ch.annel2-i.s-n.ow-a.ngry

And here’s the $700 billion dollar answer: Infinite Mimosas!

And if you’ve been curious about the radio silence as of late, well, I’m freaking sick of the news right now. My next post will probably be tuesday night around midnight, either detailing plans for helping get this nation back on track, or starting a new one somewhere else.

“There’s no credit crunch at Room Source!” Someone’s desperate. I’ve also noticed lately that every other commercial is “all we need is your signature! We’ll give you a fucking car AND pay the first month’s payment! 0% interest! We need to improve our numbers before we tank all the way!” 

I just realized my video embeds aren’t coming through on the RSS feed, poor show old chap. I swear wordpress is actually getting worse the longer it’s been installed. A re-install or upgrade may be in order, because they seem to have it handled on their own hosted feeds, since I see vid links from there all the time. In any case, I will provide a link to this next video, and if you ever see a post that’s just a title in your RSS history, click it and there will probably be a video hiding there for you.

“>And the promised link to the video.

The current predicament was not caused by insufficient government regulation and the risk of future disruptions will not be mitigated by increased government regulation. The mortgage market was already heavily regulated prior to the crisis, but had it been even more regulated and had the regulations severely crimped, rather than boosted, the abilities and desires of financial corporations to expand the supply of mortgage-related instruments, then the focal point of the boom would have shifted; however, bubbles would still have formed somewhere and these bubbles would subsequently have burst, leaving financial wreckage and major economic dislocations in their wake (the bust is always and everywhere a consequence of the preceding boom). The reason is that the boom was caused by the central bank fixing the price of short-term credit at an artificially low level for a prolonged period, thus encouraging trillions of dollars of investments and new business ventures that should never have seen the light of day. In effect, the central bank created an environment in which prudent lending practices were punished and reckless lending practices were rewarded.

And the Fed, through it’s control of the interest rate, is inherently socialist.

superpoop.com

For the record, that looks fake, but still fun as shit all get out.

The nation’s debt as a percentage of all economic activity, while growing alarmingly now, is not at historic highs. The portion held outside the American government, here and abroad, in the form of Treasury securities was $5.8 trillion at the end of last month.

That is a relatively modest 40.8 percent of the nation’s annual income, far below the 109 percent coming out of World War II or the nearly 50 percent in much of the 1990s.

Put another way, if the entire national income were dedicated to debt repayment, the debt would be paid off in less than five months. For most of the years since 1940, paying down the debt would have taken longer, putting a greater strain on income.

It’s like they’re not even listening to what they say. If the entire national income (which I’m guessing they’re basing on GDP, which is on it’s way down) was dedicated to paying off the national debt, it would take at least 8-10 months. You must remember the GDP calculates in ‘phantom money,’ such as the money homeowners would be paying themselves in rent as if they were renting their houses from themselves. I’ll leave it as an exercise of the reader to try to figure out what percentage of GDP that is, the point is the NYT isn’t even listening to themselves.

I think what they meant was the foreign-owned portion of our debt. Anyway, their scenario is unrealistic, because we’re spending at least 400 billion a year in interest, at least according to how the NYT calculated interested on Treasury bills on page one of the article. They say at 4% (what long-ass-term treasuries are selling for, short term are negative percentage or near so), an extra one trillion in debt equals 40 billion a year, and that’s only for new debt, all the debt already sold may have locked in interest rates based on the prevailing rates of the day. They also didn’t calculate how much of our income currently services the debt, which the US makes monthly payments on (and since we’re in deficit-only spending at this point, I can only assume that the debt is serviced with more debt, like paying off one credit card with another, and I assure you that is a wildly losing prospect.)

Also what’s not mention in this article on debt and deficit is the fact that the White House *refuses* to calculate the cost of war borrowing into the deficit. So instead of the deficit being a nice, non-half-trillion $455 billion dollars, the total is more like $562 billion deficit this year, and thusly the deficit has been underreported since at least 2003-4.

At least the poor, unsuspecting NYT flack got torn apart in the comments, rightly so. At first I thought there were no comments, turns out they just hide them on a separate page. Good thing I found them, check this out:

The current aggregate Federal deficit is $10 trillion dollars, and will likely increase by $1 trillion in the current fiscal year. Add to this amount, the unfunded debt obligations of the US government to Social Security ($7 trillion) and Medicare ($34 trillion dollars), and you arrive at a total aggregate government debt of $51 trillion dollars, or about $400,000 per US household. Using these numbers, US government debt is now at epidemic proportions, regardless of what economists say about the debt being a relatively small proportion of GDP. Most people do not realize that the money workers are paying into Social Security and Medicare today is not being placed in a bank for their later use. The government spends that money as soon as it gets it, meaning the government owes people paying into the system today for future benefits when they retire. This years’ cost of living increase for Social Security was 5.8%, and healthcare costs continue to increase at rates above inflation. The impact of Social Security and Medicare obligations on Federal borrowing will increase significantly with time, amplifying US government debt obligations even further

When the US government debt bubble bursts, the magnitude of the consequences will dwarf the pain associated with today’s current global economic crisis. Who will bailout the US government when its creditors cash in their US Treasury bills, and decide not to renew them?

As if the $500+ trillion derivatives market wasn’t scary enough.

It was like a roast on Comedy Central, only funny.

Nationalization of banks and announcements of unlimited liquidity measures are not good things. However, but we have seen this playbook before. The futures are jumping once again during options expiration week.

It is likely the move off Friday’s low started wave 4 of 3 up. Please see S&P 500 Crash Count for a reference.

However, a more important thing to look at is in the context of the E-wave there referenced by the ‘wave 4 of 3 up’ statement, which won’t make any sense until you look at the graphics in this essay by M. Shedlock. Especially anyone looking for the bottom to jump into investing, you would be wise to read that last link, written by an investment advisor at one company not sunk by credit or mortgage woes.

In short, if you jump in now, expect the rally to last a month or two and be prepared to cash out before the next downswing. Stay alert. It’s rallying because things are starting to get done, what remains to be seen is how well these things will work now that they’ve started.