Monday, May 25, 2009

Not Good. Not Good At All

Holiday is over folks. Hope you enjoyed it. Time to get back down to business. Sadly things did not magically improve over the weekend. The best news is that "O"binhood signed a bill that will halt "No Notice Evictions" in which tenants are give is little as 15 minutes to leave, with nowhere to go, and nowhere to put their belongings. This is a pretty sad story that actually got better. Very unusual for these days and times.

Now to the bad news (which today is considered good news by CNBS. Listen for the spin machine to turn these stories into feel good hallelujah situations). Lets start with a post by Mish addressing Jobless Graduates Face Dismal Jobs Market. Mish summarizes, "Graduates hoping to become Wall Street wunderkinds or commercial real estate tycoons better be thinking about Plan B. Other than those with specialties in bankruptcy, the Plan A jobs simply are not there. Moreover, those who waste too much time pursuing jobs that are not available are likely to end up in Plan C, working at Starbucks."

Nouriel Roubini (in a must read IMO - I could have done a whole P3 post on this) is telling us "Don't Believe The Optimists" in this post from Forbes. Nouriel says,"According to the consensus, the recession will be (1) over by the middle of 2009 (i.e., in a month or so); (2) positive growth will return by Q3 and be as high as 2% by Q4; and (3) the recovery of growth in 2010 and beyond will be rapid, sustained and close to potential growth, with no risk of another economic downturn. All three elements of the new optimistic consensus are flawed." in a wonderful article that should scare the hell out of all of us, but I get some strange satisfation from.

Now let's have some fun. Tyler at Zero Hedge does a great job keeping up with David Roesnberg's updates. In David Rosenberg: "600-840 On The S&P" Tyler's conclusion goes like this, "Putting it all together: $50-70 in S&P mid cycle earnings, slap on 12x and you get 600 - 840 as a sensible S&P500 target. As Rosie concludes: "we know what the range of outcomes can look like: 600 to 840 on the S&P 500. On March 9th, there was much more upside; today at 892, quite the opposite."

And to put the cherry on top, no well rounded post would be complete these days without a little discussion of impending socialism. Zero Hedge has a nice vid on Geitner denying that every American taxpayer is getting it in the end. Geithner Dismisses GOP Socialism Charge as 'Ridiculous'.

Well, how's that for a welcome back post from the holiday weekend. Folks, the red alert is still alive and well and I plan on continuing to sound the alarm. Good luck this week. I'll be vacationing in NYC this week with the family, but I'll try to do some work and get a few posts out while there.


  1. Hi Shanky,

    I hope you had a satisfying and rejuvenating holiday weekend with your loved ones (and your adorable new puppies).

    I have to ask you, though, since President Obama did A VERY GOOD THING by stopping "no notice, immediate evictions" (presumably done by cruel and inhumane banks or landlords) -- shouldn't you give Obama more praise and appreciation, to balance the "rap" on him a bit (which has been, it seems to me, overly critical for his first four months in office)?

    Don't get me wrong: I'm very critical of Obama (and Geithner, Bernake, Summers, Bair, and the banksters) too. I even spent 2 or 3 hours talking to my father just last night about my anger and fears about the eventual consequences of Obama's decision to CONTINUE the Bush-Paulson-Bernake-Bair approach of bailiing out the bad guys in the short run and of sacrificing the taxpayers for decades to come.

    But given the American tradition and taboo against "nationalizing" and "breaking up" bad banks that are "too big to fail"...AND given the overwhelming power that Wall Street banks and financial companies have over EVERY President and Congress...AND given the partisan politics of BOTH political much, really, realistically, do you think Obama could have done differently?

    The fact that Obama's personnel and policy choices are basically THE SAME as Bush's suggest to me that McCain and the Republicans would have done much THE SAME as Obama and the Democrats have done. Furthermore, I have not seen ANY credible, comprehensive alternative solutions to this bankster-caused crisis provided by the critics of Obama on the right. (I've seen alternatives suggested on the left by Stiglitz, Krugman, and Roubini, etc.) And lastly, I've read several economic experts, left AND right, who AGREE WITH OBAMA's approach to bail out the banks and stimulate the economy by deficit spending -- as the best solution to a bad situation (that Obama inherited, but did not create).

    So -- with sincere respect -- don't you think that ANYONE who criticizes Obama (and the White House and Congress) -- and calls him/them disparaging NAMES (which I see EVERYWHERE) -- has a RESPONSIBILITY to do the following FIRST:

    1) STATE, honestly and fairly what, realistically and specifically, Obama could and should have done differently than he has actually done.

    2) STATE realistically and specifically what McCain and the Republicans in Congress would do differently than what Obama (and Bush!) have done.

    3) STATE what the Obama critic PERSONALLY would, realistically and specifically, do differently than what Obama (and Bush) have done.

    In my opinion, unless ANYONE (including myself!) does these THREE things FIRST, their name-calling and disparaging of Obama, the White House, and Congress just plain FAILS to be intellectually credible, honest, or fair.

    I'm open to your and others' opinions on this.

  2. I'd like to add these final two points:

    1) IF Obama had decided NOT to bail out the bad-guy bankrupt banksters, and had instead "nationalized" AIG and Citigroup etc. and put them into receivership, sold the good parts back into the private market, and taken 5 to 10 years to rehabilitate and resell the toxic parts -- the right wing in America would have REALLY FREAKED OUT and called Obama a "Socialist"! (That is, the right-wing will call Obama names NO MATTER WHAT he does.)

    2) The right-wing's HEROES and standard-setters (like Reagan and Cheney) always said that "Deficits don't matter." But when Obama uses textbook deficit spending to fix the self-destructed financial system and stimulate the economy out of a severe recession, the right-wing FREAKS OUT and complains in a FURY that now "Deficits DO mattrer!"

    I guess right-wingers think deficits are OK when deficit spending is done by Reagan, Bush, and the Repuublican Congress, but that deficits are not OK when done by Obama and the Democrat Congress.

    And I guess right-wingers think deficits are OK when deficit spending is done for an unnecessary, immoral, untaxed war based on lies, and for tax cuts for the rich that the rich don't need or deserve...but that deficits are not OK when deficit spending is used to save and repair the self-wounded financial system that our economy (and our jobs) cannot function without, and to stimulate our economy out of a severe and prolonged recession.

    In sum, it seems to me that the right-wing holds hypocritical double-standards...and that they criticize Obama and the Democrats no matter what he does...but the right-wing has no credible and comprehensive alternative solution of their own.

    No wonder extreme right-wing Republicans were voted out of power by the American people after EIGHT YEARS of Bush-Cheney's lousy wars, torture, and spying...and lousy fiscal and economic mismanagement!

    People who call Obama names should BE FAIR and REMEMBER that JUST FOUR MONTHS AGO we had Bush-Cheney, whose approval raings were a lousy 20% and 10%, while Obama's approval ratings are still 65% to 70%!

  3. To SRS:

    Obama does one right thing. Hosannas and Praise.

    In the meantime, we have to weight it out against the unprecendented quadrupling of the deficit, ignoring the rule-of-law, his meddling in the auto industry, cap-and-trade, tax increases in the face of a recession (a la Hoover), his sickening "apology" tour of the world, soon to culminate in Germany and Cairo, with more bowing and scraping to those who were our enemies or are certainly not friends (and forget it, Bush did not cause any "rift" with Islam)...etc. etc.

    He does one good thing, and now we should get excited? The press has done a great job of pulling for this loser, in spite of his generally horrible performance. And so the gullible public still has high ratings, which are in low or LOWER than those of other incoming Presidents for the same time in their administrations.


    And it's interesting that you talk about Bush's "lousy wars, torture and spying", when Obama is doing many of the same things that Bush did!

    Obama could turn it around, maybe he will grow in office...and I sincerely hope he does, but thus far, he has shown either wilfull stupidity or just plain bad judgment.

    One good bill doesn't really mean much when he has saddled our kids with debts they can't pay, and is attempting, with the health care debacle-to-come, as with the cap-and-trade, to finalize our decline.

  4. Maurice,

    Thanks for your reply. Remember, I have my criticisms of Obama too. I'm just asking people to be "fair and balanced" by being equally critical and skeptical of the Republicans.

    For example, Obama did stop the TORTURING and KILLING of prisoners (NONE of whom were found guilty in a court of law) that Bush & Cheney were GUILTY of making official American policy! That's a BIG credit to Obama; do you grant that?

    Also, what about my 3 basic tests stated above?

    1)What specifically and realistically do you think Obama should do, given the way the world actually is and actually works (not some impossible ideal)?

    2)What specifically and realistically do you think that McCain or the Republicans in Congress would do differently (and better) than Obama? (Do they even have a credible, comprehensive alternative solution -- or are they just empty-headed complainers?)

    3) What specifically and realistically would YOU do differently (and better) than Obama?

    I honestly would like to hear good ideas from ANYBODY -- left or right -- and I will SUPPORT any good ideas and realistic solutions to our national and global catastrophes.

    But what I am SICK and TIRED of (after only four months!) is right-wingers calling Obama contemptuous names and complaining furiously about him when a) the right-wing was/is FAR WORSE than Obama in EVERY way! b) the right-wing largely got us into our economic and military messes! c)the right-wing has NO good ideas and NO solutions! and 4) the right-wing are hypocrites, sore losers, and cry-babies!

    Until the right-wing can come up with a credible, comprehensive alternative solution to our economic and military quagmires, they have NO GROUNDS to bitch about Obama. The BURDEN OF PROOF is on the right-wing -- do they have ANYTHING good? If so, let's hear it in detail.

  5. SRS, I gave Obinhood credit. I threw him an unsolicited bone. One of the few he deserves at this point IMO, but if he does something good I'll point it out. Lord knows we need something positive to report on. I'll call a spade a spade. I appreciate your comments and Maurice's and respect both opinions, but I'm 100% behind Maurice and don't see my opinion changing anytime soon. Not gonna discuss it any further, because it pisses me off.

  6. Shanky,

    I'm sorry if my comments, or just the situation, made you angry. Wasn't my intention. But I guess it's not surprising, because I'm mad too. The whole country and world are going through a terrible time, so everyone's distressed, nobody's happy with what anyone is doing, and lots of criticisms are provoking counter-criticisms. Makes it tough to reach common ground at such times.

  7. by being socialist and interventionist themselves the Republicans gave the Democrats the opportunity to go much further.

    The interventionism seems to have worked as well in overseas 'defence' as on the economy.

    You need a third party.

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  9. SRS, most people can't be balanced because lets be honest, few of us are balanced politically. Politics like religion often bring out the stubborn side in all of us.

    Personally, I formed my opinion of Obama a long time ago and I have not and likely will not change my opinion of him that he is a dangerous man in a dangerous period in time.

  10. Obama has disappointed many by picking the same ineffectual advisors(Geithner,Summers etc) who led us into the mess. By approving all of their actions, he is approving the transfer of funds from the treasury to the bankers. Nothing is being done to purge our system of debt: we are rewarding failure and making the productive pay for it. We are propping up failed companies and systems which will cause incredibly more damage down the road. Obama failed us all when he announced on national TV that greedy hedge funds led to Chrysler's need to enter bankruptcy proceedings. Those bondholders represented someone's grandmother or pension fund. When secured bondholders no longer have rights, why would anyone in the world take a chance on corporate bonds????

  11. I want to thank everyone for their replies to my comments. I obviously had a lot of pressure built up from hearing weeks of angry criticism and name-calling against Obama, but no good alternatives being proposed. I don't think that's fair, against anybody, not just against Obama.

    I have my criticisms of Obama too. I voted for democratic change, but like Anonymous/Trex said, Obama failed to provide positive change for the most pressing issue at present, the economic crisis. To be fair, Obama apparently believed that continuity, consensus-building, and proven establishment figures were more important than new, independent thinking. But I wanted bold reforms and regulations of a failed and corrupt system -- and instead, so far, Obama has preserved the old system with the same establishment ideas and officials who contributed to this crisis.

    But as much as I am critical of Obama, I am equally critical of Republicans who call Obama contemptuous (and often disgusting) names -- when they have NOTHING better to offer, and when Republicans got at least three major Republicans in power (Bernanke, Bair, and Geithner), and a continuation of the Bush-Paulson bank-bailout scheme.

    It seems like Obama has given more to Republicans than to Democrats regarding the banks -- so I don't know what Republicans want from Obama...or what they propose instead. I keep asking and waiting, but after many weeks -- still no Republican "better ideas," just lots of name-calling and complaining.

    One last fault I find with both Obama and the Republicans: Obama was wrong to under-value the contractual legal rights of Chrysler bondholders and to "strong-arm" them with political pressure. But the Republicans who criticize Obama for this action FAIL on many important points.

    Republican critics of Obama fail to equally criticize (and certainly don't name-call) Republicans Paulson and Bernanke for violating the law and using "strong-arm" government pressures against BofA CEO Ken Lewis (and against the legal rights and financial interests of all the BofA share-holders). Nor do Republican critics of Obama tie-in equal criticism of Republican Sheila Bair for her legally-dubious seizing of WaMu and giving it to JPM, apparently with no competition. Nor do these Republican critics tie-in equal criticism of Republican Paulson for illegally banning shorting -- with no advanced notice and in the middle of the night! (That dirty trick cost me personally.) There are many more examples of Republicans breaking the law and using "strong-arm" government pressures to achieve their goals -- but Republican critics of Obama never seem to give equal criticism to Republican officials who do the same thing as they criticize Obama for doing. That's hypocritical and intellectually dishonest.

    That was my main point in my original comments on this thread. Regardless of our political party, we all need to be intellectually honest. Don't name-call and criticize if you have nothing better to offer. Don't have double-standards and only criticize Obama when Republicans have done the same or even worse things. And look beyond Obama to realize that he is basically CONTINUING Bush's plan with Bush's people! (Think WHY this is.)

    We all need to deepen our analyses and criticisms to understand better that regardless of whether we have Bush or Obama, we have an entrenched establishment that will ALWAYS preserve our corrupt system and favored power-interests -- at the terrible expense of us "little people." THAT'S where we should focus our anger and fears. THAT'S what we need to change. And THAT'S where I hope we'll find common ground: respect for truth, fairness, laws, and the well-being of ALL the people, not just the super-rich and super-powerful.

  12. I just want to know where the hell is Shanky? I miss his witty comments and chart analysis. This political commenting is worthless to help me and everyone else here make money. Where art thou Shanky? :)



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