Speaking Personally Three Important Stories Dr Peter Morici: US Senate Testimony on US auto industry bailout
Quotes and Pointers
'Should Citi's management have planned for and guarded against this explosion in the risk premium? I certainly did not expect it--I did not think we could see this big a rise in the risk premium outside of a real cousin of the Great Depression, and I thought that modern tools of macroeconomic management would keep such a thing from happening. I never expected to see the unemployment rate hit 15% in my lifetime. I still don't. It's in the nature of a bank to get into trouble and be on (or over) the edge of failure in a financial crisis. Banks exist to provide liquidity and safety: to turn the long-term highly-risky investments in plant, equipment, and infrastructure that are our social capital into the short-term liquid largely-safe assets that savers largely want. This means that banks are--if they are doing there job--long duration and long risk, and their values crater whenever there is a financial crisis because a financial crisis is a sharp fall in the value of long-duration and high-risk assets.' J. Bradford DeLong 'The report is also an indirect but very explicit repudiation of the grand strategy of outgoing President George W. Bush, Vice President Dick Cheney, former Defense Secretary Donald Rumsfeld and the neo-conservative intellectuals who served them. It clearly rejects their assumption that a new century of U.S. global supremacy, leadership and even control more total than any the United States enjoyed in the past is likely or even achievable. Instead, the NIC report warns of an increasingly uncontrollable, fragmented world with strategic, military and economic power increasingly diffused -- and with the danger of local and wider wars, especially over scarce resources, greater than ever before.'
Out and About on the Net. et alli is cross posted at The Intelligence Forum A.Word.A.Day from Wordsmith.org: mythologem
Friday news of Tim Geithner's appointment to Treasury seemed to reassure the markets...again. Testimony in congress by the CEO's of Chrysler, GM, and Ford earlier in the week set off this week's downward market trend. Volatility continues with huge moves, on average over time, two dollars down for every one dollar up -- a classic proportion. Its notable that Citibank shares lost ground during that late market rally. At some point the markets will settle on a low and await signs of a recovery. On Face The Nation Austan Goolsbee, Obama's apostle to Wall Street, spoke of getting things off with a bang in the first days of Obama's presidency and target recovery within two years. So after a five year market up trend followed by a one and one half year decline which equaled all of the gain we are looking at a minimum 18 month market trough.
U.S. intel panel warns of coming national decline
'Without a new labor agreement that brings wages, benefits and work rules in line with those at the most competitive transplant factories, and without reduced debt and other liabilities, the Detroit Three will continue to lag in product innovation and field too few attractive new vehicles, because their higher costs, debt and other liabilities require them to spend less on new productive development than they should. Also, they are inclined to field products with less desirable content to compensate for higher costs. As consumers find vehicles made by Japanese and other transplants more attractive, like those imported from Korea and eventually from China, the Detroit Three will cede market share of one or a few percentage points each year.
If Chapter 11 is put off, the successors to GM, Ford and Chrysler that emerge from a bankruptcy reorganization process will be smaller and support fewer jobs than if these companies endure this difficult transition in 2009.
More jobs can be saved among GM, Ford and Chrysler and their suppliers if bankruptcy reorganization is endured now than in the future.'
Peter Morici
Attorney General Mukasey Collapses During Speech
Prepackaged Bankruptcy for AutomakersB.C. brewery toasts tough times with Bailout Bitter beer
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November 2008
November 24, 2008
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November 17, 2008
Speaking Personally Three Important Stories The Plum Book (United States Government Policy and Supporting Positions): 2008 Edition
Quotes and Pointers
'APPENDIX NO. 5
Out and About on the Net. et alli is cross posted at The Intelligence Forum A.Word.A.Day from Wordsmith.org: logy
Sometime in his first term President elect Obama will face the great dilemma President Bush faced on taxes in his four year presidency. I suspect conditions will force Obama to do the same and raise taxes during the third or fourth year of his first administration.
Senator Biden during the campaign spoke of early challenges to an Obama presidency from abroad. U.S. Roman Catholic bishops have warned the President elect that his heavy support from Catholic voters should not be taken as a referendum on abortion. Cardinal Francis George said "If the election is misinterpreted ideologically as a referendum on abortion, the unity desired by President-elect Obama and all Americans at this moment of crisis will be impossible to achieve. ... Aggressively pro-abortion policies, legislation and executive orders will permanently alienate tens of millions of Americans, and would be seen by many as an attack on the free exercise of their religion." I don't see a connection between available abortions and "free exercise of their religion" unless free exercise of religion means using government to enforce their religious views on the general population.
T. Boone Pickens said on Meet The Press he had heard President-elect Obama say twice that in ten years the U.S. will be importing no oil from the middle east. Its true. "Oct 15, 2008 ... OBAMA : I think that in ten years, we can reduce our dependence so that we no longer have to import oil from the Middle East or Venezuela."
Something will have to be done for the automotive industry but America should draw a line or else there will be pleas to bail out Hollywood and Broadway. David Bonior is whispered as Obama's pick for auto industry czar. If this happens it will be interesting to see if he is tough enough to order entire plants and lines closed.
Special Report Energy & Genius
OFFICE OF THE VICE PRESIDENT
The Vice Presidency is a unique office that is neither a part of the executive branch nor a part
of the legislative branch, but is attached by the Constitution to the latter. The Vice Presidency performs
functions in both the legislative branch (see article I, section 3 of the Constitution) and in the executive
branch (see article II, and amendments XII and XXV, of the Constitution, and section 106 of title
3 of the United States Code).
http://www.gpoaccess.gov/plumbook/2008/2008_plum_book.pdf'The executive functions of the Vice President include participation
in Cabinet meetings and, by statute, membership on the National Security
Council and the Board of Regents of the Smithsonian Institution.'
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2008_government_manual&docid=214669tx_xxx-18
'This special issue of Forbes explores both the supply and the
demand sides of energy economics. On the supply side we look at
biofuel-emitting bacteria, micronukes, smarter grids, clean coal and
that perennial favorite of politicians, ethanol. On the demand side we
look at hybrid cars, the metal mining that may make hybrids more
compelling and a utility chief who wants to get paid to produce fewer
watts.'
Edited by Bruce Upbin 120 Ways to Boost Your Brain Power
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November 10, 2008
Speaking Personally
I enjoy the ritual of voting. So on Tuesday morning about 10:45 at Grace Church it felt good to put my ballot in the tabulator and watch its counter changeover from 772 to 773. My vote made no difference since Kansas is a Red state but the Presidential election outcome is pleasing. The results of most local elections leave me feeling like an underdog who sometimes just wants to roll over.
An inflation adjusted chart illustrates the likelihood that we are in a secular bear market with the 2007 peak in total S@P returns coming in lower than the 2000 peak. More immediately the Weekly Leading Index and other data from the Economic Cycle Research Institute indicate the United States is in a deep recession and there is as yet no indication of an end or even the middle.
President elect Obama's economic kitchen cabinet met in Chicago. Obama gave his first press conference since the election but was not specific on methods other than 1) big fiscal stimulus to create jobs and 2) something to preserve jobs and manufacturing capacity in the U.S. automotive/support industries which is essential to the US industrial base. Triage in these industries will be ugly. In companies deemed unworthy of saving/loans, stockholders will loose whatever capital value they placed on their stock. Inefficient plants will join the rustbelt. Workers will lose high paid jobs and look for lower paid jobs in an 8-10% unemployed environment. Automotive pensioners and healthcare will need other sources of funding...this may not be a depression but it feels like the great recession. Robert Reich calls it the "mini depression."
Rahm Emanuel was all over the Sunday morning news programs. Fox News Sunday had John Podesta who is co-chairing the transition team. Both emphasized "there is only one President at a time." On face the nation Emanuel outlined a middle class cash flow change with the average family today having $2000 less in income and $4000 more in health and education cost. Initially Mr. Obama's program will address this $6000 cash flow problem with a new $1000 income tax deduction. This is 60% more. stimulus than the 2008 tax rebate.
Saturday, a local Mensan, Bob Beattie, author of Nightmare in Wichita: The Hunt for the BTK, spoke about his NEW book and made himself available to talk with our group about the Electoral College. He is involved in politics as well as election law. Bob is a good guy and I have a copy of Nightmare in Wichita on my bookshelf in the small collection of Wichita/Kansas books. He says there is not much overlap between the true crime and mystery book segments. For me that is very true. I enjoy reading mystery but true crime leaves me cold. I've never read In Cold Blood. Clouds of Witness by Dorothy Sayers is my idea of good recreational reading.
Three Important Stories
The Political Mind
See also: Winter Lights Oxford: hysterical tosh The Mini Depression and the Maximum-Strength Remedy
Quotes and Pointers
"We reason in terms of frames, metaphores, and narratives."
George Lakoff
"here are some major themes. A frequent one in the US is that global elites are plotting – via the Bilderberg Group and the Council on Foreign Relations, among others – to establish a “One World Government” dominated by themselves rather than national governments. Sometimes, more folkloric details come into play, broadening the members of this cabal to include the Illuminati, the Freemasons, Rhodes Scholars, or, as always, the Jews.The hallmarks of this narrative are familiar to anyone who has studied the transmission of certain story categories in times of crisis. In literary terms, this conspiracy theory closely resembles The Protocols of the Elders of Zion , featuring secretive global elite with great power and wicked aims. Historically, there tends to be the same set of themes: fearsome, uncontrolled transformative change led by educated, urbanized cosmopolitans.
Students of Weimar Germany know that sudden dislocations and shocks – rapid urbanization, disruption of traditional family and social ties, loosening of sexual restrictions, and economic collapse – primed many Germans to become receptive to simplistic theories that seemed to address their confusion and offer a larger meaning to their suffering."
'So the crucial questions become (1) how much will the government have to spend to get the economy back on track? and (2) what sort of spending will have the biggest impact on jobs and incomes?
The answer to the first question is "a lot." Given the magnitude of the mess and the amount of underutilized capacity in the economy-- people who are or will soon be unemployed, those who are underemployed, factories shuttered, offices empty, trucks and containers idled -- government may have to spend $600 or $700 billion next year to reverse the downward cycle we're in.
The answer to the second question is mostly "infrastructure" -- repairing roads and bridges, levees and ports; investing in light rail, electrical grids, new sources of energy, more energy conservation. Even conservative economists like Harvard's Martin Feldstein are calling for government to stimulate the economy through infrastructure spending. Infrastructure projects like these pack a double-whammy: they create lots of jobs, and they make the economy work better in the future. (Important qualification: To do this correctly and avoid pork, the federal government will need to have a capital budget that lists infrastructure projects in order of priority.'Robert Reich
Out and About on the Net.
Braveheart - THE Speech
NANO WIRE BATTERY
Presidential Power on the Road
et alli is cross posted at The Intelligence Forum
A.Word.A.Day from Wordsmith.org:
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November 03, 2008
Speaking Personally
Go Team Obama!
Three Important Stories
US annualized econ growth rate at record low-ECRI
Monitor shifts from print to Web-based strategy
Rate cut not the quick fix everyone craves
Quotes and Pointers
'"With WLI growth plummeting to the lowest reading registered in its six-decade history, the outlook for the economy has darkened dramatically." said Lakshman Achuthan, managing director at ECRI.
The index slide was due to a widespread decline in the components, the key exception being a measure of money supply, he said. '
Rodrigo Campos and Walker Simon
"Changes in the industry - changes in the concept of news and the economics underlying the industry - hit the Monitor first," given its relatively small size and the complex logistics required for national distribution, Mr. Wells said. "We are sometimes forced to be an early change agent."
http://www.csmonitor.com/2008/1029/p25s01-usgn.html
"Banks are like roach motels. The rate cuts go in but they don't come out."
Robert Brusca
`(2) NEGATIVE INTEREST LOAN- The term `negative-interest loan' means a loan made by a State from its water pollution control revolving fund to a rural and disadvantaged community pursuant to section 603(d)(1) under which the interest rate is zero percent per year and, in addition, the State forgives an amount of the principal of the loan not to exceed 2 percent per year but not to exceed a total forgiveness of 20 percent of the principal over the term of the loan.'.
http://www.congress.gov/cgi-bin/query/z?c103:H.R.3810:
"I'm looking forward to complete retirement. Retirement is my human right."Dalai Lama
Out and About on the Net.
The transformation of the Arctic
U.S. Rejects G.M.’s Call for Help in a Merger
et alli is cross posted at The Intelligence Forum
A.Word.A.Day from Wordsmith.org pace
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