Financial Crisis is Now a Long-Term Planning Situation

Well, from looking down the road filled with rocks ahead, I do honestly think it is entirely possible that this so-called “recession” is going to get a hell of a lot worse, and dive into a depression. Barack Obama is one of the most intelligent people I have seen elected as a leader in a very, very long time. But even with his ability, his sphere of influence, this has gone way past crisis stage and into a long-term butt-ugly situation that is not easily resolved. Thankfully, this time the US does have a leader with some intelligence, considerable ability to listen, watch, and take a good look before jumping into the quick-sands of panic. But he certainly cannot turn this wreck around by himself, which means all of us, including me, need to start planning for a long-term, tough and rocky ride.

Finally Paulson put the truth out, the toxic sludge that became the reason for so much of the “hedge” funds and the credit default swaps taking out Lehman Brothers and crippling the banks in the US and world-wide are NOT going to be bought out. Finally, someone figured out that this maze of stupidity is not worth paying a wooden nickel for. But, that means that those goofs that did get into this whole “funny money pyramid scheme” are now going to have to write down all those losses, if they can even figure out what the losses are. Good grief!

The ripple here is going to continue to hit the mortgages, the loans for cars, and maybe even student loans. Just this last while, another 18 banks went “POOF”!  People are taking their savings out of the banks, mostly because they have no idea whether the banks will even exist later. Treasury bonds are selling more than they have for a long time, even with paltry interest.

The APEC summit just finished, and the leaders figure it will take at least a year and a half to get this whole mess turned. Frankly, with the rate of business bankruptcy just starting to hit, the shaky ground that some of the major industries starting to move like a slow-motion earthquake, I don’t think eighteen months is even close to accurate.

Planning to endure the time ahead is the one thing I can do. Remember when someone asked you at a job interview, “Where do you expect to be in a year from now, with this company?” Well, the question now is, ” Where do I figure on being in two years from now?” Tough to call in some ways because there has NEVER been such a mess, NEVER has been such a phenomenal meltdown involving more than one or two countries. Yep, this lesson is that no country is an island, nor is any person able to do something stupid without the ripple effect going out well beyond known parameters. Congratulations you bunch of greedy jackasses, you sent one massive torpedo and blew a huge hole in all our lives! Don’t darken my door with any of your “innovative” ideas, or you may find that I DO have a pair of steel-toed boots and WILL use those on your butt!

Yep, it means I have to change my plans, work out a plan that takes into account changes in how I deal with money, and definitely how I manage my own income. Fortunately I am one of the few around with no debts to speak of, as I owe less than five hundred bucks right now.  One thing I will not do, though, is take on any credit cards. The banks are raising the interest on the cards to thirty-two percent either December first, or January first. Phooey! The only reason any bank want me to have their credit card is to make sure I go into debt. That is the only reason the cards are offered in the first place. Phooey! Keep them!

At least now I know that those who would make others the pawns in a very greedy, stupid, and ugly money game now are going to have to deal with it, not my tax dollars, not my hard-earned income. That is one relief, and from watching all the posts, I am definitely not alone in my wrath here.

Normal changes with each generation, so what WAS normal, is not normal now. Watch how the rules and normalcy change and learn to move with it. Barking about “how things used to be” is a total waste of time, energy and robs anyone doing that of the means or opportunity to be effective now.

Where do I figure on being? If I plan reasonably well, I should have a roof over my head, a change of job, certainly, and food to eat. Other than these things, the rest is negotiable, subject to change. My own sinking feeling is that this “crisis” is going to carry on well past two years, perhaps as long as five years. THAT does not make me happy, to say the very least.  I will do what I know how, what I can, and do it as well as I can, then let the rest go.

What do you think? Will this go downhill like the world did in the Great Depression or not? I sure as hell hope not.

President-Elect Obama Has A Job I Sure Would Not Want

Where, indeed, to begin, literally?

People often think of the President as a powerful post, and sometimes they are right. Barack Obama is taking on a daunting task here, and for once, I seriously would not want to be the president. It seems that there is a huge lineup at the door, all beggars, seeking monetary aid, bailouts, and all screaming over the other.

Barack Obama got it right in his campaign, putting the emphasis on the people. Without people, the government is an empty place. Government NEEDS people, people don’t NEED government.

Paulson finally woke up! All the toxic debts and CDS banks “invented” to circumvent laws are now going to stay with the banks, investment houses, and those who abused the financial system are just going to have to deal with the mess of their own making! Finally some common sense. Unfortunately, those banks “played” consumers, taking what should have been a simple contract called a mortgage and turning that into a splintered, then shattered, mess. Like I said previously, it would be worth a few hundred dollars to find out if banks et al breached those mortgage contracts. Re-selling and manipulating the housing markets by allowing “invisible” parties to endanger the entire world economy, personal mortgages, and then asking for the Fed to bail them out is ludicrous!

Obama has to deal with issues that are so complicated it takes at least 20 different people just to make the map, nevermind navigate it! Balancing the interests is tricky, at best. The two wars need to be mapped, understood, and navigated so that Iraq and Afghanistan both come out at least with some semblance of stability, otherwise the world may well end up going back in to restore them again. Not my idea of fun, trying to figure this out!

The banks and investment houses created a mess so large it has foundered the world economies! You can bet that anger is definitely NOT limited to the US, as most of the world is so very angry at those “fat cat” jackasses who tried to pull these scams off. Personally I would love to put on my steel-toed boots and give at least 20 of them a very well aimed kick in the ass! Then see all those “perks” they took taken back, liquidated, and the proceeds put into welfare programs, to enable families tossed about like “collateral damage” the lifeline of some food, clothing and, wow, even shelter! I have no problem with putting every bloody “fat cat” behind bars, say in Guantanamo Bay, for a while. Maybe then they would truly appreciate being alive and find a far more human set of priorities. This should start with the woman in Merrill Lynch who designed the base for CDS etc.

Obama has to figure out how to get a far “greener” path started, which means weaning the US off of wasteful behaviour. There are kits and instructions on the net for making wind turbines, solar panels, and lighting that is LED. Time for the common person to get busy saving things, remaking what used to be discarded into products again. Recycling soda cans, glass bottles, plastics, and using cloth bags, all would be a good start. This is where Obama may be able to lead by example. Install solar panels on the White House, use low wattage bulbs, and get a composting program going for the gardens.

Obama can lead his country well, if some of the petty, stupid games quit. I am amazed at how unbelievably childish some of the “adults” in Congress and the Senate are. Wow! “Gimme!” “I Want!” “No, you can’t play with my toys!” ” You cannot change things, because ‘that is the way things have always been'” Phooey! Grow UP! This is a new world here, things have changed, and get your head out of the bloody sand! In short, Obama can do a lot, but it DOES take us to help him out, not put childish, self-serving blocks in the way, “just because”.

The auto industry may have BEEN a major industrial engine, but the technology they use is from the last century, not pertinent now. Obama can tell car makers to get with the change. Take a look at the Tesla automobile! It is totally electric, can go like greased lightening, and has a range for driving that is as good as most people will ever need. Get rid of the hydro-carbon, gas guzzling technology and devise other choices.

President-Elect Obama, if you want to see a banking system that is the best in the world, I strongly suggest you check out the Canadian system. None of the banks there are even close to being in trouble, lending is going on, and they got hit in a very minor way with any of the CDS or other “funny-money” ways the US banks did. Look at the regulations! Those banks are NOT government owned, but they are regulated in ways that have allowed them to continue to work effectively! Amazing!

Health care, it needs to be changed. No question. People are dying, kids are getting sick and dying because the costs are far too high, the paperwork is eating up a huge chunk of the cost of doing business. What the hell? Paperwork accounts for a huge part of the costs? If anyone gets into an accident, it can mean death from untreated injury, or bankruptcy if the injury is treated. Talk about living between a rock and a hard place. I agree with Obama, get the costs down.  But it can be done by those who are not sick working to demand answers, demand better service, and certainly demand the FDA get off it’s butt and realize that most of the generic drugs coming from developed countries ARE made to high standards. Help the president by joining in, not making his job harder. It means demanding generic equivalents be prescribed by the doctors, hospitals, so all of the people get a better deal. Remember the “name brand” companies make huge, fantastic profits, and they have a vested interest in YOU buying them.

Jobs, and more jobs, the necessity for people to have meaningful work, we all need them. President-Elect Obama has the correct focus, here, but there is no way in hell he can do THIS ONE ALONE! This is where the recycling and reusing all those discarded materials could make work. It takes imagination, thinking, and yes, even work to find new uses for all those discarded things once used. For example, take plastic soda bottles and turn them into automated watering devices. It is as simple as filling the bottles with water, then turning the bottle upside down and pushing them into the soil around plants.  Start making solar panels, then put them on every house in town! Wind turbines work with even small breezes if they are made with a governor on them. There are some that can be made at home, and if at least 10% of the houses have them, the power grid is boosted! There are literally millions of ways to turn garbage going to landfills into useful things again, from braided rag rugs to vehicles. Help your president and your environment all in one! If nothing else, set up a recycling depot for local things.

International relationships need attention too. Wow, this list is getting long, but with help via the internet, it can be achieved! Talk to people around the world, listen and discuss issues with them. President-Elect Obama got that one right! He did go to the internet to talk and listen. Give the US the help in returning to a better international status by being a little more concerned about others, listening to other ideas. Why? Because maybe someone elsewhere in the world has the answer you need to solve your own problems, or you have the answer they are looking for!

Yep, the President-Elect has his work cut out, but with help from all of those in the world, maybe, just maybe, we all can lighten his load just a little bit.

This is the End of an Era

The Government is NOT doing what is necessary, there is a better way.

Well, after watching a huge number of news broadcasts, reading until I feel like putting every written word into a huge pixel black hole, I have come to see that the way things have been working for the last 25-30 years is over, done like our Thanksgiving turkey this weekend.

People have had the expectation that they could borrow up to 6% over their income and still keep going. That is bizarre to me. Spending 106% of your income and expecting to keep things going is expecting yourself to become more than you can ever be!

Housing prices have risen so fast that the costs have ballooned way over the true price, the real value, of those same houses. Speculators, agents who took fees to sell off the bundled mortgages managed to make the whole market balloon to the point where things went BANG!

Make no mistake, just like Milken, et al , the agents had no compunction about taking the fees, and putting ordinary mortgages into a highly risky place, leaving those who were the original lenders and the house purchasers in a position where it became impossible. There became a distance between the lender, the mortgage and the purchaser. The agents did not care, do not care, and will not care who the purchaser is or was, and furthermore the agents have their money and can walk away without even blinking.

The Paulson idea of taking out the toxic sludge is never going to work. Why? Because it is impossible to put a value on paper that is basically completely impossible to unwind again.

The markets should go down again this week. Why? Because the toxic sludge from the collapse of Lehman Brothers is going to be due. Those who were tied into that sludge are going to have to take some huge losses again.

There has to be a complete understanding from main street here. No longer can we use credit to solve problems, no longer can anyone expect to have a charge card without realizing they are literally borrowing money at exhorbitant interest without that interest being a huge balloon that also goes BANG! The worst thing that older people can do right now, in my opinion, is to take out a reverse mortgage. Why? Because they may end up with a home that is never going to be worth what they are borrowing against, and end up being forced to repay instead.

Whether this all ends up being a very long, very harsh road, or a bumpy ride that is shorter depends on how banks deal with the mortgages that are not in default, yet, and the people who have taken those mortgages out rewriting the mortgages to reflect the true price of the houses in THIS current market.It also truly depends on how the various administrations in the US, Europe, Britain, Hong Kong, Australia and others deal with this. They can either make it a hell of a lot worse or shorten the drop. My gut feeling is that, unfortunately, the advice that most of the governments, administrations and other are getting is wrong, totally wrong.

Unfortunately I have been watching this all happen and, some years ago, realized the way things were going would end up dropping like a huge boulder on house at the bottom of the hill. In other words, although this seems surreal, I am not all that surprised. The idea that capitalism is self-regulating is just flat silly. Greed cannot be regulated, only controlled, using laws and regulations. Yes, there are flaws to what humans do, but at least we all SHOULD be learning WHAT NOT TO DO!

This could get very, very ugly.

Toxic Debt, Banking, Greed and Stocks

Well it seems the banks who currently have toxic debts on their books want to keep them. Why?  Apparently the upper echelon want to make sure they keep their fat pay cheques, their bonus structure, and their ability to use “golden parachutes”. If the Secretary puts up a reverse auction (bidding starts high, then goes down) that would allow the government to be involved with the banks and cut the income, collapse the “golden parachutes” and put a limit on the bonuses or pay cheques.

What happens when the banks keep the toxic debts? The depositors have their money in an unhealthy bank, the stability of the bank is undermined. All in the name of greed, apparently.

Last night the candidates were asked what they would do first when they got into office. Personally, my agenda would be to find those very upper echelon people, investigate them using these refusals, and if possible persue charges. The other thing I would do is go into the books of Fanny Mae and Freddy Mac for some of the information on shady trading that is documented there and follow that up. Names of companies, traders, etc should be there, so find them, follow the paper trail and do what is necessary to take those same greedy, self-centered, narcissistic people out of the system, if only by taking away any licenses etc they may have.

Second on my agenda is those damn lobbyists. Kick them off the fat-cat train, get them out of the halls of the House of Representatives, the Senate, and off capital hill.  If necessary, create a law that makes lobbying highly limited. Yes, there are some lobbyist for education, schools, social issues, and they need to have a voice somewhere, but there are some lobbyists that want to promote greed, capitalism and money interests and those must be dealt with severely.

The entire world has now been sucked into this whirlwind. I can bet that a lot of people around the world are looking at the very shady business practices and cursing out loud. This is one mess that must be cleaned up, starting with those who pushed for the change in regulation in congress, in the banks, in the investment houses, and put those people out of power. That will include Paulson, because as an executive in Goldman Sachs he pushed for the opening of the door to creating some of these same toxic financial papers now choking the entire world banking system.

I can bet a lot of the people who played this pyramid scheme, ponzi game, whatever you want to call it, are now becoming aware of just how much damage they could cause. I can also bet that the impulse to find those people is growing. Let the law, the FBI, do that job.

I have read so much financial information in the last two weeks I almost feel like a banker myself. Good grief! Maybe this will, pardon the pun, pay off later. What I have found out is that putting trust in the stock market, the investment companies, is often betrayed. That betrayal is fast turning to anger, outrage, and frustration.

Obama needs to alleviate some of the frustration as quickly as possible. Find the players who played with lives, played with jobs, played with the stock markets by selling empty, toxic papers bundles, and abusing the trust of not only the American people, but the banks and people over the entire world. This will not be easy, mostly because the banks will demand privacy. Phooey! When you wreck an economy, cause people to loose homes, put self-centered greed and interest ahead of anything else, you have become a public figure, in my opinion.

Economists have no clear idea where this is going, mostly because this is unique. Yes, banks caused some recessions, Savings and Loan fiasco caused some serious losses, but this has become unique because it involves the world now. It started in the US, it started with the CEO’s and upper echelon, but it is going to finish off a huge number of jobs, good companies, and maybe a far longer list of decent neighbourhoods too.

Hang in there, this is going to be going where no man or woman has ever gone before, without the spaceship. We all live on one small planet, so maybe this is the time to truly become neighbours.

Stupidity Explained, Now It “Figures” Literally

http://scienceblogs.com/goodmath/2008/09/economic_disasters_and_stupid.php

This one says a lot about the way this whole thing got so tangled up, so obscene in the ways banks, investment bankers, and insurance companies got into the game. Let it be no mistake, this was a game to them, without any families, any real touch with the pain that bad loans created.
The person who wrote this is NOT a politician, NOT someone whose specialty is economics, but IS someone with math skills, and logic.
I read just this posting and started to swear, my eyes bugged out completely at some of the sneaky, underhanded and just plainly obscene practices here.
Unfortunately it appears to be just another version of the Savings and Loan fiasco, with a few new twists.
How this all works out is beyond my capability to foretell, and what happens to those who pulled off some of the game strategies, I don’t know.
What I do know is that I live in a country where the banks, the investment firms, the insurance companies are regulated.
Paulson, the Federal Reserve Bank, and you, the unwitting tax payers, will be the ones to deal with this. International banks will get some of the funds here, but remember, they also built parts of your economy. Maybe some of them got suckered, like a lot of people apparently did, but with the international banks far more regulated, far higher scrutiny on them, at least your taxes will go to help you out with ethics being the underpinning on the international banks.
Paulson, the FRB, the Senate, the house of Representatives all knew the foreclosures, the money, the sucker loans and the insurance between each other were going on as long as two bloody years ago. This should never have come as a surprise, period. All of them experienced the fiasco with the Savings and Loans institutions, and definitely John McCain would be well aware because he was in with one of the Savings and Loans in Arizona.
However this works out, and it may well take a couple of DECADES to even get the strings unwound here, there will be some pain, there will be a serious slowing of the entire world economy, and maybe, although I hope not, a full recession which turns into a real depression.
Maybe this is what NEEDS to happen. People will learn to live without borrowing to buy a new tie, or a sandwich, by putting the charge to a bank charge card. People will learn that money that they put into deposits does have risk, some of it high, some of it very low. Maybe some will learn to be a lot smarter when dealing with the financial version of the Barnum and Bailey circus.
Remember, there is a sucker born every day. Maybe it is time even the bank CEO’s recognize their own faces in the “Great Mirror of Sucker”.
This is a harsh way to learn some lessons, but maybe that is what is needed now. I don’t know the future, and maybe that is a good thing. I DO know the day has come where the sucker punches to the economy finally took it down. Hard.

Savings and Loan Fiasco and Familiar Names, Bush and McCain

I don’t live in the US, so I was not totally familiar with the Savings and Loan events of a few years ago. So, I did some looking around and voila, some familiar names show up!

McCain pressured regulators for Keating, Lincoln Savings and Loan

It seems that the current candidate for president was part of the problem in Arizona and the Savings and Loan fiasco, as was a member of the current president’s family. McCain was “rebuked by the Senate Ethics Committee for excercising ‘poor judgement’ for intervening with federal regulators on behalf of Charles Keating, head of Lincoln Savings and Loan”

This certainly explains why McCain is not in favour of any regulations or laws covering monetary transactions. Yeah…………..just what the US needs at this point, someone who was in the inner circle of the Lincoln Savings and Loan fiasco.

The second person is Neil Bush, with the Silverado Savings and Loan, a member of the Bush family currently in power. No wonder I had a very strong feeling the last person to trust with making decisions about this current “crisis” was not able to make fair or even dispassionate decisions.

Then, I decided to follow this down the line, and voila, the same mechanisms, the same type of fraudulent practices are being used again, so I now KNOW this has become a business practice, with the names of the corporations the only thing that did change. Bloody wonderful.

So, twice the financial world has abused the people in the US, twice the taxpayers are being TOLD, not asked in a referendum, to cover the butts of the very people who have just gone from scam to another.

Time for the US to finally realize they do have the vulnerability to these practices, to put into place some strong laws, not regulations, and to limit the way some people hide the scams.

For crying out loud, how long will people tolerate this crap? It has now become the Paulson SEC-FED Septic Bank, with all the crap and paper being flushed out of site, like a drug dealer just about to be caught with the goods.  To carry this further, time to flush out these scammers and put them completely out of business, literally. Remove their licenses, remove their positions from corporate boards, remove them from any and all access to monetary funds whatsoever.