13 Mar 09 Stewart vs. Cramer
Jon Stewart definitely gets the last laugh lolz.
Part One:
Part Two:
Part Three:
11 Mar 09 CNBC On The BBQ
Jon Stewart flames CNBC and Jim Cramer
05 Mar 09 Wall Street Whiners
Jon Stewart skewers Wall Street and CNBC, which at this point has zero credibility.
13 Dec 08 Bastard Republican Vampires
Michael Moore has a few words for those Republican Senators who went after the UAW:
We have a little more than a month to go of this madness. As I sit here in Michigan today, tens of thousands of hard working, honest, decent Americans do not believe they can make it to January 20th. The malaise here is astounding. Why must they suffer because of the mistakes of every CEO from Roger Smith to Rick Wagoner? Make management and the boards of directors and the shareholders pay for this.
Of course that is heresy to the 31 Republicans who decided to blame the poor, miserable autoworkers for this mess. And our wonderful media complied with their spin on the morning news shows: “UAW Refuses to Give Concessions Killing Auto Bailout Bill.” In fact the UAW has given concession after concession, reduced their benefits, agreed to get rid of the Jobs Bank and agreed to make it harder for their retirees to live from week to week. Yes! That’s what we need to do! It’s the Jobs Bank and the old people who have led the nation to economic ruin!
But even doing all that wasn’t enough to satisfy the bastard Republicans. These Senate vampires wanted blood. Blue collar blood. You see, they weren’t opposed to the bailout because they believed in the free market or capitalism. No, they were opposed to the bailout because they’re opposed to workers making a decent wage. In their rage, they were driven to destroy the backbone of this country, not because the UAW hadn’t given back enough, but because the UAW hadn’t given up.
12 Dec 08 Republican Economy Killers
Republicans in the Senate seem intent on creating a depression, perhaps so they can attempt to blame it on Obama at some point in the future. There’s a lot of confusion in the country over whether we should or should not keep American auto manufacturers in business. Instead of giving any recognition to the true issue, the lack of credit for new car buyers, the Republicans are fear-mongering. They say the car companies are bad and the unions are bad, when in fact the banks that got bailed out still aren’t making loans.
The real issue is whether we want to see three million jobs go into the toilet for Christmas. And after that? More millions of jobs and uncounted small businesses who are patronized by those auto industry workers would disappear within a very few months. All the neighborhood stores and restaurants will fall like dominos right behind them.
At this time the stock market has been open nearly two hours and is trending steadily down. How low can it go? We may be about to find out.
UPDATE: George W. Bush may be a fool, but he’s not as foolish as those would be union-busting Republican Senators. The White House announced this morning that cash from the $700 billion bailout fund will be provided to GM and Chrysler. The stock market responded positively and may close up for the day.
03 Dec 08 What Would Studs Do: Dec 08
Some friends have asked which investments make sense in this deflationary economy. To put it simply, not many. It’s going to get worse before it gets better, and the stock market could still be forced down significantly by liquidity pressures. Short term T-bills, under two years, and munis are almost as good as it gets.
Your best bet is the Swiss franc. As much as 20% of your nest egg should be converted to Swiss francs and put in a mattress, that will very likely out-perform any dollar-denominated investment over the next four years. The Swiss systematically bought gold and silver over the past decade and today it’s the only currency backed by more than faith. If you have the wherewithal to go to Switzerland and open a bank account you’ll be able to earn interest and invest there, that’s the best play of all.
If you’re inclined to buy metals yourself, go for 80% silver, 20% gold. If we end up in a depression-style barter economy at some point those one-ounce silver ingots will work out very nicely. For a more esoteric barter play, pick up some cases of ammunition. 9mm handgun rounds and 12 gauge 00 buckshot are commonly used all across the country. The top six deer cartridges in North America, in terms of factory ammunition sales, are the .30-06 Spfd., .270 Win., .30-30 Win., .308 Win., .243 Win., and 7mm Rem. Mag. Check with your local dealer to find out which of these rounds are most popular with deer hunters in your area.
19 Nov 08 Ostrich In Chief
Mitt Romney is assuming the mantle of Ostrich in Chief for his party. In one those “let them eat cake” moments he strongly urged in today’s New York Times that the big three automakers should be forced into bankruptcy. He believes that bankruptcy, rather than putting them permanently out of business, will result in a Walmart-style royal screwing of their workers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
Now in the first place, I don’t believe there would continue to be an American auto industry if these companies are forced into bankruptcy. In an economy like this it doesn’t matter how energy-efficient your cars are, or how cool they are, or how cheap they are. Nobody’s buying anything, foreign manufacturers are just as screwed as the Americans. You know those foreign governments are going to keep their auto businesses afloat, they’d have to be idiots to let them fail.
But the real issue is whether the Walmart employee model is the one we want for this country’s future. Mitt Romney and the Walton family obviously love it. The Waltons have gotten mega-rich by screwing manufacturing and sales employees. I’m sure they’ve pumped a lot of contributions to their “free market” Republican friends to keep the status quo in place. It’s a simple equation, the very rich get richer and every cent comes out of a working man or woman’s sweat.
17 Nov 08 Bush The Comedian
One of those things you just can’t make up, from Mahablog:
It’s dark humor, but it’s still humor; first, the headlines:
- 85,000 homes lost to foreclosure in October
- Bailout Lacks Oversight Despite Billions Pledged
- Hard Times, But Big Wall Street Bonuses
- U.S. Jobless Claims Reach Seven-Year High of 516,000
Now, here’s the punch line:
Like, something bad might happen if we do?
17 Nov 08 Autos Drive Retail Sales Drop
According to the US Census Bureau Advance Monthly Sales Report that came out Friday, retail sales in October 2008 fell to approximately 4% below last year’s levels. Two sectors of the economy were responsible for most of the decline: the auto industry was down by 23% and home furniture and furnishings sales dropped 14%. If the automotive sector is factored out of the overall numbers, the economy grew by about 1% year-over-year.
The primary cause of the sales drop is not the fault of the big three auto makers. The underlying issue is that banks will not provide credit to new car buyers. The banks in turn point to the expanding group of people who are not good credit risks due to problems with their mortgages. The ongoing bank credit crisis means that even good credit risks are not being given loans.
It is very clear to everyone, except perhaps the Republican members of Congress, that the car business is screwed until sometime after the mortgage and credit crisis is over. Until that time the government has no choice but to provide the auto sector with enough cash to stay afloat. If the Republicans refuse to act, the USA will no longer have an auto industry.
According to Calculated Risk the following graph shows the year-over-year change in nominal and real retail sales since 1993. The dramatic fall-off over the past few months is almost entirely driven by the collapse of the automotive industry, due to lack of financing.
12 Nov 08 Cheap at Twice the Price
Image thanks to Nick Anderson / Houston Chronicle
I learned in high school that when your car starts messing up or making funny noises, if you don’t fix it right away, then you get to pay twice as much to fix it later. Likewise for the auto business. If we don’t fix it now (and by that I mean this year) then we’ll end up paying the full cost of re-creating the industry from scratch. In the meantime we’ll be paying unemployment benefits to pretty much everyone associated with making or selling cars.
If the big three auto manufacturers go bankrupt there would be a huge pile of collateral damage. Car dealers, parts manufacturers, finance companies - they’ll all go down like dominos. A couple of weeks back in A Panic Like 1873, Not 1929 I explored the roots of this economic crisis. Restoring liquidity while keeping people employed is the only way to limit the damage from the mortgage loan disaster. And that’s going to cost trillions of dollars, not billions.
29 Oct 08 Paul Krugman On The Economy
If you want to understand the basic facts of the economic crisis facing us today, take 30 minutes to watch this video. Charlie Rose interviewed Paul Krugman on October 23rd, shortly after he won the Nobel Prize in Economics. Krugman discusses the causes and outlines several possible solutions.
If institutions need to be rescued like banks, they should be regulated like banks.
27 Oct 08 What Would Reagan Do?
Just as I felt myself drifting off on the waves of a beautiful dream last night, with a smokin’ hot blonde in a black bikini, Ronald Reagan showed up. “Studs, let’s have a beer and talk some economic treason, whaddya say?” Being that it was Reagan, I forgot all about the blonde for a minute and said “Sure Ron, whatever you want,” and followed him over to Molly Malone’s pub.
“We’re going to need a lot more than $700 billion dollars to get out of this mess we’re in, and there’s only one way to do it,” says Himself. “Yes, you can hear the words already, can’t you? It’s time for Voodoo Economics, and not a moment to waste. All those Economical PhD schoolmarms are going to mess their pants, but there’s no other choice.” Then the blonde showed up at the door, still wearing that little black bikini, and I took my leave. “Until next time!” I told Ron. But I digress.
Voodoo Economics is one of those concepts you can’t wrap your arms around, but you know it works. Rather than listen to some professor profess his allegiance to a theoretical guru of greed, you step up to the craps table, you put your money supply on the line, and you start shooting naturals. Just to prove I paid attention to one of those professorial types in the economics class I took back in the day, I’m going to use one of those schoolmarm phrases: acceleration of the growth of the money supply. Still awake? I hope so, this is important stuff.
When the money supply is growing at a nice, safe, positive rate everyone is happy. When the money supply grows too fast, with acceleration well over the speed limit, you get inflation, which is the problem Ron Himself faced back in the day. When the money supply is shrinking, you’re dealing with a negative acceleration rate. That’s going to be Barack Obama’s problem to deal with, and all too soon. Too soon for him of course, not for us, because if these tax-cutting, budget-balancing sycophants stay in power much longer there isn’t going to be any money supply at all. But I digress.
Back to the craps table. When you have too much acceleration in the growth of your money supply, you pump up the vig until people stop borrowing to shoot craps. When you have a negative acceleration in the money supply, you pay people to shoot craps. That’s right, we’re talking Uncle Sam’s Negative Am Deposits aka you keep the vig. You simply look Mr. Banker in the eye and say “I don’t care about your balance sheet, your treasurer’s dirty drawers, or your mother’s nest egg, it’s time to lend some money.” And then for every dollar they lend you give them a dollar of Uncle Sam’s Negative Am Deposits. Sounds too simple doesn’t it? That’s why they call it Voodoo Economics boys and girls. All I can tell you, and this is from the mouth of Ron Himself, is that it works.
24 Oct 08 Roots of the Economic Crisis
It’s a rather simple equation when you examine the history of how the economy got to where it is today. Banking and investment regulations were gradually erased over a period of 28 years, beginning in Reagan’s first term as President and culminating with the repeal of the Glass-Steagall act in 1999. Conservative “free market” advocates insisted that the market should be the ultimate arbiter of what is, and what isn’t a good investment. Today the market has spoken, and the message is clear. Here’s a quick history lesson, in little more than a minute.
Thanks to Matt Yglesias for finding this video.
15 Oct 08 A Panic Like 1873, Not 1929
A lot of comparisons have been made in the press between the current bank liquidity crisis and the Great Depression of the 1930’s. However when you look at the fundamentals there are some stark differences. The contraction of the money supply in 1930-31 was an after-effect of the stock market crash of 1929 and hyper-inflation in Europe. In today’s economy the huge losses in the stock market are the result of a dramatic contraction of the money supply. That’s also what happened in the Panic of 1873, and the result was a four year depression of the economy that dwarfed the depression of the 1930’s.
More after the jump …
(more…)
14 Oct 08 Thank You Mr. Treasury Secretary
Woke up this morning to see that the thing most on my mind for the past few days is being announced today, a pile of cash is being dumped into the banking system. Too bad the man we get to thank for that is the same man who lit the fuse on this mess by kicking Lehman Brothers to the curb last month. $250 billion is just the first small bite of a very big apple.
Bloomberg link:
http://www.bloomberg.com/apps/news?pid=20601068&sid=aJ2tc72IixiQ
The Treasury chief was forced to change tack from an initial plan to buy distressed assets from banks after the financial panic caused banks to hoard cash and send money market rates to record levels. In its biggest effort yet to halt the 14-month credit rout, officials will also offer guarantees on new bank debts and start purchasing commercial paper in two weeks.
The Treasury’s stock buying program will begin with nine banks, which it didn’t name. People briefed on the matter said $125 billion will be disbursed in days: Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co. and a combined Bank of America Corp./Merrill Lynch & Co. each will get $25 billion, while Morgan Stanley and Goldman Sachs Group Inc. will get $10 billion each. Bank of New York Mellon Corp. said it will receive about $3 billion and State Street Corp. said it’s getting $2 billion.
13 Oct 08 The Economic Rescue Package
Congress gave $700 billion dollars to the Treasury Secretary ten days ago, with instructions to use it to restore liquidity to our banking system. To date nothing has been done. Secretary Paulson seems to be unable to break away from the discredited free market ideological straight-jacket of the Bush administration. The situation worsens with each day that passes. There is only one workable option on the table: the government must buy stock in our banking institutions in quantities sufficient to restore their balance sheets. Only then will the banks be able to resume lending.
More after the jump …
(more…)
