Joe Klein has a great piece at Swampland:

"I've gotten the clear sense that the bankers still haven't quite realized (a) how much and why the country is so infuriated with them and (b) how much of a haircut they're going to have take on their toxic assets. ...

On late Friday afternoon, a senior Obama Administration official met with a group of Time-Warner journalists in New York and shocked the group of us by saying, "I don't understand bankers," even though he'd spent his adult life working with them. And then added that "they don't understand the scale of damage that they've done."

I suspect the next stage of this is going to be either a tug-of-war, or a flame war, between the Administration and the bankers, who don't seem to realize yet that the
economy they thrived and robbed in--the economy built on making paper profits at the rest of the country's expense--is over. That was the house built on sand Obama was speaking about in his excellent Georgetown University speech last week.

A new economy, built on rock--that is, real products not paper profits--is where the Administration is trying to point us. This will be the historic work of the Obama Administration. The bankers, and their snake-oil selling allies at CNBC and elsewhere, will claim unwarranted government intrusion, the onset of socialiam, the end of the world and prosperity and private jets."

.

Media smackdown courtesy of a comedian

Wednesday night's Daily Show was one of the all-time best. You have to check out the total destruction of the a**holes at CNBC:

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

.

We're gonna need a bigger boat ...

An old friend wrote on Facebook last night that he thought the economy had hit bottom and things were going to start heading back up, up, up. I just can't be that optimistic. Primarily, because of all the Zombie Banks out there, looking alive, but very much dead (and insolvent) inside.

Here's Thomas Friedman at the NY Times:

I’m worried. We’ve just elected a talented young president with many good instincts about how to propel our country forward, extend health care to more people, make our tax code fairer and launch a green industrial revolution. But do you know what I fear? I fear that his whole first term could be eaten by Citigroup, A.I.G., Bank of America, Merrill Lynch, and the whole housing/subprime credit bubble we inflated these past 20 years.

I hope my fears are exaggerated. But ask yourself this: Why couldn’t former Treasury Secretary Hank Paulson solve this problem? And why does it seem as though his successor, Tim Geithner, won’t even look us in the eye and spell out his strategy? Is it because they don’t get it? No. It is because they know — like Roy Scheider in the movie “Jaws,” when he first saw the great white shark — that “we’re gonna need a bigger boat,” and they’re too afraid to tell us just how big.

But, while I'm down on the short term economic future of the country, I am still glad to have the right man and administration in charge of this crisis and everything else.
.

Hmmm, why don't we talk to an economist?

You would hope, when we are facing such a dramatic worldwide economic crisis, that our Big Money Media would rise to the challenge. Don't hold your breath.
Why? Why do the news networks continue to book politicians and pundit to talk about the economy and turn their back on the experts, economists?

From Media Matters for America:

A Media Matters review of the Sunday talk shows and 12 cable news programs from January 25 through February 15 found that during 203 hours of programming on Sunday mornings and weekday afternoons and evenings, only 41 of 722 total guest appearances in discussions about the economic recovery legislation and debate in Congress, were made by economists -- a mere 6 percent.

Six percent? As John Stewart said, you guys are hurting America.
.

Massive dose of dumb

The Jesus Party, formerly known as the Party of NO, which was formerly known as the GOP, came out with a set of talking-points a couple of weeks ago that used the life of Jesus as a comparative measure for how massive the Stimulus Package was. Their implication was that $700+ billion is a lot of money. Wow, who knew? But when you look at their comparison, and then the cold,hard, numbers of the American economy, you see how absolutely stupid their reasoning (I use that term loosely) is. Via Pandagon.net:

BIGGER THAN JESUS

Apparently, the new Republican line on the stimulus is this:

To give the proposed economic stimulus plan some perspective, “if you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn’t have spent $1 trillion.”

Now, there’s a bit about this that renders it disingenuous...which is the whole thing. The American economy is massive - $14.28 trillion, in fact. If you started the day Jesus Christ was born and spent $1 million every day since then, you wouldn’t reach the size of the American economy by the year 10,000. Or 20,000. This is why we don’t measure the size of our economy in Jesus Money, despite the declaration of such in the RNC platform.

To put this in further context - over the course of Jesus’ life, at $1 million a day, and presuming his death at the age of 33 (including leap years), the value of Jesus’ life would have been $12.053 billion.

Microsoft’s yearly revenue last year was $60 billion, meaning they earned five Jesuses in a year.

Circuit City’s yearly revenue in 2006 was $10.4 billion, meaning even a failed company was, less than three years ago, earning nearly a full Jesus.

Wal-Mart, the world’s largest everything, earned $404 billion last year, meaning that they earned a whopping thirty-three and a third Jesuses in a single year.

The American economy, incidentally, is nearly 1200 Jesuses strong, which is nearly the size of Chatom, AL...all full of Jesuses.

This teaches us two things: the first is that the American economy is massive, and any effort to stimulate it will require a suitably large amount of money. The second part is that it’s really stupid to measure things by the yardstick of Jesus earning a million dollars a day.

Also, nobody has any idea how many days of Jesus it would take to keep Pajamas Media afloat, but it’s probably more than you’d think.

They have no ideas! And they don't seem to get the concept of "economic stimulus" ... or put it another way, SPENDING!
.

Fed up with the Know Nothing Party (formerly known as the GOP)

Josh Marshall nails it when he says the Big Money Media is blowing it big time on their reporting of the Stimulus Plan. The Republicans are spewing ignorance all over the airwaves and the pundits either sit there or nod in agreement. When we are facing one of the greatest economic disasters this country has ever seen, I really want our Fourth Estate to report from a reality-based position. And they could start by having Economists on to talk about economic issues and not just politicians and political pundits. More Paul Krugman and less whining from Lindsay Graham please!

Here is a great post at TalkingPointsMemo on how we have to hit back against the bullshit artists in the Republican Party:

A Turning Tide?

This week, out on the broad wastes of cable news drekdom and the uplands of Beltway journalistic drivel, a simple fact has gone almost entirely unreported: virtually everything congressional Republicans are saying about the Stimulus Bill wouldn't cut it in remedial economics. Not that there aren't legitimate policy differences and criticisms to be made of the outline plan before Congress. But to call the Republican complaints 'policy differences' would be to engage in what that old president used to call the soft bigotry of low expectations, as though a political party with as legitimately proud a history as the GOP could not be expected to produce more than economic illiterates.

The ground under our feet might feel firmer if this were just standard order rhetorical abuse. But the truth of it is genuinely frightening, especially since these fellows are planted in Congress rather than on one of the sidewalk corners in Union Square ranting about Socialism and Fluoride or Lyndon LaRouche.

But now there are some flickering signs that the tide may be turning, perhaps in response to just how nonsensical the conversation got earlier this week. For instance, in tomorrow's Post, business columnist Steven Pearlstein devotes an entire column to the fact most of Republicans on Capitol Hill don't even seem to grasp how a Stimulus Bill is supposed to work or even more basic stuff about demand, recession economics or even how jobs come into existence. As in, it's not a Stimulus Bill, it's a spending bill.

Tactfully, Pearlstein doesn't say explicitly for most of the article that it's Republicans he's talking about. You have to infer that from the names of the members he dings. But toward the end of the piece he can't seem to help cutting to the chase ...

"what's striking is that supposedly intelligent people are horrified at the thought that, during a deep recession, government might try to help the economy by buying up-to-date equipment for the people who protect us from epidemics and infectious diseases, by hiring people to repair environmental damage on federal lands and by contracting with private companies to make federal buildings more energy-efficient. What really irks so many Republicans, of course, is that all the stimulus money isn't being used to cut individual and business taxes, their cure-all for economic ailments, even though all the credible evidence is that tax cuts are only about half as stimulative as direct government spending."

It really does approach flat earth territory.

When you step back from the immediacy of the moment and consider just what nonsense these guys are spouting and what games they're playing while the country is legitimately in danger, it's breathtaking. All the reporters have fallen down on the job. But maybe we can hope for more tide-turning tomorrow.

Here's another example of the craptastic thinking being pushed forward by Mitch McConnell and the GOP.

F*#ing Morons!
.

Coal in the stocking

I don't know about you, but we still spent a lot of money during the holiday shopping season this year. But we cut back on presents. The difference is that we also got hit with some needed computer and house repair bills that sucked cash right out of our wallets.

But the mall parking lots still seemed full to me. But when I wandered the mall and store aisles I sensed that the place was actually less crowded, and the check out lines were much shorter. So my guess is that the holiday retail sales figures will be from average to horrible. And most stores won't be able to make it with average or below average sales figures.

Here is Kevin Drum noting a report on this from another angle:

NIGHTMARE ON MAIN STREET....From the Wall Street Journal, this is as gruesome a statistic as I've seen yet:

Corporate-turnaround experts and bankruptcy lawyers are predicting a wave of retailer bankruptcies early next year, after being contacted by big and small retailers either preparing to file for Chapter 11 bankruptcy protection or scrambling to avoid that fate.

....AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010....Recent changes in the bankruptcy code make it more difficult for retailers to emerge from bankruptcy reorganization....Lawrence Gottlieb, a New York bankruptcy attorney at Cooley Godward Kronish LLP says that only two retailers have successfully emerged from bankruptcy proceedings since the amendments to the code were passed.

A quarter of all major retailers may be in either Chapter 11 or liquidation next year? Holy cow.

UGLY!

WTF?

Hat tip to Kos

Remember, 9-11 was an economic attack

A reader on Andrew Sullivan's blog notes some comments on last night's Bill Maher show:

Is Bin Laden's Strategy Working?
A reader writes:

"Last night on Bill Maher, the comedian Gary Shandling, of all people, synthesized the connection between our current economic crisis and 9/11 and the Iraq War in a way I have not heard:

On 9/11, Al Qaeda had no expectation of a traditional military victory against the United States. The point of the attack was economic -- to draw the U.S. into expensive and protracted foreign wars that would deplete our resources and destabilize our government. By invading Iraq, George Bush became the happy idiot to assist Al Qaeda in this goal. Now, Sarah Palin and John McCain take the leaders of Al Qaeda at their word when they say Iraq is the major front in the war on terror.

Neither consider the possibility that Al Qaeda wants Iraq to be the major front because it furthers their goal of weakening the U.S. while inflicting minimal damage on their operations.

Seven years after 9/11, we are seeing Al Qaeda's long-term goal being realized: the destabilization and economic collapse of the United States. Even as it's happening, the people who supported it all along want to continue facilitating our own long-term disintegration by clinging to simplistic concepts of traditional military victory and defeat. In this sense, they are possibly the most myopic, least strategic thinkers in the history of this nation.

As Gary Shandling said, with this approach, our only hope of killing Osama Bin Laden is that he'll laugh himself to death."

My fear is that the real goal is not just to entrap the West in Iraq and Afghanistan for the rest of our lives but to trigger an even greater conflagration by being baited into a first strike on Iran. Yes: I know Shiite Iran and Sunni al Qaeda have little in common. But both must be loving the West's self-inflicted wounds of the past seven years and greatly anticipating the hotheaded McCain taking even more bait even further. Palin? Never in their wildest dreams ...

.

John McCain's Economic Plan

It's simple, really. Everyone needs to marry a beer heiress.


McCain’s Economic Plan For Nation: 'Everyone Marry A Beer Heiress'

Doing nothing is a very bad idea ...

The current economic crisis is very real, but it is very confusing for many of us. It's important to remember that changes in the stock market are only part of the story. But the wild fluctuations taking place day by day are not a good sign. I did this post on the Hindenberg Omen a while back and it is very interesting. But what I'm reading about is the current credit crunch and how it is affecting big and small companies, municipalities, and all sectors of the economy. Here is Thomas Friedman:

"This time, we are doing it to ourselves. This time, it’s our own failure to regulate our own financial system and to legislate the proper remedy that is doing us in.

I’ve always believed that America’s government was a unique political system — one designed by geniuses so that it could be run by idiots. I was wrong. No system can be smart enough to survive this level of incompetence and recklessness by the people charged to run it.

This is dangerous. We have House members, many of whom I suspect can’t balance their own checkbooks, rejecting a complex rescue package because some voters, whom I fear also don’t understand, swamped them with phone calls. I appreciate the popular anger against Wall Street, but you can’t deal with this crisis this way.

This is a credit crisis. It’s all about confidence. What you can’t see is how bank A will no longer lend to good company B or mortgage company C. Because no one is sure the other guy’s assets and collateral are worth anything, which is why the government needs to come in and put a floor under them. Otherwise, the system will be choked of credit, like a body being choked of oxygen and turning blue.

Well, you say, “I don’t own any stocks — let those greedy monsters on Wall Street suffer.” You may not own any stocks, but your pension fund owned some Lehman Brothers commercial paper and your regional bank held subprime mortgage bonds, which is why you were able refinance your house two years ago. And your local airport was insured by A.I.G., and your local municipality sold municipal bonds on Wall Street to finance your street’s new sewer system, and your local car company depended on the credit markets to finance your auto loan — and now that the credit market has dried up, Wachovia bank went bust and your neighbor lost her secretarial job there.

We’re all connected. As others have pointed but, you can’t save Main Street and punish Wall Street anymore than you can be in a rowboat with someone you hate and think that the leak in the bottom of the boat at his end is not going to sink you, too. The world really is flat. We’re all connected. “Decoupling” is pure fantasy."

It's a scary time, and of course politics will get injected into the process, emotions will run hot and hotter, and some people will make total asses of themselves:

Good times.
Here's Dan Riehl's take on it all:

"While no one should want a major meltdown of the American and world economies, there is a common sense rationale for simply allowing it to burn. I see people going on about a trillion dollars in value lost. But in any real sense, that value wasn't really there.

(...)

Some of the alarmists out there might want to take a moment to consider all the ramifications here. It may sound harsh, but the Great Depression produced many things - one of them was called the Greatest Generation.

The great economic boom of the last few decades propped up by dubious credit has produced a generation or two that thinks enough is never enough and if one can't earn it, than you either borrow it, or the government in the form of hard working taxpayers should make sure you get yours in the end.

I'm no financial expert. I realize that without some plan there will be serious pain. But I also know pain is unavoidable in life. And any government that would have its citizenry believe that isn't the case simply isn't telling them the truth."

Personally, I've always preferred the idea of trying to make myself as decent as possible, rather than waiting for catastrophe to do it for me. But if people's lives have to be destroyed in order to produce a new
"Greatest Generation", I hope that people like Dan Riehl, who think that this sort of character-building through national catastrophe is a good thing, are disproportionately represented among them. After all, as he and his family settle in for the night in their minivan, Dan Riehl would be able to console himself with the thought that it's all for the sake of the greater good. Most of us, not having had this callous and idiotic idea in the first place, would not have that comfort available to us.

.

The war on the middle class

The Chart

Scary, Scary Stuff

Why does AmEx hate America?

Hattip to Calculated Risk:

AmEx expects the economy to worsen:

“The severe decline in home prices and the marked rise in oil prices have had a fundamental impact on consumer budgets and behavior. Not just as it relates to mortgages and home-related spending, but also across the full spectrum of the consumer economy... In other words, more and more consumers who are falling behind in their payments are remaining delinquent. This causes us to assume that a greater percentage of past-due loans will not be repaid. In light of the magnitude of the negative economic trends and our experience, we now believe the economic weakness in the US will likely worsen throughout the remainder of the year and negatively impact credit and business trend ... "

.

Odds and Ends

For your reading pleasure:

• The Three Biggest Myths the Bush Administration Wants You to Believe About Offshore Drilling
  
• The Comedy Stylings of Shecky McCain
  
• This article in Vanity Fair is a fascinating look at what happened leading up to the collapse of Bear Stearns.

Big Balloon Go Boom!

I'm pessimistic about the economy. But I'm no expert.
So, what do some market analysts think?
Ever hear of the Hindenberg Omen?
Me neither. Check this out.

.

We're rolling along ... down the hill ...

Well, while we're on the subject of dire economic predictions, here are two more items from ThinkProgress.org.

U.S. consumer confidence this month “to its lowest in 16 years as high inflation continued to sap confidence and pushed expectations for the future to a record low."

And this one:

Former Federal Reserve Chairman Alan Greenspan warned today that “the U.S. economy was ‘on the brink' of a recession, with the chances of that happening at more than 50 percent.” Greenspan added that a quick recovery of the sour economy is unlikely. “A rebound at this stage is not something I think is in the immediate outlook,” he said. “There are still very considerable structural problems remaining in the financial system. They will remain for a while. It’s going to be very difficult.”

Uh-Oh.

A very nasty period is soon to be upon us - be prepared

Jon Talton at Rogue Columnist pulls this tidbit out of the foreign press:

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

Uh-Oh.

That ugly teeter-totter ...

Anyone remember STAGFLATION?