I am looking forward to some nicer spring weather to lift us northeasterners out of our doldrums. Sometimes a little sun can move us beyond the negative news of the day; the constant clamor of the economic times and the distrust of the current solutions that is now reaching fever pitch. We are all armchair economists trying to parse what historical principles are the most fitting in a time where no precedent exists and who is to blame for what went wrong.
Whatever the case or blame, the enormous debt that the country amassed has fueled an unsustainable economic expansion that simply has to shrink. The problem is neither we nor the government can decide who should survive and who should not. The government has made its choices for now; notably the financial industry and its insurance lifelines but we are not addressing the true fact of our 70% based consumer economy; only spending can get it back on track. Period. Until this aspect is addressed, no amount of posturing or investor confidence or stock market rally or whatever can get the ball rolling again.
Impatience with the new status quo just gets the collective blood boiling; in this country of short attention spans and complete dependence on instant gratification - we remain in denial about our disease and the cure. We don't need any more debt fueled medicine, we have cancer and we need surgery. So come on sunny spring, we need something to smile about.
Showing posts with label 2009 economic depression.. Show all posts
Showing posts with label 2009 economic depression.. Show all posts
Monday, April 6, 2009
Thursday, March 5, 2009
Lions and Tigers and Bears, Oh My
Can it be that Citigroup might follow the footsteps of Bear Stearns, Wachovia, Merrill Lynch & Lehman Brothers? Will it be swallowed whole by a rival, like JPMorgan Chase or will it go belly up and disappear. The mightly financials and the mighty companies are falling; GE is begging for mercy and GM finally admitted today that it is not a viable enterprise without bailout funds.
The very lives of these companies that have ruled the world for as long as I've known are collapsing. These mighty companies were the kings of the jungle, conjuring strength, agility and invincibility. Maybe if the Bellwethers like GE are cracking, this is a signal of the passing of an old era. Maybe these companies are not supposed to survive at all. Maybe these are all unsustainable business models.
The government is trying to address the financial meltdown by injecting all of those bailout funds into the system. But maybe the financial system as we know it is no longer viable, maybe we are trying to fix something that is already broken.
The very lives of these companies that have ruled the world for as long as I've known are collapsing. These mighty companies were the kings of the jungle, conjuring strength, agility and invincibility. Maybe if the Bellwethers like GE are cracking, this is a signal of the passing of an old era. Maybe these companies are not supposed to survive at all. Maybe these are all unsustainable business models.
The government is trying to address the financial meltdown by injecting all of those bailout funds into the system. But maybe the financial system as we know it is no longer viable, maybe we are trying to fix something that is already broken.
Wednesday, March 4, 2009
A Populace Needs to be Educated
If I had one wish, it would be to time the bottom of the market. I would find some money and put it in and ride the next wave to financial glory. Of course, it is a wish, for as we have been told through our formative years, there is no way to time the market. Nevertheless, we have pundits, daily, trying to call the bottom. It seems that we are already so sick of the financial pain that we need to wrap it up and get to the next level. Sorry lads and lasses, no generation gets away with everything.
We would not be well-rounded citizens if we did not feel the pain and make no mistake about it, there is plenty more pain to come. Me, I am just calling for a showing of the hands, someone, anyone, brave-up and tell the truth and let us know how much you really need AIG? GMAC? and the rest of you clowns hiding from a real valuation of those so-called toxic assets. AIG, what would it really cost to cover those bets? GE Money/GE Capital, Citigroup, Merrill Lynch/Bank of America, how much of those bets did you make? The best thing that the government can do now is to order all of these financials hiding behind their faux balance sheets to tell us the real deal.
If Obama is to be praised for a "true up" of the 2010 budget as he strives to incorporate all government expenses - all off-the-books expenditures like the costs for war and the deficiencies in the AMT and other budget machinations, i.e. no bid contracts and the like, why are we not demanding this from the companies who we are bailing out? Where are the forensic accountants when you need them? At this point in this dismal economic cycle, we need to know how much of these off-the-books assets are out there. Today, I am hearing that Bernanke wants to inject a trillion dollars into the shadow banking system, the system where all of these off-the-books assets reside like those credit swap derivatives.
We sit around and complain that there is no transparency in the system but we are not demanding answers. We need an independent citizens brigade to track all of these taxpayer dollars that are being injected into the financial system. At the very least, the taxpayer should know how much and to whom all of this money is being given. We should be protesting over this but our own financial woes are crippling us. Who has time to check out who the government is giving money to when our own personal financial lives are in shambles? I have been out of work 3 months; this milestone is now resonating on a daily basis. The reality has set in that the return on resume submission is dismal, there has been only one interview for nearly 50 submitted. These are not the type of odds that step up the employment quotient though I am hearing that I am lucky to have had one callback.
The bigger question is why I have not been able to get to the bottom of this financial crisis in all of its complexity. Previous recessions were explainable but this most recent debacle is rooted in financial instruments that we, the taxpayer, simply do not understand. There needs to be a whole-hearted effort on the part of the media and the government to explain the elements and educate a society on its new role as financial savior. Now we have people taking sides, even myself, trying to simplify the matter, saying bloviated statements like "let them fail," "no more bailouts," and "the democrats are mortgaging the future" and so on. What is the truth? I am being led to believe that while the government is supposedly bailing out AIG, GE, GM, and the rest of those fat-cats under some dubious rubric of "too big to fail," they are not explaining the real reason; the devasting financial shock to the worldwide banking/financial system of valuing all of those derivatives.
If this is true, then it needs to be explained to the American people. We have nothing to lose and everything to gain. We do not want the financial equivalent of the post 9-11 exhortation of "go out and shop, carry on as you normally do" response to crisis, we should be demanding a real appraisal of what we are getting into with these continued bailouts. If the situation is dire, tell us. Last fall, businesses were planning on a turnaround during the second half of this year. We have now reached the reality stage where it is clear that the turnaround may not happen until 2010 or beyond. I might have planned better last Fall if I had known that. Facts need to be faced. A populace needs to be educated.
We would not be well-rounded citizens if we did not feel the pain and make no mistake about it, there is plenty more pain to come. Me, I am just calling for a showing of the hands, someone, anyone, brave-up and tell the truth and let us know how much you really need AIG? GMAC? and the rest of you clowns hiding from a real valuation of those so-called toxic assets. AIG, what would it really cost to cover those bets? GE Money/GE Capital, Citigroup, Merrill Lynch/Bank of America, how much of those bets did you make? The best thing that the government can do now is to order all of these financials hiding behind their faux balance sheets to tell us the real deal.
If Obama is to be praised for a "true up" of the 2010 budget as he strives to incorporate all government expenses - all off-the-books expenditures like the costs for war and the deficiencies in the AMT and other budget machinations, i.e. no bid contracts and the like, why are we not demanding this from the companies who we are bailing out? Where are the forensic accountants when you need them? At this point in this dismal economic cycle, we need to know how much of these off-the-books assets are out there. Today, I am hearing that Bernanke wants to inject a trillion dollars into the shadow banking system, the system where all of these off-the-books assets reside like those credit swap derivatives.
We sit around and complain that there is no transparency in the system but we are not demanding answers. We need an independent citizens brigade to track all of these taxpayer dollars that are being injected into the financial system. At the very least, the taxpayer should know how much and to whom all of this money is being given. We should be protesting over this but our own financial woes are crippling us. Who has time to check out who the government is giving money to when our own personal financial lives are in shambles? I have been out of work 3 months; this milestone is now resonating on a daily basis. The reality has set in that the return on resume submission is dismal, there has been only one interview for nearly 50 submitted. These are not the type of odds that step up the employment quotient though I am hearing that I am lucky to have had one callback.
The bigger question is why I have not been able to get to the bottom of this financial crisis in all of its complexity. Previous recessions were explainable but this most recent debacle is rooted in financial instruments that we, the taxpayer, simply do not understand. There needs to be a whole-hearted effort on the part of the media and the government to explain the elements and educate a society on its new role as financial savior. Now we have people taking sides, even myself, trying to simplify the matter, saying bloviated statements like "let them fail," "no more bailouts," and "the democrats are mortgaging the future" and so on. What is the truth? I am being led to believe that while the government is supposedly bailing out AIG, GE, GM, and the rest of those fat-cats under some dubious rubric of "too big to fail," they are not explaining the real reason; the devasting financial shock to the worldwide banking/financial system of valuing all of those derivatives.
If this is true, then it needs to be explained to the American people. We have nothing to lose and everything to gain. We do not want the financial equivalent of the post 9-11 exhortation of "go out and shop, carry on as you normally do" response to crisis, we should be demanding a real appraisal of what we are getting into with these continued bailouts. If the situation is dire, tell us. Last fall, businesses were planning on a turnaround during the second half of this year. We have now reached the reality stage where it is clear that the turnaround may not happen until 2010 or beyond. I might have planned better last Fall if I had known that. Facts need to be faced. A populace needs to be educated.
Tuesday, February 17, 2009
A Different Vision of Productivity
It is President's week vacation and while most of the world went back to work today, almost the entire school population is on vacation this week. My husband's company was not off on Monday as it is just as much a regular business day for many private companies though the stock market and the banks are closed.
Today, President Obama signed the $787 stimulus package so it is a go. The Dow went down nearly 300 points when just last week it kept jumping on even a whiff of a bailout package. Today, there is a signed, sealed and delivered package and it drops like a rock. Also, the auto companies are back, hat in hand as we knew they would be, begging for another $39 billion to remain afloat. In addition, the deadline is upon them to submit their corporate sustainability plans. The numbers so far have been dreadful so I don't think much will change for them in the short term though it seems that the UAW has consented to a few concessions which may help the bottom line. How long will it take the Unions to realize that no one is immune from this Recession? Teachers, Government Workers, Carpenters, Electricians, Plumbers and everyone else belonging to similar organizations, you all need to pitch in, to help yourselves and ourselves because there is no good timeline for getting out of this Recession.
As much as the President tries to emphasize that there is no easy fix and a turnaround will not be immediate, we want those 8 years of George Bush to turn around; we certainly do not want to suffer for our excesses too long, right about now or at least upcoming in the Spring there should be a tidy picture of turnarounds; feel good stories about how the stimulus package is helping many families keep their homes. How the money will be apportioned will be of grave importance. How do we structure ourselves for opportunity in the next few years?
What side of the fence will we all be on when we emerge from this Recession? It is hard to look it in the eye, recession. It is hard to accept that it does not seem to be slowing. Everyone is being advised to work as hard as they can and stand out in order to save their job or themselves from layoff. Everyone who has a job is working as hard as they can because they fear losing their job. Those of us who lost their jobs feel like they have to prove productivity while they are home daily clicking resumes into a blank world; an auto-reply notice thanking you for submitting your resume. One time I did hear back that I was not the type of candidate they were seeking - it was a job on Long Island so I was rooting for it a little bit. Now, I am sending resumes to NYC and NJ wryly wondering how in the heck I would swing it; it is hard for both parents to commute to NYC from Suffolk County.
President Obama's plan was supposed to save us and it landed as flatly when the TARP was signed back in the fall. How much more Government spending will be necessary? I think most poeple know that the well has run dry but we are all in denial about that part. 8 whole years of destruction can't be turned around in a month but we want Obama to have fixed it today and we want our lives to be freed from our own monetary sins.
Today, President Obama signed the $787 stimulus package so it is a go. The Dow went down nearly 300 points when just last week it kept jumping on even a whiff of a bailout package. Today, there is a signed, sealed and delivered package and it drops like a rock. Also, the auto companies are back, hat in hand as we knew they would be, begging for another $39 billion to remain afloat. In addition, the deadline is upon them to submit their corporate sustainability plans. The numbers so far have been dreadful so I don't think much will change for them in the short term though it seems that the UAW has consented to a few concessions which may help the bottom line. How long will it take the Unions to realize that no one is immune from this Recession? Teachers, Government Workers, Carpenters, Electricians, Plumbers and everyone else belonging to similar organizations, you all need to pitch in, to help yourselves and ourselves because there is no good timeline for getting out of this Recession.
As much as the President tries to emphasize that there is no easy fix and a turnaround will not be immediate, we want those 8 years of George Bush to turn around; we certainly do not want to suffer for our excesses too long, right about now or at least upcoming in the Spring there should be a tidy picture of turnarounds; feel good stories about how the stimulus package is helping many families keep their homes. How the money will be apportioned will be of grave importance. How do we structure ourselves for opportunity in the next few years?
What side of the fence will we all be on when we emerge from this Recession? It is hard to look it in the eye, recession. It is hard to accept that it does not seem to be slowing. Everyone is being advised to work as hard as they can and stand out in order to save their job or themselves from layoff. Everyone who has a job is working as hard as they can because they fear losing their job. Those of us who lost their jobs feel like they have to prove productivity while they are home daily clicking resumes into a blank world; an auto-reply notice thanking you for submitting your resume. One time I did hear back that I was not the type of candidate they were seeking - it was a job on Long Island so I was rooting for it a little bit. Now, I am sending resumes to NYC and NJ wryly wondering how in the heck I would swing it; it is hard for both parents to commute to NYC from Suffolk County.
President Obama's plan was supposed to save us and it landed as flatly when the TARP was signed back in the fall. How much more Government spending will be necessary? I think most poeple know that the well has run dry but we are all in denial about that part. 8 whole years of destruction can't be turned around in a month but we want Obama to have fixed it today and we want our lives to be freed from our own monetary sins.
Thursday, January 8, 2009
Countdown to the "d" word
President Obama said today that any economic stimulus package must be broad in scope and swiftly executed if we have any chance of staving off the coming economic crisis. Well, he may not be technically President yet, but he has already taken over Capitol Hill two weeks early. As it turns out, though we are 1 year into this recession as proclaimed by the Economic Board, we are actually much closer to the beginning of the crisis than we realize. We are not turning any corner any soon; we are not on our way out of it, we are still on our way in.
All of the Government's efforts to avert a disaster have only delayed it. When the final numbers of 2008 start to roll out momentarily, they will be worse than we thought and the worst is yet to come. It appears that a depression is imminent and the truth is that all of the Government action thus far was not to minimize a recession to keep it mild and/or shorter, it was an attempt to derail a depression and unfortunately that train is still barreling towards us like bullet. Furthermore, all that money that the taxpayers funneled into the financial markets went onto the books of the same greedy folk who helped us into ruin and all they cared about was helping themselves.
The economy needs another helping of funds, even more than it did the first time; a fact that was accurately predicted by many and now the makers of that plan have fallen into sudden obscurity. Have we heard anything from Paulson or Bernanke this year? Not a peep. This awakening will be oh so very, very rude. We are already in a depression; let's see how long it will take for the media to pop out the "d" word.
Maybe we'll get some truth back into the system. I would rather know exactly what I'm dealing with instead of being lulled into a false sense of security that things are better than they really are; that is a damning position to be in; planning for the wrong situation completely. The have been telling us to plan for the worse and hope for the best when in truth we need to plan for disaster and hope for the worst; full survival mode is required.
All of the Government's efforts to avert a disaster have only delayed it. When the final numbers of 2008 start to roll out momentarily, they will be worse than we thought and the worst is yet to come. It appears that a depression is imminent and the truth is that all of the Government action thus far was not to minimize a recession to keep it mild and/or shorter, it was an attempt to derail a depression and unfortunately that train is still barreling towards us like bullet. Furthermore, all that money that the taxpayers funneled into the financial markets went onto the books of the same greedy folk who helped us into ruin and all they cared about was helping themselves.
The economy needs another helping of funds, even more than it did the first time; a fact that was accurately predicted by many and now the makers of that plan have fallen into sudden obscurity. Have we heard anything from Paulson or Bernanke this year? Not a peep. This awakening will be oh so very, very rude. We are already in a depression; let's see how long it will take for the media to pop out the "d" word.
Maybe we'll get some truth back into the system. I would rather know exactly what I'm dealing with instead of being lulled into a false sense of security that things are better than they really are; that is a damning position to be in; planning for the wrong situation completely. The have been telling us to plan for the worse and hope for the best when in truth we need to plan for disaster and hope for the worst; full survival mode is required.
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