“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."
Friday, December 05, 2008
Care to compare this Ford factory to any UAW plant in Michigan?
Hat tip: Doug
Sorry about the rapid fire posts, but this was too good to not put up. Spread this one around, before we blow another $100 billion of your dollars.
Pull a rabbit out of a Hat and Switch the comments or the Lede!ReplyDelete
It screws up the search engines and gives a dead link if you change the title. This should be shown to the Senate committee.ReplyDelete
Yeah, Dodd and Franks would say that's how they would have done it if they had been in charge!ReplyDelete
Here is another important reason for manufacturing in in the AmericasReplyDelete
Don't miss this new Shanklin Audio while it's still available on the free page of Rush's site:ReplyDelete
Barney Sings: Banking Queen
In Case that link doesn't work.
Did you see this with Barney Frank?ReplyDelete
The founders wouldn't believe it's come to this.ReplyDelete
Sure they would have, doug.ReplyDelete
They'd just be surprised it took so long.
What with the direct election of Senators and a National Bank. Both things that a large number of the 'Founders' opposed, with good reason.
Activist vs OriginalistReplyDelete
Who will side with Donofrio?
Original Intent vs. Living DocumentReplyDelete
Was Chester Arthur A Cheater?ReplyDelete
At the end of the dayReplyDelete
At this moment in time
With all due respect
It’s a nightmare
It’s not rocket science
10 worst phrases in 2008
With all due respect, at this moment in time, at the end of the day , I personally, absolutely, think it's fairly unigue, it's not rocket science and it's a nightmare, to be stewing 24/7 about gas prices when we shouldn't of.
Sunset starlight smiley face over Australia. Neat.ReplyDelete
Smile in the Sky
You don't need complex manufacturing to build electric cars.ReplyDelete
What you need to be talking about is more R&D in new technology and simplicity in manufacture and parts, not more deployment of expensive robotics in an assembly plant that builds complex dinosaur cars. You people are really out to lunch.ReplyDelete
530,000 job losses.ReplyDelete
It does not seem that the hard ass approach to home foreclosures is working out too well. What contemptible fools we have chosen to lead us.
Now the hard asses want to force the auto companies into bankruptcy. That means all the creditors to the auto companies will have to take their medicine. More lay-offs, more foreclosure, more failing banks.
November job losses steepest since 1974ReplyDelete
Friday December 5, 8:41 am ET
WASHINGTON (Reuters) - Employers axed payrolls by a shocking 533,000 in November for the weakest performance in 34 years, government data on Friday showed, as the recession inflicted a mounting toll on the U.S. labor market.
How low will they go?ReplyDelete
"At 9,356 feet, Shell's New Offshore Oil Well Is the Deepest in the World."
Pathetic, is what it is.
You can't just give them a blank check, you can't let them go bankrupt. What ever you do, nothing will work till you stop the collapse in housing prices. To do that you have to reduce the supply. That means stop building and stop foreclosures.ReplyDelete
We keep this up, at this pace and we will tank. Ten percent of all US loans are in default. At some stage there will be a cascade where everyone will stop paying.ReplyDelete
That means stop building and stop foreclosures.ReplyDelete
You can retrofit homes and commercial buildings to green standards. That will keep the construction labor force employed. It will also bring up the value of property. Buildings will be more energy efficient, cheaper to maintain, and the nation will save trillions in energy costs.
GM needs to be producing maximum 4 car models (electric only) under one label. Until that's done, I would not give them a penny.ReplyDelete
Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall, Wuling.
And probably over 50 car models between them.
Methuselah, we're going to give them everything they want, even though they burn through $12 billion a month. The alternative is bankruptcy. The first thing the bankruptcy judge will do is tear up the contract with UAW that lets people do crossword puzzles all day for 95% of their original salary. Dems control congress and soon the white house. Those crossword puzzle solvers vote D. Connect the dots.ReplyDelete
Yves a few days ago at nakedcapitalism.com:ReplyDelete
Martin Wolf Says Big Stimulus Programs by Big Debtor Countries Will End in Tears
Listen to this article. Powered by Odiogo.com
One thing I have found troubling is the near-unanimity in the US that we must Do Something about the burgeoning economic crisis, and that Something is big time monetary and fiscal stimulus.
Near unanimity is almost never a good thing in the political and policy realm, since conditions and options are sufficiently complicated so as to make it unlikely that there is a magic bullet.
Not to beat a dead horse, but we have been struck by the number of analogies made to the Great Depression that strike us as wrongheaded. The first is the idea that throwing money at "stimulus" will actually do the job, I see a lot of back of the envelope calculations of what % of GDP it will take to do the job.
But as the misguided tax rebates showed, it is quite possible to devise programs that are largely ineffective (roughly 80% of the rebates went to savings or debt reduction, which is a form of savings). A lot of money has similarly been thrown at the "get credit markets working again" program. And what are the results? Consumer and small business credit slashed, private securitizations a thing of the past, almost no debtor in possession financing (crucial for Chapter 11 bankruptcies), letters of credit scarce and costly, A2/P2 commercial paper at record spreads, and the Fed and Treasury still seeming to create, increase, or extend programs on virtually a weekly basis.
So what economist Tom Ferguson calls the "hydraulic Keynesian" approach might not be as successful as its advocates suggest. And that assumes it is the right remedy. We have argued that Keynes himself would not be on board with the idea of the US leading the stimulus charge:
The operating assumption behind US policy now is seeing the US situation as parallel to that of the US in the Depression, and taking the view, based on the fact that the US seemed to finally shake off the slump with the demands of wartime production and the unprecedented budget deficits that accompanied them. But there were considerable worries in 1946 that the US would fall back into Depression. The conventional view is that pent-up demand carried the US through, after a sharp but very short downturn in 1946.
However, would this strategy have worked in a peacetime setting? The US also emerged from its slump to a world with a tremendous amount of industrial production destroyed by the war. Thus, the US, whose problem in the late 1920s (which didn't look like a problem at the time) was that it was a huge exporter, to the point where it sucked up so much gold as to be destabilizing to the financial system, could with 50% of world GDP, revert to its preferred old role with less damaging side effects. Had the rest of the world gone into wartime levels of stimulus along with the US, without the loss of productive capacity, would there ever have been an end of the beggar-thy-neighbor trade policies of the 1930s? International trade didn't just fall, "collapsed" is not an uncommon characterization of the degree of contraction....
Similarly, as we have said before, the US was a world-dominating exporter, as China is now, and had the biggest gold reserves, as China now had the largest FX reserves. Thus it is China that needs to undergo a huge-scale stimulus program to make up for the loss of demand from the US. Keynes, in the 1930s, advocated that the US make up for the demand loss rather than expecting the US's overindebted European trade partners to continue overconsuming....
Yet what is being advocated as a Keynesian remedy is in fact the opposite of what Keynes called for in his day. Keynes' prescription then would lead to a global rebalancing, with the US depending more on internally generated demand and less on its foreign partners (who were defaulting on their government debt). But if it were successfully deployed in the US now, it wold lead to a continuation, of our excessive consumption and China's underdevelopment of its internal demand.
Martin Wolf, in today's Financial Times, comes to a similar conclusion:
With businesses uninterested in spending more on investment than their retained earnings, and households cutting back, despite easy monetary policy, fiscal deficits are exploding. Even so, deficits have not been large enough to sustain growth in line with potential. So deliberate fiscal boosts are also being undertaken...
This then is the endgame for the global imbalances. On the one hand are the surplus countries. On the other are these huge fiscal deficits. So deficits aimed at sustaining demand will be piled on top of the fiscal costs of rescuing banking systems bankrupted in the rush to finance excess spending by uncreditworthy households via securitised lending against overpriced houses.
This is not a durable solution to the challenge of sustaining global demand. Sooner or later....willingness to absorb government paper and the liabilities of central banks will reach a limit. At that point crisis will come. To avoid that dire outcome the private sector of these economies must be able and willing to borrow; or the economy must be rebalanced, with stronger external balances as the counterpart of smaller domestic deficits. Given the overhang of private debt, the first outcome looks not so much unlikely as lethal. So it must be the latter.
In normal times, current account surpluses of countries that are either structurally mercantilist – that is, have a chronic excess of output over spending, like Germany and Japan – or follow mercantilist policies – that is, keep exchange rates down through huge foreign currency intervention, like China – are even useful. In a crisis of deficient demand, however, they are dangerously contractionary.
Countries with large external surpluses import demand from the rest of the world. In a deep recession, this is a “beggar-my-neighbour” policy. It makes impossible the necessary combination of global rebalancing with sustained aggregate demand. John Maynard Keynes argued just this when negotiating the post-second world war order.
In short, if the world economy is to get through this crisis in reasonable shape, creditworthy surplus countries must expand domestic demand relative to potential output. How they achieve this outcome is up to them. But only in this way can the deficit countries realistically hope to avoid spending themselves into bankruptcy.
The UK is closer to the endgame than the US, so it is easier for them to perceive the risks (Willem Buiter has detailed the parallels between the UK and Iceland). The US, with the advantage of its deep Treasury markets and the reserve currency, has more rope with which to hang itself and its hapless creditors.
Nouriel Roubini in the FT:ReplyDelete
To reduce the former spread the central bank needs to commit to maintain policy rates close to zero for a long time and/or start outright purchases of government bonds; to reduce the latter it needs to spread massive liquidity, such as by direct purchases of commercial paper, mortgages, mortgage-backed securities (MBS) and other asset-backed securities. The Fed has already crossed that bridge with facilities that are aimed at reducing short-term market rates, such as Libor spreads; it has now moved to influence long-term mortgage rates by buying MBSs.
Traditionally, central banks are the lenders of last resort but they are becoming the lenders of first and only resort, as banks are not lending. Central banks are becoming the only lenders in the land. With consumption by households and capital spending by corporations collapsing, governments will soon become the spenders of first and only resort as fiscal deficits surge.
The financial crisis has already become global as financial links transmitted US shocks globally. The overall credit losses are likely to be close to a staggering $2,000bn. Thus, unless financial institutions are rapidly recapitalised by governments the credit crunch will become even more severe as losses mount faster than recapitalisation.
But with governments and central banks bringing private sector losses on to their balance sheets, fiscal deficits will top $1,000bn for the US in the next two years. The Fed and the Treasury are taking a massive amount of credit risk, endangering the long-term solvency of the US government.
In the next few months, the flow of macroeconomic and earnings news will be much worse than expected. The credit crunch will get worse, with deleveraging continuing as hedge funds and other leveraged players are forced to sell assets into illiquid and distressed markets, leading to further cascading falls in prices, other insolvent financial institutions going bust and a few emerging market economies entering a full-blown financial crisis.
The worst is not behind us: 2009 will be a painful year of a global recession, deflation and bankruptcies. Only very aggressive and co-ordinated policy actions will ensure the global economy recovers in 2010 rather than facing protracted stagnation and deflation.
Note: He's pegged US unemployment next year at 10%. Most other notables have projected around 8%.
GM is the least of the problems. The big problem is the yearly $1.4 trillion in welfare spending that the military mafia extracts from US taxpayers. That needs to end.
Vertical integration in the auto industry is now the signal complication.ReplyDelete
At the Corner:
Dots and Dominoes [Henry Payne]
Detroit, Mich. — My friend Joe Lehman, President of Michigan’s Mackinac Center, one of the country’s premier state think tanks, made this comment to me after watching Thursday’s auto bailout hearings:
How come nobody connects the following dots:
1. Massive bank problems precipitate a $700 billion federal bailout.
2. Meanwhile, private companies (including automakers) find it difficult to get banks to loan them money.
3. So those private companies go to the feds for bailouts of their own.
4. Nobody says: "The federal government won't bail out companies that can't get private loans. That's why we gave the money to the banks, so the banks could make private loans. Loan money is what banks do. If you need money, go see a banker. We gave them lots of money they can loan out. Maybe they'll loan some to you."
Am I missing something?
An excellent point. So I put it to some auto supplier and finance sources, and this is what they say we’re missing: The federal credit bailout ain’t working.
Credit is still frozen. No banks are willing to lend. And the auto companies are still in free fall.
These sources connect the dots this way:
1. GM and Chrysler go bankrupt at the end of December.
2. As a result, they suspend billions in payment obligations.
3. Their massive supplier chain falls like dominoes as one supplier after another goes bankrupt without the payments.
4. The economy gets sucked further under water.
But if the $700b credit bailout didn’t work, will the $34b auto bailout work? And for how long?
— Henry Payne is an editorial cartoonist and writer for the Detroit News.
Buick, Cadillac, Chevrolet, GM, GMC, Pontiac, those are pretty much the same car, Mat, using the same frame, engines, etc.ReplyDelete
Daewoo, Holden, Vauxhall, Wuling, I've never heard of any of these, showing how out of touch I am.
Trish good point. Maybe the government could guarantee a portion of the loans to the auto industry, but the problem is deflation.ReplyDelete
People will not purchase a long term asset that may be worth less in a month than it is today. The largest asset, by far, is a private residence. that is compounded by higher than normal debt obligations against homes.
The US economy is built on consumers, who have built their wealth against their homes, which are supported by higher prices, but serviced by a cash flow from income and wages.
The keystone is the house. This thing will not stop until housing prices and now incomes top falling.
Brad DeLong on the news today:ReplyDelete
Everytime I remark to Barry Eichengreen about the disjunction between the intensity of the financial crisis and its limited transmission to the real economy, he says "just wait." I guess we can stop waiting.
"Limited transmission to the real economy"?
I'm not sure what is going on in Berkeley, but the effects in the "real economy" in Minnesota is apparent and has been apparent for months. No residential construction to speak of. Taconite mines closing in northern Minnesota. Lowest level of shipping out of Duluth in 30 years. Commercial and industrial construction off of a cliff with hundreds of construction managers (and therefore thousands of construction workers) gone. Retail slumping, non-chain stores and restaurants closing. Rumors of chain stores closings. Every day on the TV stories with ways of saving money. 25% increase in use of food shelves. More people on street corners begging for money. More people lined up at the Basilica for free coffee and bologna sandwiches. Record deficits in state tax revenue. School districts cutting back. Nurses being laid off because of fewer optional surguries and treatments. Cutbacks in employment at NWA/Delta. Rescap shut down. GE factoring operation shutdown. Cutbacks at Star-Tribune paper among others. Dropping ad revenue. Cut-back at KSTP--Hubbard broadcasting's home station. Etc., etc., etc...
He doesn't add, "And it's pretty goddamned cold, to boot."
those are pretty much the same car, Mat,ReplyDelete
So what you're saying, it's all the same shit, just shit that's marketed more and less creatively.
The first thing Steve Jobs did when he came back to Apple, and resurrect it from the dead, was to simplify the product matrix. The second thing he did was kill OS9. The new Apple Unix Operating System was branded OSX. That's what made multiprocessors possible, that's what made Intel processors possible, that's made the iPhone and the iPod Touch possible, and that's what made consumers and investors in Apple rich.
There's a lesson to be learned there.
The keystone is the house. This thing will not stop until housing prices and now incomes top falling.ReplyDelete
Fri Dec 05, 11:25:00 AM EST
I hate to lean on one guy too much, but Nouriel Roubini sees the coming crisis as one of stag-deflation. Lasting at least through the coming year.
With cascading, systemic effects already in motion, there just is no consensus as to the best solutions.
My favorite scene in Apollo 13 is when all the top flight engineers are herded into a room and a bag of sundry parts is dumped onto a table by Gene. The astronauts needed to fashion a carbon dioxide filter or they would die in the next few hours. Meaning that the flight engineers gathered in that room had to figure out how they could do that with the materials on hand. The engineers did; the crew survived to come home.
Without much or even any hyperbole, I think of that scene in circumstances like this.
The auto industry baillout is going to be hard to structure, especially in the short time period available.ReplyDelete
However, the Senators, yesterday, were asking the right questions, and coming up with some pretty good ideas. I think they'll get something figured out.
All in all, the various players (you know who they are) should all be pistol-whipped - Nay, taken out back and shot) for getting us into this mess; HOWEVER, the response has been remarkable. It just Might work.
Gas prices (thank you, Ethanol) are a Saviour.
BTW, 500,000 jobs are just .3 of 1% of our Total Workforce.
You folks aren't focusing on the right and important news---ReplyDelete
December 5, 2008
Boy George found guilty of false imprisonment for chaining male escort
Boy George claimed that he chained up the Norwegian because he believed the escort has broken into his computer
Adam Fresco, Crime Correspondent
Boy George is facing jail after being convicted today of handcuffing a male escort to his bed and beating him with a metal chain as he tried to flee after a naked photo shoot.
Although the singer, tried under his real name, George O’Dowd, 46, did not give evidence he told police that he had chained Norwegian Audun Carlsen to his bed in his flat in Shoreditch, East London, in April last year while he investigated alleged tampering with his computer.
The pair first met in April last year through a social networking site primarily for gay and bisexual men and even though O’Dowd suspected Mr Carlsen had hacked into his computer they parted on good terms. The singer paid the younger man £300 of the £400 they had agreed.
In the next few weeks they exchanged e-mails in which the singer accused Mr Carlsen of breaking into his computer system but then said that he would be “perfectly happy to see you naked asap”. He referred to Mr Carlsen’s “heavenly butt” and eventually they agreed to meet for a second time.
And, OJ gets sentenced today. Very least he can get is 6 years, might get life.
Also, going unremarked-upon is that Incomes were up .4% in Nov.ReplyDelete
If you've never been to fark.com for your daily news, and "news," round up, bob, you might appreciate it. My mother and her coterie do.ReplyDelete
That's a hell of a plant. I think Honda has similar capabilities in their US plant(s?)ReplyDelete
Fark.com--I've found my true home at last.ReplyDelete
The US Supreme Court received 1 million 2 hundred thousand letters today in support of Leo Donofrio.
And, not one will be read by any Justice.ReplyDelete
Catching up with bob and linearthinker, The Father Of Anthropogenic Global Warming Comes Out In Favor Of Nuclear PowerReplyDelete
Thanks for those articles trish!ReplyDelete
The problem with getting the exporting countries to amp up their demand is that it is beyond our control. We can jawbone them but we can't "do" it so we are left with the option of trying to do something. It seems our only option is to print up money and give it to folk to pay off their 'loans' - to de-lever. There is so much debt and we lack a mechanism to pay it all off we seem to be only left with the option of pouring in the top at circumscribed locations and hope for the best. Hail Mary passes.
"All in all, the various players (you know who they are) should all be pistol-whipped - Nay, taken out back and shot) for getting us into this mess;"
Do we rally know who "they" are? I'd suggest the blame deserves to be spread far and wide but, yeah, if you shoot most Americans you'll have struck at a lot of those to blame. Heck, you wanna start pointing fingers take a look at the Newt video a few threads back and shoot that bugger for his liberal use of the 'truth'.
The auto industry baillout is going to be hard to structure, especially in the short time period available.ReplyDelete
Taxpayers forced to bail out losers is not the way to go. The new economy is going to be the Green Economy. This is where the jobs will be, this is where innovation will be, this is where cheap energy and energy independence will be.
GM has not created any new jobs in decades. GM has stole from the taxpayers untold billions in tax credits. GM is the problem, not the solution. GM should not be bailed out.
The irony is, Mat, you just advocate that the government bet on a different horse. A further irony is that many who advocate a government bailout of the Auto industry are more like you than you'd care to admit - they want to turn GM et al into a Green company.ReplyDelete
"The problem with getting the exporting countries to amp up their demand is that it is beyond our control."ReplyDelete
First and last rule of international relations: Sovereign nations act that way.
This is not to say that interests don't coincide.
The Chinese Gov recently approved a ginormous stimulus package aimed at spurring domestic consumption in response to falling demand for China's exports. I think add-ons are on the way.
For the bankers, $350 billion so far, with not a word of management changes at the Banks. For the auto companies, a loan of $35 billion is requested, because their normal credit lines have dried up, and lo and behold ...
Paychecks are not so important, as they were during the first phase of the 'credit crisis'.
Humorous, to be sure.
But those making the loans, not even buying preferred equities, as done for the banks, want to dictate management policies, at the auto companies.
Still waiting for the first full sized lithium battery. The vechiles the Army was forced to buy, still lead/acid cells. Not an economical route, for the Army.
Good for the PR, gives them a few new bumpers, for their stickers.
I'm not saying they shouldn't do it, nor try to get the Chinese to do it it's just that a POTUS/Congress can't 'do it'. They can write checks to Auto companies, Banks.... well, I guess they could write checks to China...ReplyDelete
...they did already, sorta, through Bank of America...
Anyway, once China's been 'stimulated' we gotta have something for them to buy aside from our wonderful financial products.
The government is going to bet on a horse, regardless.
Here you go, ash:ReplyDelete
No, I don't think they need necessarily pick a horse to saddle up with cash, rather, they can set up rules and regulations to favor certain breeds of horses.ReplyDelete
With the Auto companies, for example, they can let them go into Chapter 11 while guaranteeing the existing accounts payable to mitigate the cascading bankruptcy problems evolving out of non-payments. They can set target fuel efficiencies without directly giving companies money. It is quite absurd that they should contemplate telling the Big 3 that they can't make S.U.V.'s and, by extension, that folk can't buy SUV's.
We certainly seem to be getting a load of folks trying to dictate how individual business should act as opposed to regulating the environment in which they act.
Cool Trish! I'm struck by how much "Waste and Scrap" they buy. I've got a bunch of that lying about, hmmm....ReplyDelete
Gas price: EPA explores tax on livestock emissionsReplyDelete
This comment has been removed by the author.ReplyDelete
No, I don't think they need necessarily pick a horse to saddle up with cash, rather, they can set up rules and regulations to favor certain breeds of horses.ReplyDelete
It's essentially the same thing. That's what's meant by the Green Economy. Anyway, the reason I focus on GM is because the company is so flagrantly out of alignment, in so many aspects, that it really is a case study in clusterfsck management.
Why not a crash government program to engineer safe-emission livestock? We went to the moon, for crying out loud!ReplyDelete
Better yet to regulate the methane emissions of said livestock to facilitate the production of livestock butt balloons that handily fit in the gas compartment of your (regulated) methane powered vehicle.ReplyDelete
OJ gets 15, and doesn't look happy.ReplyDelete
Here is Gov (commerce secretary elect)Bill Richardson saying in Spanish that Obama is an "immigrant." (So he understands understands "immigrant" issues.)ReplyDelete
You've heard people say "do not listen to what Israelis or Palestinians say in English. Listen to what they say in Hebrew and Arabic.
I wonder if the same rule applies here.
Here is the Kenyan Ambassador saying that Obama is born in Kenya.ReplyDelete
Does this mean Ann Margaret isn't coming?ReplyDelete
I am in Transportation and Logistics (ltl Trucking specifically). Here is what has been reported in this industry in the last 5 weeks:ReplyDelete
YRC--Yellow/Roadway- merging and consolidating service centers and laying off 9600 personnel (mostly Teamsters). Teamsters agree to 10%wage concession.
Saia Motor Freight-450 employees, 90% dock workers and drivers laid off several weeks ago. 400 more today.
Conway Trucking--top execs losing jobs including VPs and one Senior VP. 3500 dock workers and drivers being laid off immediately.
It's getting ugly.
UAW's gonna to take America down.ReplyDelete
jeez, Mat, you expect me to drive around in that?ReplyDelete
Obamer Is An Englishman
Well, looks like we won't know what happened until Monday.
For a family of six, you'd have to have three of those little cars, and three people with driver's licenses. Convoy.ReplyDelete
Still, now there is speculation that gasoline prices could fall below $1 dollar a gallon if crude oil were to plunge below $25. That's music to the ears of motorist Elizabeth Jappelle, on her way to Riverhead when CBS 2 caught up with her.ReplyDelete
"It's wonderful! I mean I can't believe it," she said.
Energy analysts predict declining oil prices could, in theory, help the struggling automakers. As prices at the pump continue to fall, Americans may become more willing to buy cars.
Gas Prices Still Up
You might be able to tie Grandma on top, like in "Vacation", on the way to Wally World, though Grandma was deceased, in the movie.ReplyDelete
Just got back from the Tattoo Parlor with my new Butterfly tat.ReplyDelete
Methuselah: The big problem is the yearly $1.4 trillion in welfare spending that the military mafia extracts from US taxpayers. That needs to end.ReplyDelete
I don' know nothin' bout no military mafia. Da military mafia is a myth! Oh! I was in da olive oil buisness with Vito Corleone, but that was a long time ago! I got my own family Senator!
In an advertisement set to run Dec. 8 in the trade publication Automotive News, GM said it had “disappointed” Americans in recent years with its vehicle quality, design and reliance on trucks over cars. “We have paid dearly for these decisions” and are restructuring to be “viable for the long term” the ad said.ReplyDelete
Credit-default swaps on GM bonds rose 2.8 percentage points to 82 percent upfront and 5 percent a year, CMA Datavision prices show. That means it costs $8.2 million in advance and $500,000 annually to protect $10 million of GM bonds from default for five years.
Credit-default swaps on Ford bonds rose 1.3 percentage points to 72 percent upfront and 5 percent a year.
Congress to Consider
bob, that is where we put the hay bale and the duffle bag, on top of the terrorist, I mean Tango.ReplyDelete
hmmmm, I'm interested in seeing what other tatoos you may have hidden around:)ReplyDelete
However, that started changing in 2006 but by that time the Taliban had entrenched themselves in the Frontier provinces and Swat area of Pakistan.ReplyDelete
The two also say the concept of "pressuring" Pakistan is flawed. "No state can be successfully pressured into acts it considers suicidal.
The Pakistani security establishment believes that it faces both a US-Indian-Afghan alliance and a separate Iranian-Russian alliance, each aimed at undermining Pakistani influence in Afghanistan and even dismembering the Pakistani state."
Planned Parenthood Hides RapeReplyDelete
The answer is yes, there is a downside. Even though amounts this large inevitably seem like toy money, it's a real trillion dollars we are talking about spending.ReplyDelete
Even if we spend the money wisely (on bridges to somewhere), we or future generations will still have to pay it off, with interest. Or, more likely, we will inflate it away, along with the life savings of those who were foolish enough to save all their lives.
It's just that the downside of doing nothing is worse. It's an easy choice, I guess.
Pump it Up
It's an especially busy Friday night at the synagogue on the corner. Check your Jewish calendar.ReplyDelete
Monday's a holiday here. Not a clue what *this one* might be. I've just come to think of them as Colombia Mondays.
In other news: Peggy Noonan and friend take a drive through the military mafia enclave of NoVa and comment that Homeland (as in Department of...Security) needs a name change. I suggest Heartland - getting the point across that we elitists can just go fuck ourselves
And my son made me watch Full Metal Jacket with him last weekend. Explain the appeal.
He did not return the favor by watching Desk Set with me.
From Brad DeLong:ReplyDelete
Defining Depression Down? Up?
Real Time Economics: Defining Depression: Friday’s dismal November jobs report brings the old joke to mind: A recession is when your neighbor loses his job, a depression is when you lose yours. The truth is that there is no good rule of thumb for a depression, like the two quarters of consecutive GDP declines that many people use for a recession. And unlike recessions, which are semi-officially declared by the National Bureau of Economic Research’s business cycle dating committee, there’s no arbiter to say that an economy has fallen so hard it’s in a depression.
In the old days, what we now call recessions used to be called depressions. The word recession only came into common use after the Great Depression, in order to distinguish garden-variety downturns from that epic crash. Sort of like the World Meteorological Association retiring a devastating hurricane’s name. That said, with the economy in the midst of what may be its worst downturn in the postwar period, it is worth thinking about what it would take to dust off the “depression” moniker.
Richard Sylla, an economic historian at New York University, says that his rule of thumb for a depression would be double-digit unemployment rates lasting for more than a few months. The only times that occurred in the U.S. were during the Great Depression and the 1890s. The deep recession that ended in 1982 briefly saw unemployment rise above 10%. Berkeley economic historian Brad DeLong’s definition of a depression is in a similar vein: Unemployment hits 12%, or it stays above 10% for three years. Rutgers economic historian Michael Bordo says he would define a depression “as a sustained decline in output of 2 or more years of at least 10% per year. If you look at U.S. history we only really had one such event.” –Justin Lahart
Noted elsewhere: CNBC has come up with the term The Great Recession. It's good copy anyway.
And...Andrew responds to John Hood at The Corner:ReplyDelete
We're From The Government... [Andrew Stuttaford]
John, apologies for saying so after your kind words, but we disagree. While some of our troubles are indeed the result of a 'normal' cyclical boom-and-bust, I think that it's reasonable to argue that the way that the malign effects of the housing bubble were intensified by the derivatives that had helped stimulate it, transformed this crisis into something profoundly different, a mess of a magnitude that could well have brought down large pieces of our financial infrastructure with, I would add, unknowable (but probably disastrous) consequences to our politics as much as our economics. As to why that was, the answer lies in a wide range of factors ranging from the sheer scale of the problem, to catastrophic regulatory failure, to the interconnectedness of the banking (and shadow banking) system, to hamfisted government intervention in the past, to very fundamental mispricings of risk, well, I could go on...
You argue that the economic panic was generated largely by the political panic, but I see little evidence of that. The economic panic had been slouching our way for a long, long time (I wish I'd paid attention to Prof. Roubini long before I did), as the increasing agitation of the markets over the last year was revealing so clearly. You might not have agreed with the decision to rescue Bear Stearns, but it's very obvious to me that if that firm had been allowed to go under, there would have been a panic no less, and possibly greater, than we saw in September/October, a panic that was, of course, formally triggered by the government's decision not to bail out Lehman.
Have the administration's actions since the collapse of Lehman made matters better or worse? On balance, I'd argue that they have made things better than they would otherwise have been, although I agree with you that some of the hesitation, doubling back, and uncertainty has certainly done its bit to hit confidence. In a way, that was inevitable (confronted with problems of such complexity there was bound to be an element of make-it-up-as-you-go-along), and in a way it reflected political realities. For example, I'd have preferrred direct equity investment in the banks from the start, but confronted by a House in which at least one GOP congressman compared TARP to Bolshevism, that was probably never doable. Perhaps too the administration had to look into the abyss befire taking such an ideologically uncomfortable step.
Finally, there's the issue of recessions and government causation. Again we may have to disagree, but your references to the desirability (or not) of both fiat money and central banks suggest to me that that is a discussion too long for the Corner!
12/05 06:13 PM
7. Economics. a period during which business, employment, and stock-market values decline severely or remain at a very low level of activity.
A proposed definition for depression is a sustained recessionary period in which the population is forced to dispose of tangible assets to fund every day living, as was seen in the US and in Germany in the 1930s.
Paulson, of course, continues to preside over the billions-going-on-trillions that will be made available to whatever industries make the best case for a hand-out. You might recall that the Treasury secretary came to Washington after heading up Goldman Sachs, a firm now reporting billions in losses after abandoning its business model in favor of status as a government-sheltered commercial bank.ReplyDelete
Nothing more clearly demonstrates the shift of power from Wall Street to Washington than the Paulson saga. Once the man who raised private-sector funds for private-sector businesses from his perch at Goldman, he is now the man who distributes taxpayer funds to private-sector businesses from his perch at the Treasury.
Still, not all is gloom and doom. This ex-New Yorker still thrills at the sight of the Christmas tree being lit in Rockefeller Center, gas prices are well below $2, and the vast majority of Americans have jobs and are on time with their mortgage payments.
A grand jury in Washington, D.C., has indicted at least five people who worked for security contractor Blackwater Worldwide for their role in a shooting incident in Baghdad in 2007.ReplyDelete
On Sept. 16, 2007, a convoy of Blackwater SUVs entered a traffic circle. A short time later, shooting started.
The incident prompted concerns in Iraq and elsewhere that no one would be held accountable. A gray area in Iraqi law raised the possibility that Blackwater might have immunity from prosecution.
Sadly, congressional concern is less about the well-being and endurance of the companies and their workers per se than it is about keeping those companies afloat to serve their own political objectives. Half the congressional Democratic caucus wants to compel the automakers to pump out green cars, regardless of the fact that they are money losers for Detroit.ReplyDelete
They're still too expensive to produce, and Americans are even less keen on consuming them as gas prices continue to plummet.
The other half of the caucus is mindful that its biggest benefactor is Big Labor, which is opposed to the only fiscally responsible and realistic option for the failing automakers: Chapter 11 bankruptcy. Big Labor knows that a bankruptcy judge would attach the most important string of all, which is to cut operating costs immediately.
Asking for Money
RUSH: I really am, I'm so sad today, which is odd because we're in the middle of a sitcom here, folks. Every story, every sound bite is just hilarious, and the reason I'm sad is that I can't laugh at it because if I start laughing, I get into a coughing spasm, and I don't want to do that.ReplyDelete
JOHNNY DONOVAN: Live from the Southern Command in sunny south Florida via New York City, it's Open Line Friday!
RUSH: And that means when we go to the phones, the content of the program is all yours. Monday through Thursday, this program is about what I care about exclusively, but on Friday, we open it up, and whatever you basically want to say is fair game.
Some employees say they have had to cut back on costly prescription drugs. Ms. Esbenshade, the cookie packer who had her gallbladder removed, says she didn't buy her six-year-old daughter's asthma medicine after Archway closed, because she lacked $100 to pay for it.ReplyDelete
They have since received a state-issued medical card to help cover the cost of the medicine.
Darlene Miller, a 57-year-old packer, no longer has insurance to cover $300 a month for medications for high blood pressure, thyroid problems and a heart condition. So she is cutting each pill in half.
Health Plans for Workers
Haven't read it yet.
As Washington obsesses with the drip feed of cabinet appointments by President-elect Obama and nervously charts movements for a glimmer of optimism on the financial crisis, the terrorist attacks in Mumbai have thrust foreign affairs back into the headlines. Both President Bush and President-elect Obama issued strong condemnations of the attacks and promised vigorous action against terrorism.ReplyDelete
These statements underline a core continuity between the current and future Administrations. Obama will be no less attentive on this front than Bush.
The retention of Defense Secretary Gates at the Pentagon is another sign that there will be no absolute break with the Bush Administration. However, foreign policy advisers to Obama state that the scope for change remains significant.
This Friday, the movie Frost/Nixon — directed by Ron Howard and adapted from a play by Peter Morgan — opens in “selected theaters.” In case you’ve somehow missed all the hype, it’s about the British talk-show host David Frost’s series of interviews with Richard Nixon, which were shown on American television in May 1977. To quote from the film’s website:ReplyDelete
More than 45 million viewers hungry for a glimpse into the mind of their disgraced former commander in chief — and anxious for him to acknowledge the abuses of power that led to his resignation — sat transfixed as Nixon and Frost sparred in a riveting verbal boxing match over the course of four evenings. Two men with everything to prove knew only one could come out a winner.
All this comes as a surprise to those of us who remember watching the original broadcast of the interviews. In return for his $600,000 appearance fee, Nixon “admitted” what had already been proven; dodged or rationalized inconvenient facts; acknowledged errors but denied committing any crimes; and ended with a show of contrition and a play for sympathy. Little or no new information was uncovered, and nobody who had followed Nixon’s career was surprised in the least by his manipulations and evasions.
HISTORICAL ANALOGIES have beenReplyDelete
much in vogue since this election. Are we living at the end of 1932, preparing to
face the glories and disasters of a
revived New Deal?
In 1976, liberals were wrong on multiple counts, and all the signs point to them
repeating the same mistakes. Even if
Obama plays Mr. Moderate, the congressional
party contains more than enough
take-no-prisoners far leftists to torpedo
any chance of bipartisanship or restraint.
The more strenuously liberals press for gay equality in matters involving youth, in
marriage and adoption, the more they will
generate a child-protection reaction, even
among people who consider themselves
socially liberal, and the more likely this
reaction is to take religious forms. Following
the recent California referendum,
Mormons bore the brunt of liberal fury,
and Catholics and other religious groups
will face legal challenges for refusing to
participate in gay adoptions and marriages.
Spirit of '76
The latest strike came amid growing tension between nuclear-armed Pakistan and India over Mumbai attack.ReplyDelete
India has blamed militants based in Pakistan for the attacks on two luxury hotels, a railway station and a Jewish centre in its financial capital last week that killed at least 171 people.
Pakistan has condemned Mumbai attack and promised full cooperation in investigations but senior security officials have threatened that they would pull out troops from the tribal areas and the western borders with Afghanistan and shift them to eastern borders if situation worsened with India.
Killed 3 in Pakistan
Caroline Kennedy is easily the most famous contender for Clinton's Senate seat, but there are plenty of others. New York Attorney General Andrew Cuomo is widely known in the state.ReplyDelete
Paterson could also pick Buffalo Mayor Byron Brown or Nassau County Executive Tom Suozzi.
There are also a number of House members in the running, including Reps. Carolyn Maloney, Kirsten Gillibrand, Steve Israel, Brian Higgins, Nydia Velazquez and Jerrold Nadler.
jeez, Mat, you expect me to drive around in that?ReplyDelete
Only if you feel like embarrassing the guy in the Ferrari. :)
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