How Low Can the Market Go? Obama’s Plans Ride on the Answer
So what does this all mean in the short and long term? The Economist explained even before the most recent crash of the Dow:
Mr Obama’s forecast is already more optimistic than the private sector consensus was in January, and that consensus has since become more pessimistic. Ben Bernanke, the Federal Reserve chairman, said this week that the recession would end this year only if the financial system stabilizes, which so far it has not.
A longer recession or long-term stagnation pose two distinct fiscal risks. First, Mr. Obama will be (rightly) reluctant to raise taxes and tempted to extend parts of the stimulus package if unemployment is not dropping by 2010. Premature fiscal tightening, after all, could lengthen the recession, Japan learned in the 1990s.
Second, a longer recession makes it harder for America to grow out of its debt burden as it, and other countries, have done at previous debt peaks.
In short, the deepening recession throws a big wrench into Obama’s plans to skip the task of reviving the economy and slide right into enacting the agenda of ultra-liberalism. If revenues decline, businesses continue to fail, and the investor class continues to abandon the U.S. economy it makes his plans to further encumber “the rich” and private enterprise that much more problematic. Even the New York Times notes that there is an increasingly apparent disconnect between, on one hand, the dismal economic outlook and, on the other, the rosy scenarios and big government expansion envisioned by the Obama team.
As a political matter, the worsening economic outlook also puts at risk Democrats’ electoral prospects. In the race to replace Kirsten Gillibrand in New York’s 20th Congressional district, Republican Jim Tedisco is running on a tax cutting, populist message and attacking his Democratic opponent as a financial swindler and proponent of the failed Obama economic program. A win by Tedisco, who leads by double digits, would be the first sign that voters aren’t enamored of the Obama high tax, big government, bailout mania approach to the economy. Democrats will also have to run gubernatorial races in Virginia and New Jersey this year in the face of cratering economic news, rising unemployment, and enormous budgetary shortfalls run up under Democratic governors. Once again, the popularity of Obama’s policies, as opposed to his personal appeal, will face a test at the polls.
But the real action will be in 2010 when the Obama economy will be at issue. That’s the target for conservative activists (including those who assembled at CPAC last week) and the GOP’s high profile leaders. (Newt Gingrich and Mitt Romney have already declared themselves committed to doing whatever it takes to unseat incumbent Democrats.) While conservatives are incensed over the president’s big government agenda, all voters will have something to complain about if their 401(k)s continue to slide, unemployment remains high, and economic growth hasn’t returned.
In sum, all incumbents, even ones with adoring media coverage and magnificent speaking skills, face certain realities. Economic chaos is the responsibility of the party in power. Wrong track numbers in excess of 65% correlate with rejection of incumbents. And there is nowhere for the party in power to hide if they control both ends of Pennsylvania Avenue.
The economic panic which is now sweeping the markets has the effect both of upsetting Obama’s grandiose plans and undoing his new “permanent” Democratic majority. And so, the question “How low?” may become an increasingly critical query for the president. His agenda and his party’s political fortunes are riding on the answer.
If a deeper recession/depression helps derail Obama’s social agendas, and opens an opportunity to undo the “stimulus” beast. It may just be worth it. And I can’t believe I’m saying that.
The irony is astounding. In the 20th century, USSR was the force for socialism, and USA was the force for democracy and capitalism. Now this, “Putin warns US to eschew socialism” http://www.therightperspective.org/?p=1472
What price, sanity?
This Election Eddy we have created via our IF electorate (“incumbent flush”) is a sort of drunken relay race in which the torch is passed from one stumbling, weaving, unsteady hand to another.
We simply say, “throw the bums out, bring in the other bums”…and the narcissitic fools, inebriated with newly found “power” over us, declare a mandate for their particular brand of excess and impose a Rube Goldbergesque machination to “fix” the direction the breeze blows.
It appears at the moment, that the current medicine men have started a brush fire by lighting an ACORN or two and began looking for a liquid to put it out. Kerosene is as good as any other liquid, apparently. Tucked away neatly in the safe haven of an entrenched media design, they risk no exposure to the elements. Sweetheart deals don’t merely come from now bankrupt lenders, or pals who cooked the books at Fannie and Freddie…but from a bankrupt Fourth Estate…wielding alternately a sword and shield at what it chooses to see with a blind left eye and a myopic right one.
Out here in the cf bleachers, watching the game unfold…a little rain brought out the TARP, but for some reason the groundskeepers decided to cover the box seats instead of the field. This left all the concessions to people who don’t have the money to pay for them…while those who can…and do…are left in the dark…and the field is becoming unplayable…even dangerous. Watching this behavior on TV, the future box seats purchasers have cancelled their tickets, not wishing to endure a similar fate…and the price of those seats has dropped to new lows. And the field becomes more unplayable.
The new bums have the umpires on their side in a rigged game, but can’t seem to field a team that hasn’t been caught in a subsistence abuse scandal. Every one who comes up to bat… swings for the fences, then trips coming out of the box.
The “other” bums, who have been trounced recently, must suffer a moving strike zone, rather “fluid” fair and foul calls, and anyone connected with the military, CIA or Wall Street with a permanent “spitter” by Hollywood, academia and the entrenched media.
What price, sanity? Only the price of a country I once knew and loved. It’s a long, long season I’m afraid. And not even newly installed lights may save us from the coming darkness. Throw the bums out, bring in the other bums.
It’s frightening to even consider the possibility that Obama is intentionally talking down the market and destroying Americans’ life savings.
However, there is no greater guarantee to make Americans dependent on government than to destroy their investments; and we know Obama’s ideology is posited on the notion that the state’s role should be expanded and will take care of people (therefore, making more people dependent on it).
So, whether intentional of not, the outcome of Obama and his policies has been to decimate Americans’ life savings. With the market down around 30% since Obama’s election, never in our history has there been an incoming president who has destroyed so much of our wealth so quickly.
Where were all the brilliant statesmen when Gramm-Leach-Bliley was passed and signed by President Clinton? Where were they when futures modernization act was passed, when Bush fed the credit markets steroids and let loose banking regulations..?
These are the reasons we have a deepening recession / mild depression. And it will get worse, because we refuse the truth of our banking system; it is broken.
Its not under pressure, its broken. Its not in a credit crisis, its broken. We need to stop trying to fool ourselves and take half measures of taking over Citibank, citibank is broken. It must be taken over, clean out the balance sheet and determine which assets have value and which are based on European Derivatives, all US banks must undergo this. This must be done to create firewall between US assets and the massive debt held in Europe we are servicing. After we clean out worthless derivatives, the banks can go back to business as before.
The sub prime mortgage is a symptom, not a cause. The cause is 600 Trillion dollars in European Derivatives sucking dry the American Banking system. These derivatives are backed by Federal Reserve without US supervision or legislative agreement. Until US Legislators come to term with this, the markets will continue to deepen into Depression, one that has no bottom if we dont act.
TomF: Another irony ia another Russian riding in on a white horse. One Orly Taitz – Russian immigrant, Dentist, Attorney, American Patriot.
She is leading the legal charge to Mandate BHO to make full disclosure about himself regarding his place of birth, college records, passport history etc. Her original plaintiff, Alan Keyes, has now been joined by several “tin foil hat wearing” elected officials and even several members of the military. Like myself, many citizens, who were once sceptical of the possibility of this usurpation, have had more time and more interesting developments to cogitate. I’m thinking now that BHO knows that he is running out of time. This could explain the big rush (pun intended) in everything he’s doing.
When is Jennifer Rubin going to start using the correct labels? Obama and his cronies are radical socialists, not liberals and not ultra-liberals. When the American brainwashed public wakes up and learns what a socialist really is, how they operate, and what the impact will be if they succeed, there might be a chance for changing the mindset before we all become slaves of the state. How can she call them liberals when a true liberal believes in freedom of the individual, free trade, free markets, private properties, etc., the very things that her “liberals” are totally against. A socialist is a totalitarian, a fascist. Nazu stands for National Socialist, the USSR wad the union of Soviet Socialist Republics – they failed because full government control totally incompatible with freedom. The Glittering Generality in the White House is a trained radical socialist. The ubin-liberals love being called just that. They have conned over half of the voters and have far too many more thinking that Obama is a leftist-centrist whatever the hell that is. So far they are succeeding in tearing down the economy, which is a part of a strategy leading to full control. In the Soviet Union, Stalin was ofgten referred to as Uncle Joe. What’s next? Uncle Oe?
What is at work here is the most massive income redistribution scheme in the history of mankind. Obama is taking money away from productive hands, that is companies and individuals that pay taxes and are giving it to failed or failing entities and individuals. So for example Ford who ran their business well enough not to need external bail out will be penalized by having to compete with a failed model, GM, who has received 10s of billions of dollars. If GM were allowed to fail Ford would become healthy.
Pouring good money after bad cannot renew the economy. GM (as an example and there are many others) should be allowed to fail as a consequence of bad management. What people fail to see is that when a real business fails it is usually reorganized and run by new management with a new set of investors. Good employees are called back and efficiency is restored to the marketplace.
Government dislocation of these natural events only postpones the inevitable.
Barack Obama and his supporters really do believe that the ultra wealthy in America do control a hugely disproportionate share of the nation’s money and are also responsible, by their clearly corrupt and immoral financial activities, for the present downturn in America’s economy. President Obama publicly and clearly campaigned on the premise that he would force these wealthy and irresponsible criminals to pay the price by imposing his
wealth redistribution programs on them. This includes destroying the American stock market, which Obama and his supporters sees as a rich White man’s wealth vehicle, and the quickest way of separating the wealthy from their money is to put this vehicle out of business by taking stock funds and using them to promote universal health care, alternative fuels, etc.
Barack Hussein Obama promised in his inaugural address to “remake” America and this is how he intends to do it.
Gad, howiem. You’ve got it perfectly correct.
Thanks. Didn’t know others knew too.
http://www.politico.com/news/stories/0309/19534.html
It was the democrats wanting every family in America to own a home. Ala slick Willy and crew. Good ole Barney and others pushed the programs and got us into this mess. Now Obama the Pelosi puppet is pushing his Ayers dream of socialism down everyones throat since won and feels it was a mandate to do as he wishes. What a crock of ^&().
The Dow has tanked since it was apparent that McCain dropped the ball (Did he every have it?). Obama is bad for America as we new it, Wall Street knows it and even the libs will see it also. Just so sad that the economic barometer continues to drop and out President doesn’t even say anything positive at all to encourage it’s rise. If Obama were to get impeached for being born in Kenya then the market would sore!
One has to love the theme of “financial swindler of Obama’s economic program”. Americans have a short attention span and they also have a very low pain thresh hold. Since Obama never really “grew up” in America, it’s a glaring weakness he has along with his 57 state majority.
The GOP should add the following to their attack in 2010:
Energy is life. Cheap energy is properity. Obama is against both. fully supports Obama.
Nothing in politics happens by accident. As long as the press stays with them, and it will, Obama can tank the economy, wipe out the middle class, and put even larger segments of the economy under gov’t control. Hope you have a skill you can sell for cash or barter.
Mathematically, the answer to the question, “How low can we go?” is zero. It’s mathematically possible for all of the stock markets to completely tank although – fortunately – that’s also unlikely. Obama seems hell-bent on making it happen, though. As was pointed out a few years ago, over half of all Americans own stocks and/or mutual funds by way of pension plans, 401Ks, and private investments. Destroying that source of private wealth will indeed make people more dependent on government. Unfortunately, if you wipe out the economy, government won’t be able to help, either. They can’t seem to grasp that concept inside the Beltway.
Obama is a little slow on rationality.
If he drives the market down 60% how does he squeeze wealth out of the sector that lost wealth
If he pounds salaries below 500.000, how will he milk millions in taxes from them as promised
If he raises benefits and payout with unemployment, how will he induce people to work?
If he surrendors, how does he explain 400,000 military joining unemployment lines plus a million in defense contractor workers.
If he regulates and punishes the automotive sector, how does he expect them to pay back their bailout loans?
Almost every big deal he offers, has hidden contradiction in it. Socialism is easy to expose
His policies are deepening the recession. The market is a daily election, and the votes are overwhelmingly negative. All the cheering media in the world can’t hide the destruction this mob has done. Do you see any prospect for improvement?
I miss Jimmy Carter already. At least we knew there was a bottom. Unless this is bizzaro world, nothing Obama has done yet will fix a thing.
Obama’s core objective is and has been the destruction of the middle class in America! His stimulus and spending programs will be disasterous but it will be the hyper-inflation that follows that will do the main damage. The US economy will resemble that of Zimbabwe. Obama’s government will issue a one million dollar bill and go up from there.
Excellent piece. Unfortunately, the clueless Obama does not grasp the situtation and really believes he is the Messiah! Thanks, MSM!!!! Now foreign governments begin to laugh at his proposterous programs, fear mongering and saber rattling, they realize “The Emperor has no clothes” – there is NO SUBTANCE to Obama. He is the “Paris Hilton” of Washington, DC.
Sadly, like Nero, he fiddles while an out-of-control Congress spends tax dollars like there is no tomorrow – including their personal perks (private jets, new cars, added staff and of course, the PORK to their favorite lobbyiest). This is a country in dire need of a rightous, strong leader, with incredible management skills, wisdom, credibility and a genuine concern for this country and our economic systems. Sadly, Obama just can’t measure up.
This is what we get when we elect a man based on hype and skin color rather than ethics, experience and credibility.
His plan is working perfectly and on schedule. This is what he intended. This is what he’s been working toward his whole life. Dreams of his father? More like Dreams of a Socialist America.
The Wall Street Journal has ended their love affair with President Hopenchange.
HE IS RUNNING OUT OF PEOPLE TO BLAME!
http://online.wsj.com/article/SB123604419092515347.html
But, But…
Wasn’t it all Bush’s fault?
in the spirit of the world-class economists on this board, allow me to clear this whole mess up:
Some fat blithe spirit makes love to a mitochondrial deficit. A prime minister living with a paycheck, the mating ritual, and the roller coaster are what made America great! Sometimes the power drill related to a polygon starts reminiscing about lost glory, but a nuclear pine cone always accurately bestows great honor upon the carpet tack about a tabloid! A traffic light beyond the maelstrom dances with a girl scout, because a grand piano around a pit viper seldom makes love to the avocado pit. Most people believe that the pickup truck beyond a cloud formation seeks another salad dressing defined by the buzzard, but they need to remember how somewhat a freight train earns frequent flier miles.
How hard was that?
Let’s see, we can dust of some of the successful campaign slogans of the past.
Such as:
It’s the economy, stupid!
or
Are you better of than you were 60 days ago?
Some new ones:
Back in the ’90s, the HMOs decided which treatments were cost effective, now it’s the guy from the DMV.
Taxes: What Democrats pay when they receive a Presidential appointment
Obama: “Sure your heating costs have gone up but at least it isn’t getting any warmer.”
“Now if you’ll excuse me, I have to spritz the orchids in the Oval office”
Cloward Piven Strategy. If you’ve never heard of it, search “Cloward Piven” on Google.
Larry Kudlow calls this collectively a declaration of “war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.”
Larry has hit the nail on the head. Obama doesn’t care. He wants the economy to tank so that he can bring on government control of everything.
This is why people were saying before the election that Obama’s relationships with unsavory people like Bill Ayers were very important. All of the people Obama associated with hated America and were Socialists. Remember Rev. Wright and the horrible things he said to say about the country? Obama was comfortable in that church for years because he agreed with the principles. CNN and MSNBC want you to believe otherwise because they are part of the Obama lie. But the real Obama is part of the Rev. Wright, Louis Farakan and Bill Ayers community.
These relationships weren’t anomalies. When Obama says change, he means it. He intends to change the country entirely and we are seeing it happen right before our eyes.
As for getting re-elected, Obama is counting on the billions of dollars that he, Pelosi and Reid put into the stimulus bill for Acorn to help get themselves and other Democrats re-elected. Of course this is cheating, but who is to say that this hasn’t been going on already and especially during the last election?
What Obama is doing goes beyond money. He intends to change the whole foundation of the country and move us from a business-based country to a government controlled nation.
However, the last thing anyone, Democrat or Republican, wants is a bunch of politicians running everything in their life. Government is of the people, but on a daily basis it is run by politicians. This fact is and should be unsettling for every American, regardless of political affiliation.
Unless we all stand up and fight against this, the Socialists will win without even having to pick up a gun.
How low can the market go? Were this drop not associated with a collapse of the dollar, I’d say about 2,500 to 3,500. But as the debasement of the dollar continues, losing 60% to 80% of its purchasing power, people worldwide are going to begin abandoning it for more stable currencies. (I already am)
When they do, goods & services will stop being priced in dollars, triggering its final collapse. All dollar denominated assets (stocks/bonds) will simply disappear.
And the once mighty U.S. dollar, warm & cozy in your wallet shall rightly return to its intrinsic value, 0.
Bruce, that seems to make two of us
1) incompetence, 2) unwitting tool, or3) evil masterplan. I go back and forth between them all.
If Obama has planned to lower the market. He would be doing exactly as he is. The plan would be to dumping the market in the 1st 6 months or so of his term of office, and blaming bush. This would make any 2010 turnaround ( for mid term elections) look by comparison better than 2009.
Obama is a politician, he knows when the elections are.. He knows he needs an uptrend for 2010 and more importantly 2012 elections. the lower he can drive the market now while blaming bush.. the better.
2) unwitting tool. If Obama isn’t really in the driver seat. Is it possible that Soros, Buffet, or some other major investment block, is feeding Obama financial advice that is destructive ( while secretly shorting the market themselves). I don’t think it would be buffet, as he has taken a few lumps. It could be Soros or some other investment group.
3) Incompetent. After running such a great campaign, I have a hard time believeing he is incompetent. He might not know much about economics, but his advisors do. I think this is the least likely.
So, My assertion is that 1) is the most likely case. The market is going down as planned to give him a chance to get upticks for 2010 and 2012 election cycles. The major media covers him by asserting all is Bush’s fault. “Cmon Obama is only in the office for weeks.” willfully ignoring that markets move on future expectations, not past results.
Conclusion: Since washington will now control, banks, mortgages, heavy industry, etc. We need to use the election cycles as our investment guide. Hide out or short in 2009. Bet on a 3Q and 4Q 2010 peak.
Good luck all..
Rob @ 4 says: “However, there is no greater guarantee to make Americans dependent on government than to destroy their investments; and we know Obama’s ideology is posited on the notion that the state’s role should be expanded and will take care of people (therefore, making more people dependent on it).”
There is a significant difference between the typical American citizen in 1933 and the same in 2009:
In 1933 Americans tended to be: Rural or small town dwellers. Farmers or tradesman. Fiercly independent and proud. Willing and able to do most anything to survive. Understanding of the rule of law. Content with little during tough times. Possessive of multiple, life-sustaining skills. Defenders of personal liberties. Knowledgeable of history. Suspicious of government. Charitable. God-fearing.
In 2009 Americans tend to be: Urban or suburban dwellers. Office workers or indolent/government-dependent. Insecure and willing to grovel. Unwilling to get their hands dirty. Ignorant of the rule of law. Materialistic. Devoid of life-sustaining skills, i.e., trades work or farming. Willing to trade liberties for “security”. Virtually ignorant of history and civics. More trusting of big government than private enterprise. Self-absorbed. Secular.
As a result, America is ripe for conquest by nanny-state socialists.
Most of our citizens would willingly trade their birthright for a bowl of soup.
For the first time in my life I believe their are more of “them” than “us”.
I am ashamed of what this nation has become.
You are all missing the point. The only thing that is important is that Nancy Pelosi still can fly in her private jumbo airliner. C’mon, that’s what’s really important isn’t it? When she loses the jet, then we’ll REALLY know that the economy is in trouble.
Now ignore the markets, and let’s save the Marsh Mouse !!
“Obama, America’s Mugabe!”
Obama is doing exactly what he’s been planning to do. He has devoted his entire life to one thing…destroy America and the American people. Remake the society to his dream society and then manage to remain in power forever. This guy cannot be trusted with our country or our futures. Impeach him now or live under oppression and domination forever.
How low ?
The true answer is: as low as the subversives will be able to push it.
The strategy here is : “destroy the free market economy !”.
We should stop speaking about “Obama’s mistakes”. He doesn’t make mistakes, he follows the strategy of the subversives.
Their point is to weaken America,and that will result in stronger subversion abroad and at home.
Thank you for the opportunity to comment.
Wrote this last night on Roger Simon’s Blog. My tinfoil hat tells me we can look forward to this happening.
An executive order which will follow the collapse of the market:
I BHO, require all 401k and IRA investments to be forwarded to the US Department of Investment Savings. From this day forward all must be so forwarded and all businesses offering these plans will be required to do so. There is to be no exception to this rule.
The monies transfer will be held in trust and be available in the same manner as the previous investments were.
All retirement accounts will earn 3 pct per annum.
I unfortunately have to take this action in order to save the remaining savings of those about to retire.
Let’s see..if I need my Treasury auctions to be fully “subscribed” in order to keep the deficit beast fed, what would I do? Well, I could raise rates. That would drive the economy into depression even quicker than its current pace. 2010 reelection would get a bit harder for the party in power. Scratch that. I could keep rates low by eliminating the competition for investment dollars. What is the biggest competitor of the Public debt market? Yep, the Private debt and equity market. How would I keep that bad boy in net liquidation mode? Talk it down. Have no plan to help it. Become its enemy. Check. Check. Check.
If my philosophy was to rescue the “bad banks” , would it be better to capitalize at a lower or higher price? Lower. Again, talk it down, have a muddled plan, and become its enemy. Check,check,check.
Would a lower market or higher market make it easier to socialize healthcare? Would it be easier to nationalize helathcare with more or less people on “COBRA?”
If I were a Communist seeking the ultimate transformation of America, I would certainly need the market to cooperate for at least 12-18 months.
Obama’s band of merry men are doing exactly what they planned: bringing down the U.S. and make everyone a ward of the government, where they can be controlled and told what to do, when,where & how to do it. Rahm Emanuel’s comment that they shouldn’t let a crisis go to waste tells the story; they are looking to wrest full control of not only the U.S. economy, but of each and every U.S. citizen, and control it through a one-world organization like the UN. Jeremiah Wright’s dream is to destroy America for its past transgressions, and Obama is running the playbook to do so step by step. It’s not entirely dissimilar to the movie Die Hard: Obama is Hans Gruber, Pelosi, Reid & Emanuel his cohorts; Rush Limbaugh is John McLean; and citizens of the U.S. are the hostages. Like Gruber, Obama is not just a thief; he’s “an exceptional thief.”
26. Snoop. Careful with your dollar-dumping thesis. This could really burn you. The dollar is the proverbial “tallest midget in the room” and will most likely be so for the next several months. Look at the technicals of UUP, the Dollar-Bullish Index. Play the perma-dollar-bear game at your own risk.
I just saw on TV Obama says now is a good time to buy stocks if you have a long term perspective! Let’s go all in. Just wait 50 years or so and maybe we will see a recovery. He says if you worry about the day to day movement of the stock market you will get the “economy wrong.” Let’s see down 30% since his election. I think he has got the economy wrong along with everything else.
Freddie, sadly I agree with you on the three possibilities…with #1 the most likely. The next couple days should confirm that fact, although if he backs down then I’ll swing to number 3.
To #4 Alex:
Your argument fails due to the fallacy of over-simpilification.
Although you are right that some banking regulations were loosened, you omit the essential fact that the entire US banking system has been the most heavily regulated industry, by far, for decades.
Even the very roots of the system – money supply and interest rates – are monopolistically owned and controlled by the arbitrary dictates of the Federal Reserve.
It is central planning, comrade, not the free market – which is to blame for the wealth-destroying business cycle.
Here is the longest-tenured Chairman of a top 25 US bank – BB&T – explaining the entire crisis with no fallacies or omissions: http://www.aynrand.org/site/PageServer?pagename=reg_ls_financial_crisis
To those who see BO’s the left’s wealth-destruction programs as carefully calculated (Cloward Piven, et. al.):
Don’t forget that each individual has free will: the choice in every second of every minute whether to focus his reasoning or drift into stupor or emotion.
There are many at this site and 1000s of others who are increasingly gaining certainty that government (pubs and dems) is the cause of the business cycle. Many more are now openly advocating true (non-McBama) freedom as the only solution.
Yes, it’s as though we’re in a suspense thriller, but don’t discount free will. Keep advocating inalienable rights to everyone you know. It’s only too late when those who know the truth stop trying to persuade others.
To Pat, #40,
The banking regulations that were loosened, mainly repealing glass steagal (Gramm-Leach act in 1999) and the futures modernization act (2000) allowed banks to once again create credit bubbles as they did in the 1920′s.
The reason congress passed Glass steagal in 1934 was to eliminate the chance banks would ever again create unsustainable credit system. Please read history of banking regulations enacted during the great depression, and more importantly WHY they were enacted.
Once these restrictions were lifted in the late 90′s, It was only a matter of time that banks would create the same environment that existed in 1920′s, with the same predictable results. President Clinton set the stage, President Bush filled the stage with debt. It was a perfect storm of credit run amok.
Using labels as central planning, or free market cannot be applied, free market does not exist in banking system, or does central planning. It is as you pointed out a monopolistic system operating at whim of Federal Reserve. The European banks that make up 5 main member banks of Federal Reserve have issued Trillions of debt secured by worthless Derivatives, the rot that inhabits our markets today. Until this rot is cut away, the banking system will not recover.
I would argue that the banking system is not owned by the Federal Reserve, it is on loan to them by the legislative branch which seems to have misplaced the US Constitution. Since it is on Loan, we are paying Interest.
Until we firewall US banking system from European derivative markets, any money sent to American Banks will only go to service European Derivative Debt. We have sent more money to banks than banks are worth, but nobody stops and asks where it went..?
I could care less if congress is demo or gop, they should be doing their damn job.
Maybe the Republicans should take it easy in 2010 and let Obama keep wrecking the economy. If the Republicans take control of Congress in 2010, Obama and the media will continue blaming them for all our economic problems, and Obama will coast to an easy re-election in 2012.
Carter was unlucky because the severe economic pain (and the Iran hostage crisis) struck after the ’78 midterms, exposing him directly to the voter’s wrath.
PAR, I heard that at the noonhour, too. He poo-poo’d the crash, referring to it at “gyrations” and “bobbing up and down.” What graph is that moron looking at? Why can’t he get that Wall Street IS Main Street?
Here’s something to think about. If the administration can’t find candidates for executive positions who haven’t cheated on their taxes, never mind what that says about their ethics and never mind what that says about the complexity of the tax code, it indicates something else, which is that Atlas is already shrugging. If this is the reality now, just imagine how much of the economy will end up underground when punitive taxes are added.
Free health care is coming. But just like elsewhere where it’s free, you’d better be prepared to grease a few palms if you want an appointment this year. Cash only, of course.
Atlas won’t only shrug, he’ll tell the system to go to hell. The government can’t redistribute income if there isn’t any.
Karin, I also those words and quite frankly I almost choked on my breakfast burrito and thought the guacamole was going to come out my nasal passage.
I pray at some point in time, and now, that this inexperienced President realizes that his so called change is destructive to the ecomony and enlist indviduals who have real answers to helping out small businesses and the working class. His Treasury Director is a joke. bailout and entitlements insane. We are being robbed in broad daylight.
It seems really sad to me that the only way that Republicans believe they can win is if the recovery efforts fail. It looks like the GOP civil war/implosion came at just the right time.
Saltherring precisely characterizes the crucial differences between today and 1933. As much as I’m bothered by the thought of what’s happening (and I think howiem calls it like it is), I’m one of those suburban-dweller types who doesn’t feel like I have the resourcefulness that I might have had in a different era–and I’m not sure where to get that at this stage in the game.
WELCOME TO THE MAGIC CHRISTIAN! We Americans are being taken for the ride of our life by The Clueless Obamanation and his merry crew in Congress — headed up by Pelosi, Reid, Schumer, Dodd and Frank.
Wake up, America….before it is too late. These idiots are hell bent on destroying our economic system, our Constitution and are freedoms.
I’ll take a divided Congress any day. Less stuff accomplished=less money wasted
Alex:
Actually, Glass-Stegal seperated Investment and Commercial banking operations because Banks would underwrite thinly capitalized companies and then pawn them off on unsuspecting bank customers. It was like the dot com boom. Oh yeah most dot coms were capitalized under Glass-Stegal.
Had Glass-Stegal not been repealed it would have ended investment banking in the United States because our investment banks could compete with the London and European banks. Re: See what happened after Sarbanes-Oxley was passed.
Tammy and Tab tell me true.
Are you better off after 7 months under B. Hussein’s Idiocracy than you were under eight years of George Bush’s low unemployment, low interest rates, strong belief in capitalism, strong stock market and 401K figures, strong belief in the first ten amendments, strong reaction to terrorism (seven years without a terrorist attack on U.S. soil), tactical missteps (no found weapons of mass destruction, topped off with a tactical stroke of brilliance (putting General Petraeus in command of the war (who spearheaded the surge, which was the springboard to a mainstream media unreported victory in Iraq).
If you’re like most taxpaying people, the honest answer is George W. Bush.
Forget the fact that B. Hussein welcomes mortgage rate cheats (Dodd from Countrywide, then gives countrywide huge tax breaks) with open arms.
Forget the fact Obama welcomes tax cheats like Tim Geitner, Nancy Kellefer (Chief Performance Officer and Tom the tax dodge Daschle who always shake hands with the intent of greasing his own palms.
Forget the fact that the Democratic Party insisted on making a country-full of high credit risk loans knowing when the non payment chickens would come home to roost, the economy and bank system would be severely damaged, setting the table for a stimulus pork bill that would include all the oink these money grubbers have been waiting to stuff through a complicit congress for years, grabbing tax dollars with the fury of PacMan by the tonfull.
But do remember this.
It’s Barack’s overall strategy to use our largely Democratic caused bank crisis to push through the most capitalistic damaging, socialist changes in the history of this country.
In two days, Obama arranged the spending of more tax money than was authorized by Congress since the beginning of this country. The new money for socialist pork and socialist causes would wrap around the world three times, and that’s just using thousand dollar bills.
Putting us and our kids in such a financial hole, we could be digging for 1,00 years and never see light at the end of the tunnel.
To put it as succinctly as accurately as possible, B. Hussein’ collectivist Obama is going us dirt.
53% of Americans gave him what he asked for. Their vote.
The mainstream media treats him like he’s the second coming. They did his bidding to the extent that, when Maureen Dowd make a crack about Obama’s large cupped sound system(his big ears), the Obama people told Maureen he was sensitive about them so no one ever spoke of them again.
There are things, though, Obama can’t avoid hearing.
One example, the fact that the American people don’t like earmarks attached to legislation because earmarks are like money sucking leeches. So Obama made a big thing in all his speeches how line for line he’d go through legislation looking for and weeding out earmark.
It proved to be a lie the brashness of which was up to Bill Clinton standards.
When Obama’s Stimulus Bill was found to have 9000 earmarks, Barack, like a true, pathological liar insisted there were none.
The pathological liar denied any earmarks without evening reading it. Remember when George senior said,”No new taxes,” then raised them. That’s what this earmark thing reminds me of.
Maybe the reason B. Hussein is an unrepentent liar is because he believes (in the tradition of Stalin and Lenin) that the extremes equals the means. Visiting the kind of liberalism/socialism on this country that believes in redistribution of wealth, and the evil in the people who make the most money (have workded the hardest).
It would seem that the trillion dollar Atimulus Bill is simply the start of this grand socialist redis. of wealth scheme, which uses Class warfare as its calling card for justification. Every chance he gets, the B man demonstrates his contempt for the rich, for those who control and own the means of production. Which is right out of the Marx (not Grocho), but Karl playbook.
Soon or later, though, Americans who instinctively value winning, achieving, owning, persuing happiness are going to catch on to B. Hussein’s dark plans for the dreary life of communism/socialism/progressivism whatever you want to call it, maybe loserism.
Kids keep score even if parents don’t. Americans believe in rewarding achievement. Performance driving promotions. It’s the the American dream. To sleep with the communist manafesto is to wake up drained of the will to succeed.
B. Hussein’s and George W.’s only similarity, as I see it, is that they were both elected President. One believes in the great opportunity for the individual that America offers. The other believes in a collective doldrum, debt morass that socialism carries around like a forlorn shadow.
Barack and his class warfare harangue won the stimulus battle. But when enough Americans catch on to the brown eyed handsome mans’s (big ears and all) modus operandi (class warfare, socialist soul, the wonder boy’s gonna be ridden out of town on a splintery rail.
Barack, the more people catch on the fact that your trying to change this country into some socialist subset that drains it of its freedom loving, achievement hungry nature, the more people are going to tell you to get lost.
Barack, you may be a fighter, but you’re not a winner. Just another bum from da neighborhood.
Evertime the Big Governments still our money nd trash our constitution to create another “stimulus”, the markets keep going down. When is the Press going to wake up and slam them for the repeated failures?
Of course we know the answer. The market can go to zero. That’s as low as it can go.
This country has already gone about as low as it can go.
We elected B.Hussein President.
54. marsouin….what makes you think he’s sleeping?
marsouin…stupid misread on my part…sun on the computer screen caused me to read “pres” instead of “press…..so—yeah. Good question.
53. Rachel Peepers:
Another hate piece from the deranged cavegirl.
Watch the little birds and feed the pigeons, it’s soothing.
WELL Jennifer-having a case of buyers remorse-2 months ago you thought the Obamascum would be a “moderate”. Sorry Jenny, but Obamaskank is a Soros commie, whose whole agenda was written by Soros ad his pro-un, hate America clones months ago. They want to destrot America, they want everyday Americans to be depedent on government. He wants America to be the Soviet Union of the 30s, the North Korea of the west. Soros wants the whole world to be North Korea. Jennifer, Id suggest start writing articles on Soros and his Commie pals like Maurice Strong, former deputy at the UN to Kofi the Anus. Funnny how the “environmetalist” Strong, a canadian, now lives in Red China, the biggest environmental nightmare on the planet. Also funny on how the govts of France and Britian both refuse to prosecute Soros for securities fraud, even though his fortune is largely built thru currency manipulation. Obamaskank is only the public face of the problem. Soros and his minions are the real problem.
VIVO: Are you out of your mind? People are losing their retirement, their college savings for their kids. They are being impoverished in a matter of weeks.
Do you have any notion of what you are talking about at all even once a month?
This is a response to all of this?
Another hate piece from the deranged cavegirl.
Watch the little birds and feed the pigeons, it’s soothing.
Calling people names? Mocking them?
I tell you, one more month of this and the electorate will be in revolt. Try ebing a smart a$$ then. You are liable to get shot.
What are you, 13 years old?
Want to end the credit crunch- Ill suggest we start right at the top. ELIMINATE THE FEDERAL RESERVE. WE should NOT be borrowing money from the bankers. Nor should the Government be printing money. Was it a coincidece the 16th(income tax) 17th(direct election of us senators) and 18th(prohibition) were all passed under the Woodrow Wilson admin, The same one that tried to force the US into the League of Nations after WW1? Wilson was a neo-marxist in many respects. What a coincidence he was also a uninversity president before he was a politician. No wonder the pinko media covered up for this guy. Sounds a lot like today. Just undo what Wilson and FDR did, and watch not only America regain its greatness but the whole world will propsper.
This is just a repeat of FDR’s strategy. Fdr is on record for worrying that the economy would recover before all his agenda was enacted. His fireside chats kept the public stupidly on his side, while he wrecked the economy further. We were only saved by WWII and FDR’s passing during same.
Obama’s trying the same strategy, but we have the power of the Internet to save us. The truth simply cannot be so well-concealed anymore. Eventually, even the dimmest can figure it out. Obama is actually sealing the fate of the Lib/Soc agenda. In four years, someone will come along with a real mad on, and kick them all out. I hope. It may be too late by then. A revolution may come first.
I think the simple explanation makes the most sense to me. Obama has an agenda, to redistribute wealth. That’s not an entirely stupid notion, in my opinion. The gap has become unbearable. So this notion isn’t “beyond the pale.”
Middle-class people devoted their lives to building up pension plans, often working in jobs they hated. Now, those plans are about to crash because of the debacle perpetuated by idiots, earning millions of dollars in phony bonus plans that rewarded their inability to understand basic math role-models and the risk they were taking?
I understand the anger. I understand the current administration’s tight-rope walk, too.
If you don’t? I don’t think I get You, to be honest.
This is too easy to decipher.
And those who feed off the trough of “Agin or For,” I’m not quite sure how you sleep at night.
We’re talking about real people’s lives here. Not just downsizing a hummer or two.
We’re talking about people who have worked their entire lives and invested in their 401Ks, etc., and they are going to be devastated for a long time.
Nothing…..nothing…..will work out. Not their health care plan. Not their pension fund. Not their extra 401K.
This is not OK.
There may be a free market that says, “It’s got to be OK.”
But to tell a generation that everything they did was stupid and risky and they deserve to be devastated?
That’s not OK.
If that’s the conservative viewpoint, I think most people will tell you to shove it where the sun don’t shine.
Steve p-the one thig im sad about is how the doctor slapped your parents at birth for PRODUCING A DEFECTIVE PRODUCT. Your “brain” is more frozen than an icicle in Siberia in January. Tell me STUPID STEVE, werent you the guy who set Lucifer Ice skates and a wool sweater for Christmas?
If Obama and the Democrats continue their socialist policies and hand wringing about the economy and the stock market, they’ll have nothing left to redistribute when they get to OBAMATOPIA.
The only investment people should be making right now is in aluminum foil.
If I were to write a political thriller, making the plot the rise and eventual election of a guy who spent 20 years in a bigoted, hate mongering church, who commiserated with anti-American terrorists, who followed the doctrine of a twisted radical, appointed one tax-cheat after another, endorsed a bill of astronimcal debt, signed off on that bill thereby enlarging government’s role in the private sector and killing free enterprise, had the hand of one of the world’s most notorious America-haters in his pocket… and had the adoring mass media and starry-eyed populace holding their breath for his next utterance…….
… it wouldn’t sell. Publishers would say it’s too unrealistic, too fantastical, impossible.
Despite the heavy ring of conspiracy theory, this is a win-win situation for The One. The economy recovers, wonderful, and he takes all the credit. The slump continues and it’s the excuse to enact more redistributive legislation.
Timothy Geithner is an alchemist:
http://trackacrat.com/
Moogie #67. You nailed it! The sad part is, this is how I thought this was all going to turn out, but I doubted myself, thinking it couldn’t possibly be the case, thinking I was being paranoid. I wish I had been wrong.
Mongoose, Vivo has never posted anything with redeeming value, even from his own perspective. Ignore him. He’s inconsequential.
AnninCA. I don’t have a problem with taxing the perverse wealth of some of the idiots that got us into this, but don’t be so naive to think that our representatives haven’t been complicit in this. Why is it that after a political career nearly every pol ends up a multimillionaire? They are riding above the membrane, unlike us common folk.
The President is showing his true colors. He is a Marxist and so are the people close to him. The state is supreme. It is the institution which will provide for the people according to Marxist doctrine. There are no God- given “unalienable rights” as the preamble to the Declaration of Independence states. Without God-given rights be prepared to live in poverty, unless you are part of the ruling clique.
Wait until next fall. Anyone who made any money outside of the markets will dump those last stocks for tax deduction write-offs. Hell they were worthless anyway. The market will crash next fall BIGTIME! wait, watch, and see
after reading this article and the comments following, i’m just wondering how anyone finds any hope. it seems like the only solution i’ve heard is to pray that 2010 elections result in republicans back in congress… but i’m wondering, how much damage will be done before then? and what if it doesn’t happen? could BHO really wind up in office for another term?
rachel peepers made a great point when she asked, are you better off after 7 months of BHO or 7 years under bush? the problem is, every time i ask a democrat that, they immediately blame bush for everything. i’m tired of arguing with them, and when i think about how dramatically different our future could be, it makes me sick to my stomach.
I wasn’t fooled. I followed my instincts and trusted my judgment about Obama’s past. He’s a Red Diaper Baby. Only someone who was self-consciously a Marxist at one time and broke with it can appreciate how these people operate. Because I saw in person how these people deceive others. Obama didn’t deceive me. I said he would govern from the Far Left and I’m right. I was mocked by some people for telling it as I saw it. But now I’m having the last laugh.
Nothing of what is happening is a surprise to me. The only surprise is how quickly he is doing this. I thought he would be a tad more stealthy and measured about it. But he and the other socialist, Pelosi, are going for it all right now. It’s as if they know that they only have two to four years to pull this off and then they’re gone. And that will be the case. I think we can reverse a lot of what they put in place, but not all of it. Dick Morris’ assessment is exactly right. This guy knows he’s a one-term president and so he is going to go for it all. The recovery will be sub-par and inflation will build in afterwards. Then the Fed will have to raise rates and induce another recession in order to wring the inflation out – before we can really grow again in earnest.
#52 Jerryofva; thank you for your response.
The main issues concerning repeal of Glass Steagal follows;
It is a conflict of interest to let the same instutution granting credit also use the same credit for investing. This is exactly what led to the credit bubble of the 1920′s, and the main reason it was enacted in 1934.
In other words derivatives were created as an illusion of credit, by the same institutions that then invested using those worthless derivatives as credit ( actually debt) which the American Taxpayer was guaranteeing.
We allowed instututions to possess this incredible amount of influence, banks expanded and become so large and entrenched ” they cannot fail”
Banking deregulation allowed banks to issue and then invest the same credit (the create the derivative and then invest it) leading to huge risk for deposit insurance system, which is why we see AIG and the FDIC scrambling ( begging for Taxpayer funds) to cover massive losses.
The banking system in place from 1940-1980 limited risk and allowed for gradual managed growth. Then we let loose the regulators and we began to see the collapse in real esate trusts in the 80′s. This was the wake up call that all was not well, but Congress didnt listen.
They continued to loosen regulations and allow your ” investment banking” to compete with European investment banks. These European Investment banks issued debt instruments guaranteed by Federal Reserve, which uses American Taxpayers as the Insurance Pool.
It was a no win situation for the American Taxpayer, who was put on the line to cover the issuing credit
( derivatives) and the insurance to cover them if anything went wrong( AIG and FDIC).
“Investment Banking” deregulation is what led to this mess, as the Federal Reserve is not beholden to the US or its citizens, Its only interest is to protect original member banks which are European.
JohnGaltlives is correct, the Federal Reserve is source of banking instability, but it is US Congress and Senate that has handed over keys to the safe. We allow a foreign entity to decide interest rates, money supply and risk while forcing the American Taxpayer to underwrite their global foolishness.
#64 AnninCA – Thanks for posting what you did, because I think you verbalized a common viewpoint. I’ve been wondering how any non-radical could rationalize redistribution, and you showed me.
HOW is the disparity of wealth unbearable? Who says it must be within certain tolerances? How much money is too much money? When does it become immoral? Who gets to determine the amount? Merely asking these questions highlights the childish notion about the “unfairness” of it all.
Focussing on “unfairness” is the very basis of Marxism. It’s facile and childish, but it resonates, because it appeals to our baser nature of covetousness. A philosophy that appeals to our baser nature, rather than our higher reasoning, is an evil one.
The reason there is a greater disparity, is because more wealth has been created, because we’ve been really prosperous for a long time. However, more people with the knowledge of acquiring wealth has not increased as rapidly.
People have been dumbed down. They are no longer taught our system of economics. They’re taught to be drones. They’re taught what to think, not how to think. They also haven’t been hungry enough to take a chance. They have been told for too long that they shouldn’t have to take a chance. There’s a better way. Let government take care of you. Sleep. Nirvana is on its way, courtesy of the government.
As for their wealth evaporating? Well, what caused that? Governmental interference, specifically by the Socialists. This is how radicals work. They undermine the system, then point to the now failing system and say how intrinsically broken it is. It’s not INTRINSICALLY broken. It has been SABOTAGED. By the radicals. For their benefit. Not for yours.
The market has been going down dramatically since O’s election. Every time he announces something, the market tanks dramatically, as it responds appropriately to his new message. The more he makes clear his Marxist agenda, the more the market tanks, and the more the 401k’s shrink. This is not a coincidence. Those in the marketplace readily declare it.
Obama’s agenda is wrecking the 401k’s, so that he can make you dependent on the government. “See, the free-market doesn’t work. It’s intrinsically flawed. (They sabotaged it.) The government is forced to take action to preserve our futures. We will now nationalize everything, including those 401k’s. Now, it’ll be all invested in the (broke) government. You’re safe now.”
Oh, joy!
Those who have received the benefits of our sabotaged education system cannot see this very readily, even when explained, because they’ve been indoctrinated to think that “some Socialism” is okay. Ain’t no sech thang. It’s like being a little bit pregnant. Eventually, you become more pregnant. Then you start birthing Communism. Then, you have no wealth at all, as it all resides in the government under the control of Party leaders and bureaucrats.
If he’s a socialist with no loyalty or allegiance to the United States, then driving down the market, destroying the middle class and foreign policy gains don’t matter. His allegiance and loyalties are elsewhere. It so strange watching those that voted for him or shilled for him (the press) silently accepting the rapid slide of our collective fortunes.
bill:
“If he’s a socialist with no loyalty or allegiance to the United States, then driving down the market, destroying the middle class and foreign policy gains don’t matter. His allegiance and loyalties are elsewhere”……..
BINGO…we have a winner!
61. Mongoose:
“Another hate piece from the deranged cavegirl.
Calling people names? Mocking them? ”
Was this sooo bad?
Mocking is better than insulting, dear mangosta.
* * *
70. bear:
“Mongoose, Vivo has never posted anything with redeeming value,”
Redeeming value = conservative? fringe right?
* * *
74. TXGirl:
” the problem is, every time i ask a democrat that, they immediately blame bush for everything.”
No, it’s not Bush’s fault, or Obama’s, it’s YOUR fault. You make the decisions in your life.
* * *
77. Marc Malone:
“People have been dumbed down. They are no longer taught our system of economics. They’re taught to be drones. They’re taught what to think, not how to think. They also haven’t been hungry enough to take a chance.”
You are absolutely RIGHT!
***
“The market has been going down dramatically since O’s election. Every time he announces something, the market tanks dramatically, as it responds appropriately to his new message.”
And WHO are those market manipulators?? Take a guess.
Rubin you are clueless on economics.
Write about something else and leave the writing of articles on economics to know what they are talking about in that area.
The stock market is apolitical. The current downward drift of the market should come as no surprise to anyone. The IBD in an editorial before the end of November predict this. There reasons were threefold and quite simple to understand. First was the election of the most anti-capitalist and anti-business POTUS EVER. Second was a filibuster proof Congress dominated by the left. Finally a complicit media who will not give the American people the truth.
Everything this administration has done to this point has as its goal to destroy capitalism and the middle class in America. They seem to have no understanding that capitalism is what is going to create a recovery.
As to how low can the market go, it can go a lot lower. There is support at 6600 on the DOW. If that gets cracked, the next level is 6000. There is nothing that will stop this slid.
I believe we will see 6000 before our taxes are due.
#12
Dad “If Obama were to get impeached for being born in Kenya then the market would sore!”
Ya…we would have Biden and Peeeelosi. That would really help our 401Ks….not!
I pray that Obama please step down so our economy can recover…. I knew he wouldn’t be good for our economy but didn’t think he would be this bad. Even I’ve noticed, as many others have, that every time he speaks and plans something the stocks crash.. He needs to stop leading and go on vacation……
Or just not do anything for a while….. Let the market recover and then start with his plans, but just like every other arrogant new boss decides he knows more than everyone else with experience and starts making changes. When will he learn he’s a hypocrite, he’s already doing so many things that he criticized so many candidates for. Can you imagine working for a boss that is earning more money than you and knows less than you? We have all experienced it but not as our president….