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2008-11-23 -Lurid Crime Tales-
UBS Stockholders - give us our money back, or we'll feed you to the crocodiles - heh
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Posted by 3dc 2008-11-23 04:52|| || Front Page|| [7 views ]  Top

#1 Is civilization falling?
Posted by g(r)omgoru 2008-11-23 07:46||   2008-11-23 07:46|| Front Page Top

#2 Subdivide civilization into the "real" economy vs. the "leveraged" economy. The leveraged economy is going to go down. Unfortunately, the US has been outsourcing its real economy with leveraged economy for decades. So we're going to take a hit until we can rebuild it.

There won't be any choice in this, because international trade is going to shut down for the duration.

For all his ambition, Obama and congress are out in the cold, because every inflationary trick they have used in past to prevent recessions won't work this time. He is in Hoover's unenviable position of just not grasping that times have changed.
Posted by Anonymoose 2008-11-23 08:55||   2008-11-23 08:55|| Front Page Top

#3 Unfortunately, the US has been outsourcing its real economy with leveraged economy for decades.

Take a pause. Look at Switzerland. How reliant have they been on manufacturing industrial base? How many auto companies do they operate? I don't see the Swiss as economically poor. Everyone wants the good old days in America, particularly those who didn't live in those good old days. Why not even further back a 100 years with most of the population engaged in agriculture before they were drawn to the cities and that demon of industrialization. Economies evolve. It's easier to be behind the curve to avoid the pitfalls and problems that come with pioneering the next version but sometimes he who gets there first gets the mineral rights for perpetuity.
Posted by Procopius2k 2008-11-23 09:24||   2008-11-23 09:24|| Front Page Top

#4 Ah yes, the good old days of having an economy that relies on that extremely energy cumsuming practice of manufacturing. Sure would have been great over the last half decade while energy prices were skyrocketting. Yessiree, Bob. M-O-O-N, that spells real economy.
Posted by Mike N. 2008-11-23 10:46||   2008-11-23 10:46|| Front Page Top

#5 CIA Factbook
GDP US industry: 19.8%
Swiss industry: 34%

So yeah, even the "Banker" Swiss make near twice the stuff Americans do. Even then, a lot of US industry is feeding the military, and thankfully, some is exported.

GDP US services: 79%
Not a balanced or healthy economy. The US agricultural and food processing industry is the only sector not operating in depression mode.
Posted by ed 2008-11-23 11:04||   2008-11-23 11:04|| Front Page Top

#6 The Swiss industry concentrates on highly developed specialized products and services. They are not engaged in vast general manufacturing. How many of the bemoaned 'exported' American jobs were generalized manufacturing? The industrial jobs everyone whines about that have disappeared are in large part low skill non-specialized employment whose qualifications in the 50s or 60s was a basic high school education [vice today's paper of propaganda which show attendance rather than hard academic standing].

The US agricultural and food processing industry is the only sector not operating in depression mode.

And its one not mainly composed of the mythical turn of the 20th Century family farm [other than ones that have incorporated] and largely subsidized and regulated through government programs. It's largely agribusiness.
Posted by Procopius2k 2008-11-23 11:52||   2008-11-23 11:52|| Front Page Top

#7 The "generalized manufacturing" consists of automobiles (higher end than domestics), computers, telecom and electronics, electrical production machinery, industrial tools, energy (carbon and electrical) clothing, and cheap plastic crap. You will notice almost the entire list is composed of high value, high paying, durable and capital goods. The cheap plastic crap and clothes sold at Walmart is just a small fraction of imports.

What do we have left? Ex-investment bankers, coffee barristas and massage therapists. No wonder the young voted for Obama. Stupid economic policies are bringing Marxism to America in ways the Red Army could never have hoped.
Posted by ed 2008-11-23 12:21||   2008-11-23 12:21|| Front Page Top

#8 For all his ambition, Obama and congress are out in the cold, because every inflationary trick they have used in past to prevent recessions won't work this time. He is in Hoover's unenviable position of just not grasping that times have changed. Posted by: Anonymoose 2008-11-23 08:55

Precisely correct! It's a lose-lose for Obama. Swiss UBS and big city US banks falter while small, regionals in the SZ and the US prosper. No magic involved, just a lack of gov't involvement. Remember, the small regionals controlled by hometown bank boards escaped the Gov't loan to anyone, buy-in, get a piece of the housing boom action, pressure. US investors are savy. They are just as angry as the Swiss and are waiting and watching.

If the economy continues to slide into depression or depression-lite, Obama and his Clintax dream team fail. If the economy returns even marginally, 401K's and investments recover, watch for continued Wall Street sell off's and withdrawls as money moves to small regionals and more secure, risk-avoidant investment and savings venues.

People are not as stupid as the gov't would have you believe. Big investment houses, like big government are becoming very unpopular. Key point to remember is, the majority of investors, business people, and true conservatives (48%) voted against Obama and the free lunch. The One's creation of "2.5 million new jobs"... (that's new gov't jobs) will only make the situation more dire. Unless the gov't nationalizes everything, where Americans put the resources which they have remaining, ie, investor correction, will determine outcomes. Not what an empty suit, Wall Street Soros socialist puppet does or does not do.
Posted by Besoeker 2008-11-23 12:28||   2008-11-23 12:28|| Front Page Top

#9 Ed, and what should US companies manufacture?
Posted by Mike N. 2008-11-23 14:09||   2008-11-23 14:09|| Front Page Top

#10 How about starting with automobiles (higher end than domestics), computers, telecom and electronics, electrical production machinery, industrial tools, energy (carbon and electrical) clothing, and cheap plastic crap. Or do you believe that is beneath Americans?

Do you realize the US is on track to a $800 billion trade deficit this year? Do you realize that the extra jobs and taxes if that money stayed in the US all these years would have been enough to balance the budget deficits and then some?

Do you realize the US even runs a trade deficit in medical equipment and drugs (many billions)? The nation with the greatest medical machines, drugs and miracles can't even earn a positive trade in it.

And food trade is just a small surplus, and in reality, in deficit if the food the US government pays for and gives away is excluded. Can you fucking believe it? An actual trade deficit in in food stuffs.
Posted by ed 2008-11-23 14:50||   2008-11-23 14:50|| Front Page Top

#11 #5 CIA Factbook
GDP US industry: 19.8%
Swiss industry: 34%

GDP US services: 79%


These are a little misleading. Many U.S. manufacturers outsource capabilities that companies in other countries keep in house. Examples include data centers, payroll processing, robotic support, etc. (and in some cases contract manufacturing). These are all classified as business services in the U.S. even if the work is for a manufacturing company.


I don't disagree with the point being made, however.
Posted by DoDo 2008-11-23 15:14||   2008-11-23 15:14|| Front Page Top

#12 There are better solutions than the current bailout circus. A huge majority wants the bad lenders to take major hits. Okay. Banks record loans as "assets" on their ledgers. These are "non-performing" where principal is not being paid on same. Rather than bailout financial institutions, it would have been better to force them into bankruptcy, which would yield fire sale prices for assets. However, that leaves the problem of having written down financial resources. And that means there is less money for loans. Many small businesses are closing because they have no access to money for inventory borrowing. Solution: use federal funds to back savings accounts alone, and NOT loan portfolios. That leaves investment funding in good shape, and compels punishing sales of bad loans. While investors would still be reluctant to put money in start ups, once ongoing businesses are on a pre-recession footing, investor confidence will grow.

What else should happen? Select commodity markets (petroleum, etc) should be abolished. Companies should be required to finance, in small part, with corporate bonds. Golden parachute deals with CEOs of poorly run companies should be abolished. Politicians who chimp the no-regulation chorus need to be discredited. Currency values should be fixed during global recessions (Mexico was relatively stable when the Peso was fixed at 12.5 to the dollar, for 22 years).

Institutional Economists like Thorsten Veblen and JK Galbraith, always said that market forces work best when subject to good regulation. Chicago absolutists, like Milton Friedman, tossed the "socialist" pejorative at anyone who wanted good regulation. Too bad his perverse theories didn't die with him.
Posted by Crolung Tojo6092 2008-11-23 16:40||   2008-11-23 16:40|| Front Page Top

#13 Yes. Let's manufacture everything here in America. That way parents can spend more money on the kitchen table and have less money available to put healthy food on it. Let's manufacture all our drugs here so people can afford less of them. Then patents can go out and get extra jobs (what jobs?) To pay for all the increased costs and as a result, have less time to raise their children.

Higher education? Yeah, right! We spent juniors college money on his clothes!
Posted by Mike N. 2008-11-23 18:07||   2008-11-23 18:07|| Front Page Top

#14 what jobs?

Why do you think that is? Is it because we have transferred the majority of our wealth creation machinery (you know, make things) to other nations? And even the financial engineering of creating money out of nothing has come to a screeching halt. Now there is nothing, no savings, no industry, to fall back on. Pay for your kids' college education on Walmart salaries. Though they too will be laid off since the most productive sectors have been shipped overseas. I guess mom can always table dance. What, even tittie dancers aren't making tips anymore? Spit.

It's been a great 40 years eating the seed corn our ancestors built up over 400 years. Now the US is out of savings and in debt to other people to the tune 100% of our GDP.

As for pharmaceuticals, we have gone from surplus to deficit with frightening speed. From memory, 5 years ago, the trade deficit was already $10 billion/year and growing fast. And you know what, Americans still pay the world's highest prices for drugs and have the most restrictive over the counter laws. Cheaper drugs my ass.
Posted by ed 2008-11-23 19:54||   2008-11-23 19:54|| Front Page Top

#15 So ed is say that mercantalism would have created more US jobs over the last 40 years than free trade has?
Posted by Mike N. 2008-11-23 21:23||   2008-11-23 21:23|| Front Page Top

#16 one word for why the Medical equipment manufacturing and Drugs have moves overseas: LAWYERS

want to re-vitalize the American economy? there are worse places to start than Tort Reform.
Posted by Abu do you love">Abu do you love  2008-11-23 21:34||   2008-11-23 21:34|| Front Page Top

#17 Look at the economic growth rates of our trading partners who engage in mercantilism. Yes it works marvelously well especially when there is a stupid 800 pound gorilla with a wide open market to exploit. Look at their shiny new industrial plants and infrastructure while ours, built in the '50s, crumble. Look at their personal savings and foreign exchange reserves while we have been spending our inheritance (literally) in the greatest transfer of wealth in history as opportunities for our young diminish year by year.

One other sure thing. The US would not have gone from largest creditor nation to largest (by far) debtor nation in a generation and we would not have to rebuild productive industry from scratch. We would not be facing a generation of diminished standard of living as we rebuild from this drunken debauchery.
Posted by ed 2008-11-23 21:54||   2008-11-23 21:54|| Front Page Top

#18 Rebuilding won't happen if we continue to follow this suicidal course. Instead our kids can look forward to a standard of living somewhere less than that of China or India since they are not so stupid as to open themselves wide to be picked clean. And there are those still poorer and hungrier waiting in the wings to pick at whatever is left of the American economic carcass.
Posted by ed 2008-11-23 21:59||   2008-11-23 21:59|| Front Page Top

#19 BTW Mike, Are you happy with the way the US economy is going? Would you leaveforeign trade situation as is? How many more years of $700-800 billion trade deficits do you think the US economy can absorb and when do you think the creditors will want something tangible for their money? What do we have to sell to them?
Posted by ed 2008-11-23 22:05||   2008-11-23 22:05|| Front Page Top

#20 Whatever happened to money representing available goods and services?
Posted by g(r)omgoru 2008-11-23 22:21||   2008-11-23 22:21|| Front Page Top

#21 The US dollar is a reserve currency, not the ZimBobwe dollar (yet). Most of them are not in circulation, but held in banks and mattresses (and drug dealers' hideouts).
Posted by ed 2008-11-23 22:30||   2008-11-23 22:30|| Front Page Top

#22 Actually, ed, I am happy with the economy. I would rather have messicans make our pills than pay more for drugs to just so I can pay American labor rates. And yes, I would rather get steel from overseas than have a government subsidized and unprofitable American steel industry. And no, the trade deficit doesn't bother me in the least because a nations economy isn't like my checkbook.
Posted by Mike N. 2008-11-23 23:12||   2008-11-23 23:12|| Front Page Top

#23 And mercantalism served us so well during the Great Depression. And the depression before that and the dression before that and and and.

Ever notice we haven't had one since we began embracing free trade?
Posted by Mike N. 2008-11-23 23:16||   2008-11-23 23:16|| Front Page Top

23:24 Abu do you love
23:16 Mike N.
23:12 Mike N.
23:03 MarkGL
22:46 phil_b
22:41 Mike N.
22:40 ed
22:35 Mike N.
22:30 ed
22:27 ed
22:22 g(r)omgoru
22:21 g(r)omgoru
22:20 ed
22:18 ed
22:10 g(r)omgoru
22:06 gorb
22:06 Abu do you love
22:06 g(r)omgoru
22:05 ed
22:03 gorb
21:59 ed
21:54 ed
21:37 Tarzan Whugum2586
21:35 Tarzan Whugum2586









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