I said that the thermonuclear option would be on the way - the government using trillions and trillions of your (and your kids') money in order to try to save the economy.
And now, alas, it's on the way.
Ready?
Think it will work?
US set for ‘big bang’ financial clean-up
The Obama administration is gearing up for a “big bang” announcement next week that will combine a bank clean-up with measures to reduce home foreclosures and probably steps to kick-start credit markets.
The plan will involve an overhaul of the troubled asset relief programme – the $700bn bail-out fund – including strict curbs on compensation at banks receiving public aid. The Tarp overhaul is intended to restore public confidence in what is a deeply unpopular programme and ensure that taxpayer money is not used to fund excessive pay, bonuses and dividends to shareholders.
“There will definitely be a cap of some sort on bonuses,” said a Wall Street executive who has taken part in talks with the authorities. “The political climate is such that there is a need to punish Wall Street.”
The announcement will follow Friday’s news that the US economy contracted at an annualised rate of 3.8 per cent in last year’s final quarter – less than analysts were expecting, but still the worst quarter since 1982. The fall was cushioned by ballooning inventories, which suggest the economy could shrink faster than expected in the first quarter.
The “big bang” approach reflects the belief of Tim Geithner, Treasury secretary, and Lawrence Summers, National Economic Council director, that the Bush administration was wrong to dribble out policy initiatives. Mr Geithner intends to present a “comprehensive” plan that policymakers hope will command market confidence.
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I'm beginning to believe folks who've said that, since we're taking everyone else down with us, there lacks any real threat of us going down first. The pound was worth less than $1.40 this week? Could IcelandPANIC become BritainPANIC within months? Sure, the Chinese could decouple, but then who else will they sell their crap too?
The anticipated "Big Bang" will do marvels...for China!
Think about it. In this severe downturn, the sheeple will go out and spend, as the Gov wants them to do, but most of that spending will be on cheap crap imported from no other than China and the likes of China.
The thermonuclear bomb won't fix anything. It will only prolong the pain. The US economy needs to self correct, and in order for it to do that, it must be left alone, with some new rules and regulations and jail terms for the criminals who drove us to this. No bailout bomb will work at this juncture and Geithner and Summers (and indeed Obama) need to have their heads examined.
We were hoping for leaders who have the balls to tell Americans that they must drop their bad habits and start saving, stop their spending binge based on imaginary HELOCs and easy credit, get busy working and learning meaningful trades and acquiring new skills, teach their kids how to avoid falling into the trap we're in right now... Instead, we got our eternally corrupt Congress still doing business as usual and a President who is unable or unwilling to bring about the real change.
Our politicians are no different than the con artists of Wall Street. They all design and devise schemes tailored to their own short-term gains, be they political or monetary.
In case you haven't concluded yet, WE ARE DOOMED!
The picture speaks for itself. Or how to promote american leadership in technologies while using SONY flat screens.
The so called "bad bank" idea has hit a snag according to CNBC. Thus the bad bank idea won't be announced next week. Let's face it, if the government does that, then we as a nation is so screwed. All of that so called "bad debt" is a bunch of paper IOU's that wont' ever be paid back. As far as their big lie; that oh, the government will end up buying these bad mortgages, credit card debt, student loans, etc.... and then in a few years when asset prices go back up, will end up making a profit is a flat out lie and a sick joke. Who in their right mind believes that a house that sold for 250K in 2001 and then sold for 799K in 2005 will ever go back to it's high price of 799K?
Thus the American tax payer is about to be ROBBED again by these gang of thieves. If the bad bank idea does go through, then this nation is so screwed. Think about it, all of those asset prices will have to be written down and who will get that honor? Us, the folks who work hard and play by the rules and that can realistically cost anywhere from 5 trillion to 12 trillion dollars.
>but still the worst quarter since 1982.
And the economy was that bad then because it had just swallowed the bad tasting Volcher medicine which laid the ground work for the next unpressidented expansion.
This is happening before the medicine is even invented. This is going to be trouble. But I think ya knew that already.
Because this is the greatest bubble ever invented by mankind, the way forward must be sustainable and scalable. Think of it this way, the 21st Century will be as different from the 20th as the 20th was from the 19th. We have to demonstrate our ability to adapt to the reality or face extinction.
Ho hum, probably nothing more than another boring, useless, ineffective $800B package...
YAWN.........
Only way it would be a "big bang" is if they announce a $10T package. Anything else is just the same ol' $800B per month, new this or that program.
This is a done deal, with numerous "trial balloons" having been floated over the last week in mainstream media.
The numbers thrown out have crept up from two trillion to now four trillion dollars.
Furthermore, this "Bad Bank" will be (mis)managed by the FDIC, and at least one small upside will be a period of heavy regulation of some of the former gamblers.
However, in addition to the fact that virtually none of the "assets" have any value whasoever (or ever will), the fact that banks will not be allowed to continue with their former "Cowboy Capitalist" activities will also mean much lower earnings and stock prices for these insitutions.
Notwithstanding, look for the announcement next week, for certain.
How is this going to restore confidence seeing as how the same criminal maggots will still be in charge?
area 51... wake up man or lady.
Let's add up the bailouts, shall we?
2 Trillion undisclosed loans from the FED to the banks.
700 Billion for TARP
825 Billion for Son of TARP
2-4 Trillion for the bad bank scheme
100 Billion for FDIC
I'm coming up with 5.5 - 7.5 Trillion, with a capital T. The previous debt by present balance accounting was 9 Trillion so we just added 75% to this in less than a year.
Oh and our GDP contracted so we are only at 12.5 Trillion so debt is looking to be more than 100% GDP.
Still not enough for you. This will fail, and just drag out the recession.
Obama says he will be held accountable. What will he do when it totally fails. My guess is he will say in front of the camera all serious and heartfelt- "I was wrong. BUT, we will look to the future while learning from the past" and then spew the next plan of action. Kind of like how he said he hoped Wall Street will exercise restraint to take bonuses followed by some very serious finger wagging.
Of course the Obamites will be nodding their head in unison and bleating their approval.
*Sigh*
Keith,
This is like looking directly at the sun. You know it's bad for you, it's painful, and it's going to do damage- yet you can't seem to stop looking. Incredulous.
Make it stop, please.
-Mike
The Sarkozy administration issues a $33.5 Billion bailout and people take to the streets while in the USA Congress is pumping Trillions and people don't give a sh*t?
What's wrong with this?
Wake up people. Wake up sheeple. There are big, black, manipulative, carnivorous dogs surrounding you.
http://www.azlyrics.com/lyrics/pinkfloyd/sheep.html
Keith, maybe a suitable music video to post for this situation.
-Mike
Punish Bush and Cheney.
An idea whose time has come.
Do It Now.
It will fail like all the rest.
You can't cure a spending problem with more spending.
It appears these "intellectuals" fail to understand this basic premise.
The Libertarian New World Order follows. Yes we can.
I am as ready for this as I can be.
Anonymous area 51 said...
Ho hum, probably nothing more than another boring, useless, ineffective $800B package...
YAWN.........
===================================
Heh Heh.
Yeah. It'll all be tax cuts.....for the wealthy and people who still have jobs.
The politicians don't get it. It's the prices stupid. Home prices are too high still. Mortgage costs would be fine if prices were in line with incomes.
http://www.msnbc.msn.com/id/28946241
Lady Di said...
You can't cure a spending problem with more spending.
It appears these "intellectuals" fail to understand this basic premise.
Much of America is afflicted with the disease of short term thinking. It's about the bills on payday, the monthly payment of the auto, the montly mortgage payment for the next 12 months.
It is killing us to think like this.
Cap bonuses for bankers? bwahahaha
Oh yeah, that's why Gheitner selected a former Goldman Sachs lobbyist as aid to the Treasury.
Folks, follow the campaign money from bankers to get a grasp in reality.
Smoke & mirrors continues.
Yes - it will work to stop the complete meltdown of our economy and our country. It will not return us to the land of milk and honey. We have many years of pain ahead. We will find a housing bottom of 10% down from 2008; our unemployment will hold at under 9%; and our markets will stop double digit annual loses. This medicine will cost us. Higher inflation will hit us within 5 years - In essence this will continue the downturn even though everything will be 'up' (housing values, employment, paychecks, stock market).
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HURRY. BANKERS AND THE CROOKS IN CONGRESS NEED FINANCIAL SLAVES DEEP IN DEBT AGAIN, TO SUPPORT CHINA, MEXICO, NEW JETS, $1,200 TRASH CANS FOR BANKERS, AND EXPENSIVE ESCORTS FOR POLITICIANS WHO DON'T EVEN PAY THEIR TAXES. HURRY, GO GET YOUR LOAN OR CHARGE THE CC AFTER OBAMI HELPS THE BIGGEST HEIST IN HISTORY.
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Who would have thought solving this crisis with what caused it would never work?
Who in their right mind believes that a house... will ever go back to it's high price of 799K?
But it will. Even better, you'll be able to buy it cash or perhaps trade a can of beans for it. You may want to start stocking up on food stuffs today, in 2009, before the dollar implodes and hyperinflation arrives.
Obama = BushI = Clinton = BushII
"An estimated 2.7 million Californians expecting income tax refunds in February won't receive them then, because the state's prolonged budget impasse has emptied its treasury.
"It's horrendous," said Hansen, an office manager for a doctors' office. "I'm someone who counts on that refund every year to make ends meet."
State Controller John Chiang's decision to conserve cash by withholding nearly $2 billion in tax refunds, among other scheduled payments, starting Sunday means thousands of people and businesses that rely on state money will not be paid as usual.
The state pays about $250,000 a month to Western Mixers Inc., a Los Angeles company that provides produce to prisons"
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Hey, Pelosi, Feinstein, and Barney Frank have an excellent solution. Why doesn't California pumps in another 20 million Mexican illegals who breed like flies, don't pay any taxes, and send 80% of their earnings back to Mexico?
That will help your budget, Californian geniuses! Hey but gay marriage is priority, right?
Oh, and congrats for all the welfare you're paying to that lady that had the octuplets, after having six kids already. She's the new California hero now, and they'll probably elect her for commissioner or rep.
There is a lifeless look in Obama's eyes. I can't get over how he seems so devoid of life.
Kool.
Aid.
and after 10 trillion does work the excuse will be that more needed to be spent and faster!
This is fiscal insanity on steroids.
It makes more sense to bypass the banks and loan the 'stimulus' money directly to the consumers at 4% APR for 10 years with an optional no interest-no payments for 2 years for the unemployed/underemployed.
http://www.youtube.com/watch?v=WE8D4tHOg7k
Metaphoric....
State Controller John Chiang's decision to conserve cash by withholding nearly $2 billion in tax refunds, among other scheduled payments, starting Sunday means thousands of people and businesses that rely on state money will not be paid as usual.
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no problem, the affected businesses and individuals should be able to pay their quarterly taxes by signing back the tax refund IOUs to the state.
"no problem, the affected businesses and individuals should be able to pay their quarterly taxes by signing back the tax refund IOUs to the state."
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Ha. I've actually contemplated doing that on my next quartlerly payment.
Doesn't matter. Liquidity trap MEANS liquidity trap!
Price/rent is still out of wack(and rents are falling now too uh oh)
The nation needs wealth caps.
Say all wealth and assets a citizen hold above $50 million should be nationalised by the government.
That would pay for this.
Double down.
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