“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."

Saturday, October 03, 2009

In the wake of the financial crisis or in the middle of one?

The latest news this weekend is: Regulators close banks in Colorado, Michigan and Minnesota.

Ninety-eight banks have failed so far this year as losses have mounted on commercial real estate and other soured loans in the wake of the financial crisis and the recession that has gripped the economy. The failures have cost the fund that insures bank deposits about $25 billion, the FDIC said Tuesday.

The fund has been so sapped by the wave of collapsing banks that it now has fallen into the red. The FDIC now expects the cost of bank failures to grow to about $100 billion over the next four years — up from an estimate of $70 billion made in the spring. Most of the $100 billion in costs are expected to come from failures this year and next.
This is what the International Monetary Fund says about the global recovery:

Beyond 2010

Sustaining healthy growth over the medium run will depend critically on addressing the supply disruptions generated by the crisis and rebalancing the global pattern of demand.

To complement supply-side efforts, there must also be adjustments in the pattern of global demand. Specifically, many economies that have followed export-led growth strategies and have run current account surpluses will need to rely more on domestic demand and imports. This will help offset subdued domestic demand in economies that have typically run current account deficits and have experienced asset price (stock or housing) busts, including the United States, United Kingdom, parts of the euro area, and many emerging European economies.

To accommodate demand-side shifts, there will need to be changes on the supply side. This will require actions on many fronts, including measures to repair financial systems, improve corporate governance and financial intermediation, support public investment, and reform social safety nets to lower precautionary saving.

They're talking about a major restructuring of the way the whirled does business. This could take a lifetime, especially if the lords and rulers try to force one failed change after another. There has been talk lately of how Roosevelt's interventions prolonged the Great Depression. I don't how valid those arguments are but the market is organic and has developed over time despite the interventions of governments. Time heals all wounds.


  1. And there we were, on the other thread, having a perfectly marvelous time assiduously ignoring all serious discussion.

    What kind of shit is this for the severely hungover, whit?

  2. And I did indeed nod in agreement to the charming Scot for fucking HOURS last night. So whatever ends up in his notes, I say again: Don't send those guys out without a translator.

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  5. We're on back end of the "financial" crisis, but the front end of a serious, multi-year (possibly decadal) Recession.

    Although more banks will fall, the System" will stand. Consumers/taxpayers, however, are in for rough sledding. There is not enough "Flow" from current, or anticipated oil fields to return us to pre-2008 levels of consumption.

  6. Fly on the wall?

    Here's how it usually goes at some point:

    "So. What do you REALLY think of the Obama administration?"

    To self: Mmmmmmm, what do you wish I think?

  7. The fly watches the chameleon.

  8. Thanks, Trish, sometimes you need to let your guard and indulge. That seems a little hard around here.

  9. Yet another scientific scandal has come to light which knocks another whopping crater in the already shattered theory of anthropogenic global warming. Eight peer-reviewed studies, which for years have played a significant supporting role behind the IPPC’s claims of AGW, have been shown to be fraudulent. ....

    This dataset gained favour, curiously superseding a newer and larger data set from nearby. The older Yamal trees indicated pronounced and dramatic uptick in temperatures.

    How could this be? Scientists have ensured much of the measurement data used in the reconstructions remains a secret -- failing to fulfill procedures to archive the raw data. Without the raw data, other scientists could not reproduce the results. The most prestigious peer reviewed journals, including Nature and Science, were reluctant to demand the data from contributors. Until now, that is.

    Rest of the article in The Spectator - The Great Global Warming Scam

  10. Or as Jon Stewart said: "We lost. It's supposed to taste like a shit taco."

    Not like we really give a damn about the Olympics and its host country festival of weird.

  11. I will say congratulations to South America. Truly. (The Brazilians, the world's second-most obnoxious soccer fans, don't need encouragement).

  12. The Spectator - The Great Global Warming Scam.

    Great find, Rufus. Thanks.

  13. "Although more banks will fall, the System" will stand.

    Although more banks will fall, the System" will stand. Consumers/taxpayers, however, are in for rough sledding. There is not enough "Flow" from current, or anticipated oil fields to return us to pre-2008 levels of consumption., however, are in for rough sledding.
    There is not enough "Flow" from current, or anticipated oil fields to return us to pre-2008 levels of consumption.
    That's a safe bet, given that
    "the Govt" taketh from Consumers/taxpayers,
    and giveth to "the System."
    ...over, and over, and over.
    The Crusade for Cronies.

  14. Ford F-150 Wins Again

    The September sales numbers are in, and once again, the Ford F-150 full-size pickup truck is the bestselling vehicle in the U.S.

    What’s interesting about the figures is that the F-150’s numbers are actually up a modest 3.5 percent over last year—while every other vehicle in the top 10 is down, some significantly.

    Ford actually sold over 10,000 more F-150s in September than its closest competitor, Chevy, with the Silverado.

    This would indicate that there’s a flight to quality in the truck market, and that folks who are buying a pickup, are buying the reputation of the F-150.

    It hasn’t been the bestselling vehicle in the U.S. for 28 straight years for nothing.

  15. Rufus,

    The cap and trade legislation being pushed through congress is the one that really scares me. The reputations (and jobs) of too many "scientists" are tied to this scam for them to let it go down without a fight to the death. Tie to that the billions to be made by policymakers in D.C. and the opportunists worldwide willing to jump in and take the free money associated with this GW scheme and you have a truly toxic brew.

    The little guy has very little chance when you have all the players sitting there ready to "dip their beaks."

    Gore's Inconvenient Loot

  16. Big Business loves Cap and Trade.
    Small businesses die.

  17. By the way, you might want to stay away from them Chicago Commodity Carbon Credits. They've gone from $7.00 ton, last year, to $0.10 ton, day before yesterday.

  18. I don't think they'll be able to get the "Crap, and Tirade" deal through, Q.

    Diane Feinstein, and the Big Utilities would like it, but I don't think it will happen.

    (Of course, people might just be too worn out from the Health Insurance Debacle to fight it.) :(

  19. The reason it bothers me is the potentially $ trillions involved. It's just too much money for these guys to resist. If they get started on this thing it could roll for decades.

    You know the tactics they will use once it starts. If temperatures stay the same (or decrease as in the last decade) it will be because of cap and trade. If they go up, it will be because we didn't start quick enough or spend enough.

    We've already seen this kind of rationaization with the stimulus issue and all the jobs they have "saved".

  20. Oh, I agree, Q. It's a, potentially, horrific blow to the economy. I, really, believe it's a bigger danger than a "bad" healthcare plan, by far. At least, if they screw up the healthcare deal, at least, "someone" will get some insurance coverage.

    It's hard to find the "clean end" of the crap and trade nightmare.

  21. to mix a metaphor

  22. Ok, now mix a Margarita.

  23. Here's the, just released, draft of the Copenhagen Climate Treaty

    I think it boils down to, "we shut down our economy, and give all our money to Tuvalu," or something.

  24. Hesiod's Theogony (116ff) tells how, after Chaos, arose broad-breasted Gaia the everlasting foundation of the gods of Olympus. She brought forth Uranus, the starry sky, her equal, to cover her, the hills, and the fruitless deep of the Sea, Pontus, "without sweet union of love," out of her own self through parthenogenesis.

    But afterwards, as Hesiod tells it, she lay with her son, Uranus, and bore the World-Ocean Oceanus, Coeus and Crius and the Titans Hyperion and Iapetus, Theia and Rhea, Themis, Mnemosyne, and Phoebe of the golden crown, and lovely Tethys.

    "After them was born Cronus the wily, youngest and most terrible of her children, and he hated his lusty sire."

    Hesiod mentions Gaia's further offspring conceived with Uranus: first the giant one-eyed Cyclopes: Brontes ("thunderer"), Sterodes ("lightning") and the "bright" Arges: "Strength and might and craft were in their works."

    Then he adds the three terrible hundred-handed sons of Earth and Heaven, the Hecatonchires: Cottus, Briareos and Gyges, each with fifty heads.

    Uranus hid the Hecatonchires and the Cyclopes in Tartarus so that they would not see the light, rejoicing in this evil doing.

  25. Then I understand she copulated with Cronus and bore Algore.

  26. That Ocean "Acidification" thingie seems to be a bunch of bull, also. Ocean Acidity Fraud

  27. When the full truth of this climate change scam comes to light, a generation of young people will lose faith and confidence in science.

  28. Here's another EB post from the archives:

    Sandinistas and Democrats

  29. We warned the Republican Party in 2006
    Deep, Wide and Repeatedly

  30. Been pretty much ahead of the curve, huh?

  31. I saw one post back in the archive where Deuce had found a news article about Russia and Georgia and warned that something was up.

    Wish I could find it. It must have been back in 2007.

  32. Well, here's a juicey bit of gossip. I read, somewhere, that Netanyahu gave Putin a list of Russian Technicians (scientists?) working at the Iranian Nuclear Facilities.

  33. That doesn't surprise me. I read some time back that after the fall of the Soviet Union, Russian scientists had gone all over the world seeking work.

  34. Some Russians went to Isreal, some went to Iran. Six of one, half dozen of the other, from the "technicians" perspective.

    Lots of Russian emigres in that region of the world, aren't there?

  35. Eight U.S. Troops Dead in Bold Attack in Afghanistan

    Groups of tribal militia attacked two American outposts in eastern Afghanistan, the military said, in the deadliest battle for U.S. troops in months.