the geniuses who built this financial Ponzi scheme. Yet those who benefit own congress and the new potus, so they will pretend and continue to shovel dollars to those too big to fail. No accountability. That is the problem. Too many people now realize how utterly corrupt our system has become. At it’s root, money is based on faith. Washington and Wall do not deserve our faith, and they do not have it.
For the first time in a long time, Barney Frank ran campaign ads for re-election. If you can believe this, his ads actually said, the Republicans failed to regulate Fannie Mae and Freddie Mac; so we need him to Chair the House Banking Committee to clean up their mess! How will anything change now that the foxes are in charge of the hen house? I keep likening this situation to a developing country, where the leader embezzles all the foreign aid dollars while his nation is starving; and when the fecal matter is about to hit the fan, he obtains asylum in a country that needs some of his ill-gotten loot.
Not encouraging news —
Thank you for keeping us informed —
I just don’t have any faith in the financial skills of the people 0-zero has surrounded himself with. Some were involved in the Freddie-Fanny mess — others are part of the Chicago School of Economics.
This situation reminds me of that song — know when to hold, know when to fold . . . .
Hmmm…My mother used to say a little shame is a good thing…And we have lost sight of that in the quest for feel goodies…Kinda like suffering and the delusion that life should avoid suffering at all costs…
Gets folks twisted up to the point where they cease to recognize fundamentals.
About 4 years ago I stumbled upon a great book called The Meaning of Right and Wrong By Cabot. It was published shortly before Hitler’s global impact and WOW!…Should be required reading for all students…imho
right on, apparently knowing the difference between right and wrong is not politically correct. I’m going to check out the book…thanks
You should enjoy it. Cabot was the head of Medicine at Harvard and taught Ethics. The way the book is designed is wonderful because of the way he makes Ethics accessible for the average reader. He shows ethics as it applies to the individual…then to the family…then to institutions…and finally to the larger context of international relations. The last section literally blew me away…( He could easily have been describing the lead up to the Invasion of Iraq ) I think it was published in 1933. I could not put it down an have had difficulty finding it again.
I loaned it to my father who will not give it back..Go Figure…sheeesh!
If you find it say a ( 1/2 price book or the like…Let me know…It is a treasure…Truly! )
what is the first name of the author?
I think it was Bruce Cabot. He taught a Harvard and that might be the publisher. My dad will not return the book…(sigh)
ok thanks, can’t find it at the library, I’ll scour the internet
We have replaced shame with audacity.
HC…according to Barky…To have HOPE is Insolent…What would Jeeezus say to that? ( I’m speaking of the historical Jewish Jesus…Not the revisionist ghetto freedom fighting community organizer…chuckle…)
one definition of audacity is insolence…
How to forget about the economy and chill out.
http://www.youtube.com/watch?v=LQ-jv8g1YVI
I think Sean Hannity is correct…when Obama stops talking about taxes, the market will go up. I hope. But with the likes of Frank and Dodd and that crappy mortgage mess and the frozen credit markets…..
And we’re supposed to bail out credit card companies and the balance sheets of big outfits? More $$ frozen out of the system….Donald Trump was pretty grim a week or so ago when I heard him discuss this problem….grim as in worse than 1929….
On top of that, I went ballistic over Daschle yesterday. And Vilsack…organic consumers already onto the petitions…I signed…so, I’m already signing petitions in protest…WHAT’S CHANGED???
The Scanner-Politics 11/20/08 (CHANGE?? Daschle at HHS, His Wife and Lobbying; Organic Consumers Org. So Ticked at the Thought of Vilsack at Agriculture That the Petition is Already Going Strong; Froma Harrop on “Palin’s Next Career Move” Will Raise Your Blood Pressure
http://tinyurl.com/58nquf
See my reply to comment above, re Frank.
“Down and down we go” which is setting up conditions world wide for “The Anointed One” to suspend the 22nd amendment allowing him ample time to complete his work.
“…the dam did not truly break until Lehman Brothers collapsed on September 15th.”
From the Telegraph, London, October 17, 2008:
“Financial crisis: Christine Lagarde warned Hank Paulson to bail out Lehman Brothers
Christine Lagarde, the French finance minister, warned her US counterpart Hank Paulson that he had to bail out US investment bank Lehman Brothers or face global financial collapse, but her advice went unheeded.”
This is the headline of the link below. I wonder why Henry Paulson did not bail out Lehman Brothers when seemingly it might have saved a few trillion dollars in the long run.
I recall reading sometime in 2007 that Obama…at that time…planned to invest heavily in or promote infrastructure projects. That strikes me as a New Deal type economic approach except the part where all of our basic services are privatized. I wonder if Obama had an inkling of the impending disaster.
In any case, I hope he or someone has some plans to get all these people who are being laid off back to work just as soon as possible.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3212182/Financial-crisis-Christine-Lagarde-warned-Hank-Paulson-to-bail-out-Lehman-Brothers.html
I saw that many of Lehman executives were hired by other firms and were giving lectures and leading forums on issues pertaining to investments, etc. All of them quickly found jobs.
What I find sad with your column LD is that imo we had a good opportunity with McCain to do the right thing. It was pretty simple in his eyes and I was in agreement. It is not difficult to solve the problem. The problem is ‘greed.’ And I don’t think that greed is that difficult to tackle if one approaches it with determination.
McCain campaigned on ‘reform.’ His interest was to ‘reform’ the system to stamp out greed. Greed is easy to identify and stamp out. I think once greed is dealt with swiftly and assertively the markets and the economic system can heal.
Since McCain lost and Palin is back in moose country we have very little to look forward too. No amount of money or progressive system changes will have the corrective power to amend the downward cycles that are pending. Why? Because smart greedy people can and always find a way either legislative or procedurally to make money by pushing deception.
Having said all that, do you see any way that without leaders like McCain and Palin we can see any movement towards the ‘elimination of greed’ (deceptive advantageous profiting)?
Do you see one single moralizing action that taken by Paulsen or his successor can work to clean out the system and turn it into a productive environment? One single moral initiative.
Lark,
While legislatively we can impose new rules, regulations, and reforms, I am not sure that we can legislate morals.
Society needs to “punish” those who promote immorality in the marketplace and make no mistake that is what is happening right now with prices. I expect that you will see high profile indictments over the course of the next few months. The free, democratic, capitalist system will work if we allow it. Regrettably we gorged ourselves on excesses.
The collateral damage, that is innocent citizens, are also harmed.
Both our society and our markets need to put the “highest” premium on integrity, reputation, and prudent, disciplined risk management. Over time, those institutions and individuals will win out.
As a start, I would like to see Obama cease and desist from excessive pomp and circumstance during the inaugural process. Send a signal to the masses that a simple and transparent inaugural “open house” is a symbol of change. Have the inaugural process last 24 hours and get to work.
The Obama cannot cease and desist with pomp and circumstance. Thats all he has. Also, the entire city is already booked out the coronation. The guy is sort of trapped by his own persona. If he doesn’t put on some sort of show here in DC I do not know what will happen. The thought of millions of Obamabots running around near my house bored doesn’t make me happy!
So as to not be off topic, I agree cutting cap gains (and I would reduce other business taxes as well) is a good thing, but I see no evidence that Team Obama feels the same. We will have to agree to disagree that the fix for this situation was to throw some cash at Lehman. I think the fix has to be let the markets fix themselves in the absence of social engineering goals being delivered via our banking and political systems.
We can probably all agree that no matter what anyone thinks, its gonna hurt.
Starting with our own.
Amen!
A question for LD. Not related of course.
In their new ad, a new company out there says, “who are those in the conference room? They are from RSM McGladrey… they are here to help us… bla bla bla.”
Do you think our problem is that we really did not do the right thing by punishing the accounting firms during the Enron debacle and allowing them to continue with their easy deceptive practice of leading companies into reports that mainly hide corruption practices?
Isn’t the problem, the real problem, the accounting firms?
Without entering in any form of liable, what do you think of the RSM McGladrey ads?
Are we seeing in front of our eyes the next generation of deceptive accounting practices just rising in the dawn?
I have seen those ads. I think that they are a consulting business. To the extent that some business managers end up with a “deer in the headlights” outlook then out side consultants can provide valuable service.
I do think that the markets effectively punished the accounting firm involved with the Enron fiasco. That firm, Arthur Andersen, was out of business in very short order.
Again, whomever is involved in fraudelent conveyance needs to be aggressively punished with lengthy time in the “sin bin”. (prison)
” sin bin “…like that LD…
Why do you think that Accenture and McGladrey advertise on TV during certain cycles? What does that accomplishes?
Excellent Article!
We are riding down a “DOW Bubble”
14,000 was a false high, like $148/Br. Oil.
The DOW will “Bottom” at 5,200 and the 14,000 needs an asterix by it, like Berry’s Home Run record.
The Houses that were over priced in the Real estate “bubble” will settle to true value before they sell again and the real estate market will recover.
The “Market” is very heathy and working just fine.
The “Market” is purging the “bad blood” from it’s system.
Bail outs?? That is just market junkies looking for another cheap high.
GET THEE TO REHAB!!! ie Chapter 11
LD, thank you for the post…I think.
I am extremely concerned about our economic situation, and I certainly don’t have your level of expertise.
At this point, we may just have to let things run the course, for I don’t think anyone can halt this slide.
As retirees, we are being hit hard, and we were never affluent.
It’s difficult to watch the loss of funds that we sacrificed to invest, but there is no knight on a white horse headed to the White House!
Sassy,
If I had better news I would give it to you. Not knowing your exposure to the different sectors of the market nor yuor income needs, it would be imprudnet of me to offer specific advice.
I do think in general we are hopefully all learning the values of
1. diversity across investemtns, including cash
2. counterparty credit risk (who is on the other side of your trades or investmetns..are they going to be there)
3. minimizing debt
4. leverage and the painful process of deleveraging
You are right about there being no white knight…
Yes, LD. McCain was, of course, right about capital gains, which is exactly why he got my vote, too.
There’s no doubt that this is a long-term illness in our economy. There will be no turnaround for many years.
And a bunch of folks are due for a lifestyle adjustment.
Will the continued bleeding on Wall Street ever stop…medic!!!
Sure, when it gets down to the real value level. It’s been smoke and mirrors for over a decade, maybe longer.
I’m sort of surprised by my own gut-level feeling 20 years ago, when Reagan busted the unions. I was living in the midwest, and I saw the lower-middle-class disappear quickly.
At that time, I wondered how the country would ever survive without a middle-class.
Turns out. We didn’t.
And the beat goes on…the “smoke and mirrors” game (in it’s many forms) has become more and more an instrument of our decline.
I guess the question now is: when does the critical mass come to awareness of this reality?
Whew….what a great piece! Luckily, last November, I received a heads-up to get the heck out of the market because it was ready to implode. I am so glad we did! We lost a chunk of a retirement fund before we did move it, but had we left it where it was…we would have none left now. We didn’t have that much to begin, but nevertheless, it would amount to nothing today had we left it in the market.
Thank you so much for this informative essay! It’s someone like you that urged us to get out of the market when we did. Thank you.
I have a question…VERY important to me right now. I’m sick with worry about it. We took our son’s college money out of the Mutual Fund we had it in and opened a College Illinois 529 fund which froze the college rates to what they were when we opened the fund last year. No matter how high tuition goes in the next 3 years, he will be able to attend any Illinois University at 2008 tuition rates. THAT was one of the main reasons we opened the 529 fund AND to get it out of the Mutual Fund which was losing $$$$. My question for you….is a 529 SAFE? Would we be better off with a CD earning 3-4% until the market settles down? He’s a Sophomore now and we have 3 more years to ride this out. College Illinois says the funds are SECURED. I have a hard time trusting what ANY financial institutions tell me though.
Another issue I have is if we would take the funds out of the 529 now we then lose the lower tuition costs. If we moved the money and reopened another 529 in a year, we would have to pay even MORE in tuition costs. I just want and need to know that that money is SAFE and SECURE where it is for his education.
It’s Not Me….Safe and secure are always relative terms. Most people thought that their money in the Money market reserve Fund was also safe and now they are getting back somewhere around 95 cents on the dollar.
Here is what I would recommend.
Call the administrator of the fund and find out the following:
1. Who’s credit risk are you taking by leaving your money in the fund? State of Illinois?
2. Who is administering/servicing the fund? Even if you do not have the credit risk of the administrator what happens if that entity had liquidity/solvency problems.
3. How is the money invested in the 529? Who chooses those investments?
4. While your tuition costs are fixed, are your assets properly matched against those liabilities?
I would make sure that you speak to a “professional” and get it in writing or get documentation.
Hope this helps.
LD
Thank you SO MUCH! I will do exactly what you recommend.
(((HUGS))) to you, LD!
I love the “get it in writing” advice….not that laws, rules, promises or contracts (we did sign a contract promising our funds are secured….I’m sure Enron employees did too though!
) have ANY meaning these days.
http://www.rallycongress.com/constitutional-qualification/1244/
Stop the Obama Constitutional Crisis Sign the Petition : 109,490 Letters and Emails Sent So Far
Article II, Section 1 of the U.S. Constitution reads: “No Person except a natural born citizen, or a citizen of the United States at the time of the adoption of this constitution, shall be eligible to the Office of President; neither shall any person be eligible to that office who shall not have attained to the age of thirty five years, and been fourteen years a resident within the United States.”
There are numerous questions as to Obama’s citizen status raising suspicion and doubt about Obama constitutional qualification to be president. To settle these questions Mr. Obama must produce proof of citizenship!
Documents that must be produced include;
(a) a certified copy of “vault” (original long version) birth certificate;
(b) certified copies of all reissued and sealed birth certificates in the names Barack Hussein Obama, Barry Soetoro, Barry Obama, Barack Dunham and Barry Dunham;
(c) a certified copy Certification of Citizenship;
(d) a certified copy Oath of Allegiance taken upon age of maturity;
(e) certified copies of admission forms for Occidental College, Columbia University and Harvard Law School; and
(f) certified copies of any court orders or legal documents changing his name from Barry Soetoro.
It is reasonable that these documents should be produced considering that his father is Kenyan, his adoptive father is Indonesian, and his grandmother claims to have been present at his birth in Kenya. If he is a natural born citizen then producing these documents should not be any problem.
These allegations will not go away until Mr. Obama produces proof to federal authorities and the public. If he will not do so voluntarily he must be compelled by every means available. You, as an employee of The People, have sworn an oath to support and defend the Constitution.
We The People are demanding you to make every effort, both public and private, to resolve this fundamental Constitutional question before 20 January.
————————
http://www.rallycongress.com/constitutional-qualification/1244/
Please take the time to think long and hard about the vote for President. The eviedence as I see it is strong proof that Obama should not be President, he can not legally be so. Until and unless he complies with the lawsuits and submits the required information and it is verified as per the lawsuits. It is hasn’t even been proven that he was vetted by the Democratic Party.
From my research, and the evidence that I have seen on Attny Bergs site, we very well could be in grave danger if Obama is made president. I am not sure we aren’t already being put in jeapordy by the amount of top secret information being given to him at this point.
Another thing you need to consider, if you or I had any association with Bill Ayers, and others that Obama has associated himself with, not to mention his family ties to terrorists in Kenya, (his cousin is up on charges for genecide in regards to terrorist actions) would we get security clearance with the FBI? I don’t think so. So how is it that he has access to all this top secret information?
Something else that you might consider, everytime it looked as if Senator McCain was closing in on Obama in the polls the stock market would gain ground, especially the days prior to and including election day the market was climbing. The day after and ever since the markets have plunged downward. This is an indication that the people are not comfortable with the future of our country with the outcome of the election.
In the past when the election was over the markets pretty much became stable, that is not the case this time. I do believe had the outcome been a McCain/Palin win, we would not be seeing the constant down turn we are seeing now.
There are people like my mom that has 1/2 to 3/4 of their retirement tied up with the stock market. When my dad died, she had no clue about the market, she still doesn’t, she thinks it will recover because it has in the past. She will not live long enough to see it come back. I tried to get her to pull out a long time ago, at least most of it but she thought it was safe because it is where dad put it, but as I explained to her he is not here to control it. If this market keeps going she will be wiped out.
How many other elderly people are in this boat? You have the ability to stop the bleeding if your vote were to go McCain/Palin because America has more faith in that ticket.
There is evidence coming out that a lot of people that voted for Obama did so for other reasons than he is best for the job. Fox News interviewed some people that voted for Obama, when asked about his policies couldn’t tell you one, when asked what they new about McCain/Palin they could tell some of the negative press, when asked what good things Obama would do, they had no answers.
There was a radio personality, Howard Stern, who had someone on his staff go to Harlem to ask people who they were voting for and most said Obama, when asked if it was by race they said no. (This was a test to see how much these people new about the candidate they were voting for.) However, when they were asked about his running mate Sarah Palin they thought she was a great choice, when asked about his policy to stay in Iraq until the job was finished and Iraq is stable, they agreed we must do that. We all know that that Sarah was Senator McCains running mate, and staying in Iraq was Senator McCains plan.
There were people interviewed after Obama rallies and leaving the polling places that were elated because they said they will never have to pay for rent/mortgages, groceries, or gasoline ever again. Did I miss something, I never heard that. Can you imagine the riots that will ensue when these people realized that is not the case. These people will be out for his hide.
I have already hear of people already refusing to pay rent because he won the election on Nov. 4, saying they no longer have to because Obama won.
Something that came out just days before the elections, was a statement from Barnie Frank, saying that when Obama gets in office, all IRA’s, 401K’s and Pensions that are still out there will be mandated to go into the Social Security Fund. If this happens you will have even more of a Riot from those who have these. This is our retirement, we worked hard to earn, and save these benefits and we are suppose to put these into a fund that these people can squander. IRA’s and 40lK’s are basically retirement savings accounts, as such we can make our children beneficiaries of these upon our death. In the SS fund they are lost to our heirs.
One more thing that you should take into consideration. The popular vote that came out in Obamas favor, how much of it was due to illegal votes, voter fraud? I have never seen such nonsense be over looked by the Supreme Court, there were over 30,000 cases in just two counties alone caught before Nov 4 in Indiana, there were over 15,000 and counting in WI when the task force was pulled off the case, we know there was voter fraud in OH that the Supreme Court refused to have cleared up. If you add those numbers up over the number of counties per state, then multiply that by number of states, can you imagine just how many fraudulent votes were in the system.
The Supreme Court already made a decision to ignore our Constitutional Rights, they refused to get to the truth.
I will take it one step further, I saw a video on Fox News where (Sen.) Maxine Waters
(CA) pleading with ACORN, at an ACORN Rally, to make sure Obama wins no matter what they have to do. This adds more doubt to the credibility of the legitimacy of the new voters that voted in this election. We know there were ACORN registration problems in just about every state. Lets not forget that some of these workers were trained by Obama, and his campaign gave them a sustantial payment, purpose is questionable. Until this year I don’t ever recall hearing about this organization.
There is a lot at stake. Your decision is probably the most important one you have made to this point. Our lives, our futures, our retirement savings, our childrens futures, the security of our country, and much more are all in your hands, the vote you are about to make will shape the future of this country. If you make the wrong choice, there may not be anyway to turn it around in 4 years. An election in 4 years may be too late to reverse the damage done. Will you be able to live with yourselves if the evidence that Attorneys of the 70 lawsuits has is in fact the real truth, and you vote for him anyway. We are asking you not to ignore the peoples plea to do the right thing, protect us and our Constitution.
I would ask that you take time to read the eveidence in Bergs case at obamacrimes.com, a part of that is about the Constitution and the ramifications if the person elected to office that is not an Natural American Citizen. The part where he would not be eligiable to be Commander in Chief, that the military taking orders from him could be brought up on war crimes. There are other very important problems that would also arise.
this is an outrage i cant even find ajob as a truck driver because of a minor accident in my past records and this fraud obama is president elect whos in charge of checking backrounds for the highest office in the land this is a conspiracy to get him in evil forces are at work wake up america!
http://www.rallycongress.com/constitutional-qualification/1244/
AS WELL CONTRACT YOUR ELECTROL VOITES COLLEGES AND ASK THEN NOT DO A THING TILL Barack M H Obama shows the documents and let them no court cases are pending
LD -
Thank you for the great info and insights. I wish I could discuss it intelligently at this point, but I seem to be experiencing a deer in the headlights moment. The disconnect that I see going on in relation to this melt down, is eerily similar to the election. I don’t get it. The wild eyed fear has lessened, anger (at all things Bush and republican) has increased but behavior (in buying habits) is unchanged. Maybe they are just waiting for the magic of the Obama presidency.
LD, thanks for another great article.
I am not sure the government should bail out the auto makers. If allowed to file chapter 11, they will be able to reorganize and renegotiate their debt, union contract(which is killing them right now, by paying 40% more than the Japanese auto makers), and bring in new investment once they emerge from it. Granted, the investors will loose, but is not like their stock worth anything. What the dems are doing is just a pay back to their union backers. Making an average of $70 hr amount to 140k a year for average GM salary, rich by BO definition!!
Also, in light of all the gloom and doom, there are some good news in your report card.
The 10 yr tsy is down below 3.2 today. It means cheaper long term mortgage for those who need to refi or buy homes(40-50% off in some markets), and lessen the foreclosure impact. It also means stronger dollar. Combine that with oil below $50, means more buying power by the average people. I was able to fill up my tank for less than $40 for the first time in many months(used to be $80). All the government need to do is to instill some confident in consumers (like the tax you mention and use the dam bailout to buy toxic asset instead of buying stocks in the banks and enrich the bankers, for crying out loud).
Disclaimer: The title of my BA is Worker Advocacy and Labor Law.
Why, when we scream about the high price of cars, do we focus on the wages of labor? What about the salaries of management? As I recall, when Congress was debating the Family and Medical Leave Act, or FMLA, businesses complained, letting workers take this time off would make American business even less competitive than it already is. I remember thinking, why isn’t anyone screaming, less competitive against whom? The Japanese, who already have such leave, but which is PAID, because they build better cars (read, safer with higher gas mileage) and pay their executives less in relation to their line workers?
I don’t think the pay difference will be that big between the management of these companies.
I am not saying the worker should get screwed. As I point out, the investor will also get screwed, the bank will get screwed as well. The Japanese auto maker pay average of $48 hr and US auto maker pay average of $70 hr. The Japanese auto maker don’t have to deal with contract obligation like the US auto maker does. I had experienced pay cut and benefit reduction in the past to save jobs in our union in hard times. Isn’t this one of the times for the union to actually help themselves by helping the auto makers? Isn’t it better than for millions to lose their job?
The pay of US auto makers forced them to go the big car big gas guzzle route. Normal car for 20k or less have a lower profit margin and after paying dealers and overhead, it’s not profitable. The big car, truck and SUV that sell for 30k or more is where their profit came from. The high gas price all but killed them. Should they had made better cars? Yes. Can they do so and remain profitable? No. They could still do it, but not under so much dead weight. I mean, $30-40 hr with benefit is pretty dam good pay for most people, don’t you think? I never make that much from my job. I had to create wealth some other way.
Also, if you consider the weight and velocity ratio of cars, American car is safer, but lower gas mileage. I had always loved American cars and EU cars. I never liked Japanese cars. Quality of US cars had improved a lot in the last few years also.
If we want to see the economy turn around, we’ve got to get money back in the hands of consumers, not investors. If American industry wants to sell things, we’ve got to make it possible for average people to buy things.
Supply-side economics has turned the whole damn process unnaturally on its head. The idea of bailing out the financial industry and failing corporations–of cutting taxes for the wealthy rather than for the working and middle class–is just more of the same thinking that created the current situation in the first place.
I realize that’s an oversimplification, but I think there’s some fundamental truth there.