OK i know that for more than 2 years while house shopping I've thought that ... this craziness can't last. I've read articles about impending economic implosion based on 'money from the sky' relaxed lending policies. And I've also at the same time heard deep heartfelt flaky rants about GlobalWarming, and the Peak Oil crisis from over caffineated underachieving hype gobbling doomsday dominated brown bearded modern day hippies while trying to walk away backwards, slowly. War Images and terrorism on TV, fear mongering from the media and politicians, Canadians dying in Afganistan on a weekly basis are heavy news indeed. Fresh imagery of a hostile world with fast internet is greatly helping to create culture clashes and fuel power struggles, (yes we already know this).
It feels like the early 1970's all over again. Vietnam, hippies, gas crisis, Mary Tyler Moore, and Richard Nixon.
With the sudden and dramatic changes over the past 6 months all i can say is WTF just happened in a blink of an eye?
Last i remembered it was August/September mostly everyone is happily steaming along, gas in Canada was $1.25 a litre and to fill my tank was $80 or $90. There were rumblings about American looming mortgage crisis, GWB was on his way out but still everyday we heard his voice somewhere on TV news or comedy shows or the web, and I’m sure that simultaneously people all around the world shook their heads with disbelief that the worlds most powerful nation still lets this moron lead the country. The Canadian dollar was near par to the American dollar, it had been above for months, and colleagues, fellow freelancers were buying iPhones with stupidly expensive monthly packages, and renting out new more expensive apartments.
And then within about 3 weeks in November the shit literally hit the fan. The American economic 'free money to the banks with no strings' TARP rescue plan had been half implemented with no changes in the economic landscape and, still the economists refused to say 'recession' or the 'r' word.
After going thru the deep recession of the late 80's and early 90's with personal experience of hardship finding work fresh out of University, I'll say this; sure as shit it’s a recession if the popular media economists say roughly that they are not yet willing to use the 'R' word. My advice to you is SELL SELL SELL ! they are lying and buying time to save their own asses first.
December was dismal, nobody really knew what was going on except for the fact that people, seemingly unrelated to the banking crisis, started to loose their jobs. Gas prices were falling, a door to the WTF! information was opening slowly but, because of the retail power of xmas, and not wanting to spoil any 4rth quarter potential profits, most lips were sealed tight. One positive thing, gas was $.66 cents a litre, a tank was less than $50. un-f’n-believable, and to boot the CDN dollar was .15 cents lower than the US dollar. Confusing since Canada does not have the huge deficits that the US has, i think in December we were still operating with a budget surplus. So why all these dramatic changes? Read on.
January in Canada like all over the world, we stopped being productive for a day and watched the Obama Inauguration with a huge sense of relief and pride for Americans, I photo scanned the front page of the Toronto Star with a picture of Obama and the caption " A Dream Fulfilled". A nice memory for my pictures folder.
I can say that as a regular listener to NPR ‘This American Life’ and ‘Planet Money’ podcasts i do know a bit about what is going on in the financial world and it’s effects on the ordinary American, (and myself a Canadian). Clearly what i can say now after hearing Wednesdays ‘Planet Money’ podcast about saving the banks its like getting hit in the gut with a baseball bat. LINK Suddenly now it makes sense. I've heard Ira Glass struggle with the financial crisis and the election, and I've been following 'top' economists on a regular basis, esp the NPR people and now i will say that these people are now no longer struggling with what is happening and what has just happened.
A Dream Fulfilled has become a sudden screaming cold-sweat wakeup from an 8 year nightmare that most of us never knew the extent we were in. Yes liberals squrimed with GWB, the war, abomination of the Constitution and other suspensions of rights and freedoms, and uhh tax cuts for the uber wealthy. But people never really knew or thought about where all this would take us and the world.
The drop in the Canadian dollar? a result of panicking American investors getting out of the stock market and into US Gov't t-bills.
The drop in gas? Simple. A big drop in US demand as wallets slam shut on bad economic news, job losses, and home foreclosures, creates a sudden surplus.
The banks? simple, the biggest banks in the world are insolvent. They cannot pay pensioners monthly 'guaranteed' incomes, they cannot loan money or move money around because they have more liabilities than assets, and remember that every country around the world is affected because of individuals, public and private investors global portfolios.
A failed major American Bank means that Americans will lose their savings account balances, mortgages, pensions, AND any other country or individual who has financial interests in these institutions will also loose 'everything'. 8-) And if word got out what is going on, like 1929, there would be a run on the banks. That means thousands of people running to the bank, in person, to take their money out before everyone else does. close their accounts before the banks run out of money.... which is how Bernie Madoff go caught. People started asking for some cash back that he didn't have.
So that is why there is no option to let the banks fail. they have everyone over a barrel.
The only plan is (A) either the previous GWB Administration/Sept Henry Paulson plan: just give the money to the banks for free and let them continue in the same business fashion or (B), make them accountable for the money by giving them a loan, which is called Nationalization. This is what people want, they just don't like the real dictionary defined name for it. I hope they can make the connection and accept the unpalatable word for their own sake. Also along this rant is a note of how people use the word democracy. USA is a democratic REBUBLIC. Helping others in need does not mean SOCIALISM or a drop off the cliff to Marxism. Words seem to have so much power over people and these touchy words create a cognitive dissonance that breaks from reasonable societal practices, like republicans that don't want to nationalize the banks but want the banks to be accountable, you can't have both. its like dipping your toes and believing both creationism and darwinism exist simultaneously.
Take your pick because letting them fail is going to suck. Oddly enough it might be the quickest way to recovery.
A new president, that can speak English, an entirely new economic cloud and dismal future for the next few years, possibly a depression.
And my hopes for steady income or buying a home anytime soon have vanished as lending rules have just snapped shut with an audible.
WTF just happened indeed.
The rich repugs got away with a pot of gold and an extra bonus of taxpayer billions just before their paid for president leaves office, taking weeks to sift through the rubble to find the answers. Now we have them. We are Fucked.
For the uber rich and market smart that is one sweet victory after another.
0 comments:
Post a Comment