Sunday, April 05, 2009

Fictionalized Accounting -- AKA BS

Forgetting politics, I am getting tired of turning on the TV and every day there is Obama telling us what the government is doing next. A lot of Presidents were accused of shunning the media, not this one. He even stood up the other day and told us that the government would honor GM car warranties. Just who is going to pay that bill? It’s nice to know that when the Defense Department buys a tank from GM, we the people cover the warranty repair.

It seems as if the taxpayer’s wallet is removed from this whole situation. Congress is going to lower our taxes, on top of that many people won’t even pay taxes, (they’re unemployed). Government revenues will drop by 50% and at the same time government spending will triple.

The housing collapse is getting “better,” it still doesn’t cost anything to buy a foreclosure. And if it doesn’t work out give it back to Fannie. At least you get to live rent free for a year.

This bail out money going to the “banks” is another strange item. Why loan to perspective home owners at 4.5% interest when the bank can put in into the latest and greatest bubble credit card debt? In that market, financial institutions can clean a plow with 28% interest return on cash loaned at zero percent interest (by way of the Bank of Uncle Bernanke Sam). I get 5 credit card applications a week still. It’s hard to figure out why these companies issues more; haven’t they done enough damage already to people that are broke?

The Federal Reserve lists credit card write offs at 8.82% for February. They suggest that it could approach 10% by year end. I suggest it could approach 14% by June. The aggravating thing about credit card debt is the fact that many families could conceivably have 20 to 30 cards.

Sane banks might suggest that all credit be cut off; our government will suggest otherwise, extend credit to stimulate the economy. Do you get the feeling that the people in charge haven’t got a clue, but by golly they’re going to fix this mess, even if it kills the taxpayer?

The irritating statements I see being made lately suggest that the worse is over and we are emerging out of this slump. It’s kind of like being hit by a car, laying on a rail road crossing and the train is right around the bend blowing its whistle.

9 comments:

Gary said...

I think the situation is dire. If the reports that have come out recently about the corruption and fraud at the major banks and in the government (Bill Moyers show), Summers' connections to Wall Street, the potential for gaming the PPIP (with the apparent blessings of Geithner's Treasury Dept), and the TARP oversight chair (Elizabeth Warren) recommending firing bank CEOs and wiping out shareholders don't catalyze change, then nothing will. It will be a sad chapter in American history if they get away with the complete looting of our country.

Right now, I'd say they think they will get away with it based on the stock market reaction.

Gary said...

"Do you get the feeling that the people in charge haven’t got a clue, but by golly they’re going to fix this mess, even if it kills the taxpayer?"

Sorry for the rant earlier. I meant to say that I cannot believe that they are that clueless, therefore they must be corrupt. They do not care about the taxpayer. They only care about saving the too big to fail institutions and their friends who run them.

AIM said...

Nothing you can do about this on an immediate basis. Too late now. Americans have not been vigilant and have continued to lose their freedom and allow the pols and the financial elite to send up down the slippery slope. Attempting to fix this now is summed up in the old maxim "closing the doors after the horses have left the barn". It seems to be our human nature to not predict consequences and to require a major crisis to force us to make emergency and drastic changes in order to avoid total catastrophe.

Only thing that can be done at this stage of affairs is to predict what the consequences of all these government actions will be and learn to survive (preferably prosper) in the environment they are creating.

AIM said...

Should read... send us down the slippery slope.

Personally I think Congress is the biggest group of criminals in this country. The low level of ethics that exists in this government is astounding. 98% of them are in treason to their country. They've been eroding the integrity of this country for decades and decades. And we have no one to blame for it but ourselves.

If the day could ever come that a majority of Americans could take full responsibility for creating the current state of affairs (for allowing our country to go in the direction it has) and take intelligent and informed action to revert disaster and get us back on course... that would be the only chance for this country to evolve out of this condition.

The level of irresponsibility we are at is... criticism, despair and waiting for someone else to resolve our plight. Some intelligent leader, some saviour. We are all waiting for a Ghandi, Buddha, God, Superman or somesuch. This will not happen... thus another empire in the history of earth falls, another chapter ends.

Anonymous said...

Austrian Economics, anyone? It sure as hell doesn't look like Keynesians know what's going on. We haven't had free market economics in over a century but everyone sure loves to blame free market economics. What has government touched that it didn't screw up and make worse?

AACC

AIM said...

Sorry AACC, no Austrian economics for us. This country has been kidnapped and brainwashed by Keynesian theory and has been deeply immersed in it for the last 80 years. It has saturated the minds of our policy makers and to them it all that exists. Government has latched onto it and won't let go ever, since it facilitates their agenda to spend spend spend.

The only way it will change is if we force our representatives to change it (per my 1:04 post... and that would take an informed, intelligent populace that is very involved and proactive) or when this generation dies off and maybe stops pushing the theory forward.

Everyone needs to scramble and find their own personal solution to the environment that is being created. It's everyman for themselves as we head into a European-like socialist (and in some ways fascist) state.

Anonymous said...

Gary:

Trying to be optimistic here, I think we're seeing the capitalist version of wealth redistribution in action... fat cats grab all the money, the money evaporates, everyone ends up with whatever property they can physically hold, and we call it even.

Doesn't look like the government can stop it... I just hope it's relatively peaceful.

OMTM said...

Actually, I think its high time for a little transient optimism. The stock market was down 50% several weeks ago, yet this crisis is still in its development stage. The U.S. will utilize whatever tricks it has left up its sleeve.

Gone Soon said...

Round 1 is done. Mike Tyson hasn't knocked out the USA yet. But he'll be back for round 2, 3, 4, 5... This crisis is far from over.

It sucks to be a serf. But Zeus couldn't make everyone of us czar. Even as a serf, there are things we can do to shield ourselves, in our limited capacity, from the collapse. Like stocking up on provisions and money. Like building a network of friends & family. Like staying healthy.