Do you know who Nouriel Roubini is? They call him Doctor Doom guess they can't handle the truth. My personal philosophy may be somewhat similar to his in that I try to prepare for the worse all the while hoping for the best. I just think that way you've got it covered and if things are not as disastrous as you think they may be Great Happy Days are Here Again. Well I, like Doctor Doom do not see the Happy Days anytime soon. Brown is begging US to save the world!
The U.S. Financial System Is Effectively Insolvent
Nouriel Roubini, 03.05.09, 12:01 AM EST
There is a grave risk of a global L-shaped depression.
For those who argue that the rate of growth of economic activity is turning positive--that economies are contracting but at a slower rate than in the fourth quarter of 2008--the latest data don't confirm this relative optimism. In 2008's fourth quarter, gross domestic product fell by about 6% in the U.S., 6% in the euro zone, 8% in Germany, 12% in Japan, 16% in Singapore and 20% in South Korea. So things are even more awful in Europe and Asia than in the U.S.
There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession. Here's why:
I will let Doctor Doom explain that to you and move on to The Market Ticker Guy who has this to add and Holy Hannah you really have to read it all I am just giving you some of the Juicy parts...
It would appear that our fine "politicians" have no intention of removing (or even tempering) any part of The Bezzle in our financial system.
As a consequence, the market will do it for us.
The bad news is that we've chained our ship to Europe, and they're in bigger trouble in this regard than we are:
Bernanke, without the consent of Congress, has essentially guaranteed this rollover capacity through his provision of what amount to unlimited "swap lines" with the Europeans and others.
Nor does The Fed seem to think that it has to comply with the law:
Congress, of course, could repeal The Federal Reserve Act. What they will do instead is chuckle in the face of lawlessness. Count on it.
We've already seen 20% or more losses in pension funds - both public and private. Those losses will exceed 50% within the next six months at the rate we're going, at which point current cash flow will be insufficient to pay benefits; eating the "seed corn" will be the only possible choice, which in turn makes recovery impossible. If you have a pension either now or due to you in the future, write it off, because barring immediate action out of Washington DC to remove The Bezzle, it is gone with certainty.
I'm not quite sure where Obama's administration thinks it's going to collect their proposed "tax increases" from. After all, you only pay taxes on wages and profits, not lack of earnings and losses.
Unemployed, homeless and hungry people don't pay many taxes. They do, however, get rather desperate rather quickly, and that desperation usually is expressed through lawlessness of various sorts, with some of it truly frightening. The political types may want to do a bit of basic math and figure out what they think they will do with a 20% unemployment rate should they come to the (proper) conclusion that Washington DC's intransigence and complicity is, in the majority, responsible for their suffering.
Absent meaningful change in the near term we are headed straight for a Depression far worse than the 1930s, with the only means available to stop it being an immediate halt to The Bezzle throughout the system, including most especially in Washington DC.
YIKES! He sounds more like Doctor Doom than Doctor Doom. You really must read it all to understand the depth of our problems. The FDIC has said there's not enough money, Ford who many thought would be weathering the storm is not really, GM forget about it. Our Food Supply is a whole other story. Later today Tax Cheat Timmy said in a press release he will tell you all the government spending will reduce every one's standard of living but what he won't tell you is by how much! If you follow my links you will understand America is now The Night Of The Living Dead.
What's Dead (Short Answer: All Of It). I wonder if Ben has the Helicopter ready??
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”