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.

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.

Recession, Depression, Whatever You Call It

John Kenneth Galbraith has authored a number of books, “The Crash of 1929” and others on political economics. He has been an ambassador, a writer of books and he has a solid take on the ways American influence has affected the world, good and bad. Ironically, he is a Canadian. If you want to read some enlightening books on economics and the world, find his books. They may have been written years ago, but they are certainly relevant now. If you want to cut to the relevant part here, go to around the 43 minute mark on this video. You will be astounded at how much things are almost duplicated then, and now! Bloody scary, bloody ridiculous!

There is an impression that if left alone, the government to stay out of the market that the financial markets, by some God given power, will solve the problem.

This is from the years just before the  Great Depression Do these words sound like some of the current Congressional leaders? The Senators? Even the President himself? Take a look at how Eisenhower, Roosevelt managed to deal with economics, the withdrawal of the US in unpopular war (Korea) and realize how much history has to teach the current administration and any administration to come!

Even if they manage to pass the bill facing the US right now, the economies of the world are NOT going to be in any kind of rosy state for quite a while. This bill, in whatever form it takes, will NOT solve the problems, it is just a start. Period.

The massive consumption of goods is not going to continue. I figure that this will affect all of us for at least 5 years, maybe more, so if any of us figure that we can resume spending, borrowing using credit cards and other lines of credit, we are WRONG.

There are going to be jobs lost in Asia, China, the US, and Europe, but what this bill may do is to keep those losses to a lower level, not stop them. Business will not resume as it did before the banks and  the toxic waste they devised became known. What is really mind boggling is that most of the very banking “experts”, the economists, and the ordinary people don’t even understand this. Most of us, including the banking and economics experts find this far too complicated, far too extensive, far too large in scope to figure out.

Regardless of how this comes down, I am going to see property prices drop more, although here the property prices are still way over the true level in value anyway. The foreclosures in the US will continue, they will rise and so will bank failures.

Get the idea? This bill is NOT a cure, not a way to solve the problem, just a small beginning, with pain still to come. The international news knows this, why on earth do the Americans in the administration, including Paulson and Bernanke not know it, nor the President?