What made America RICH was the rebuilding of the world after WW2. Today the USA doesn't have the same mfg capacity to redo the economic results of WW2

One more thing, Tabs.. Some of the large states like CA and NY are in bad shape financially as well. They can keep borrowing and bonding until at some point no one wants their debt paper as it becomes too risky. States, unlike the Fed, have to balance their books each year and don't have access to the printing press to print more $. When they reach that point watch out! All those large entitlement social programs will finally drag them down the same drain as Lehman is spinning around this morning in NY.

I posted this over at the C Rose Board...

Comment by TABS on Saturday, Aug 30 at 05:22 AM

In 1968 LBJ transfered the Social Security Trust Fund to the General Accounting Office to be used to help finance the Vietnam War. The United States government has never turned back and has continued to place the SS Trust Fund monies into the general accounts to help disguse the Federal Deficit. By 2014 payments will exceed income to pay the retirees................................This we can have it all, because we are rich philisophy of Guns and Butter has been slowly BKing America. This YES we can have it all mentality started with Lyndon Baines Johnson......... Complete fiscal irresponsibilty has reigned in the US government since that day. Unfortunately Americas leadership has become inured to the looming consequences and NOTHING will stop them until the United States is BK. A President Obama may hasten that day thats all. The hand writing is on the wall.......................BTW: This author became aware of this back in 1980.

This is called the IMPOVERISHMENT of the American people. NOBODY will be immune.

Well Daddy we are into the fire....today...and it will be a wild ride. I have a sneaking suspicion that at the end of the day things will look better.

tabs, does trust fund dissolution mean you'll finally get a real job, or will you revert to selling off your collectibles at 15 cents on the dollar? SmileWavy

As news of the collapse(s) filters down to Joe6P, we'll see another drop in economic activity. Heck. It seems most OTers are oblivious to the LEH collapse. Or perhaps, no one cares. :rolleyes:

BofA is buying ML. Wow... If we weren't in such a mess, I don't think this would ever go through. What a mess.

I'm feeling better now about selling off half my stocks back in July when the market was around 11,400 and putting it in CD's. If the market drops to 9000, I'm buying!

It gets worse, before it gets better.

somebodies made millions and got out before the proverbial stuff hit the fan.

I have to admit, the 'Rug Doctor' is one interesting piece of work:

4:18 AM The ripple effect of this is quiet possibly a GLOBAL COLLAPSE OF THE FINANCIAL MARKET. With that you can KISS EVERYTHING YOU HAVE KNOWN GOODBYE! No banks, no investment house means NO LOANS TO BE MADE, assets will not be able to be sold. That means they will be worthless. Money will be worthless.


4:34 AM NOT ONE OF YOU PEOPLE HAS THE SLIGHTEST CONCEPTION OF WHAT THE GREAT DEPRESSION WAS LIKE.

5:26 AM this scares the B GEEZUS outa me....


6:25 AM I have a sneaking suspicion that at the end of the day things will look better.

______________________

You kind of remind me of one of those ditzy women in those horror movies, with all the bloodied bodies strewn about, who runs, screaming through the room yelling, "We're ALL GONNA DIE!!!"

Finally, someone grabs her by the arm and bytch slaps her till she becomes coherent again.

Amusing fellow.

No matter how you wana slice it or dice it....things in the past few months have been on the knifes edge....first with the Bear and then Freddie and Fannie being guaranteed. Being taken over was just the denouement. Each of those occurences was an avoidence of the abyss.

Today it could very well become unraveled. Chances are not. The Fed and Treasury along with major banks throughout the world are pumping in liquidity and are braced. Wild ride yes, end of the world today no.

What I have been refering to is the GRAVITY of the situation. It could very well unravel the Global economy. This is the second time since 1929 that we have been on the precipe (the 1st was 911, which set the stage for today). Only this time it will be worse because all the finacials in the world are "interconnected" a snever before. A chain reaction of implosion..


U can count of WAMU going...and CITI being sold off piecmeal to become a much smaller co if things go well for them. AIG is another big maybe? Wacovia is another one to watch.

If the financial markets can ride out the sucessive waves of failures we might survive. If too big of a wave hits it is "likely" to swamp the system. That is why I take such umbrage at the foolishness of THE and Harddrives positions, of lets get it done now. They know not of what they speak. Neither do many of the other people on this Board who are oblivious as to the magnitude and implications of the situation on their lives.

And the ecomony grew 3.1% last quarter.

Big deal. Let them fail.

Other companies will rise to take their place. I am a direct competitor of one of the companies you mention, and in my little sphere, they were doing many stupid things..

And yes our house is in order and we are waiting to eat their lunch.

What made the economy grow that 3.1%? Unless I'm mistaken, it wasn't from new manufacturing. It wasn't from anything produced in this country?

I don't trust "growth" unless there's something tangible to back that growth up.

Privatize profit, socialize risk.

Tabs I more or less share all of your concerns.

The people that are telling now that everything is fine are the same that in Aug 2007 said investors would buy after the holidays, the same that told us Bear was the turning point. Then Fannie and Freddie were the needed intervention to stabilize everything... and now LEH.

At least now we can begin the process. Before it was just a "pass the hot $hit" around and hope. Now some stuff has finally been written down to zero.

The problem is the $62 trillion (or $62,000 bn, or $62 million millions) of credit Default Swaps. The money lost on this stuff will be incredible (not only protection written on Lehman, but the protection Lehman was short that has to be written down)....

I am very nervous...

Some quick thoughts -

LEH was rapidly circling the drain all last week. From my perspective, investors were saddened that a 158 year old bank was going under. But, interestingly, investors I talked to were not all that worried about impact of a LEH failure for the financial system ("systemic risk").

Since BSC, Fed has greatly increased scrutiny of investment banks' operations and has had people embedded at key parts of the i-banks. LEH failure has been anticipated for months, by Fed and by other banks, everyone has had plenty of time to reduce or hedge their exposure to LEH. Supposedly LEH was never as big a player as BSC in CDS market. Sentiment I'm hearing is that Fed's refusal to step in at LEH reflects their assessment that systemic risk is manageable. Hopefully that assessment is right.

MER deal w/ BAC is kind of unexpected - not the sale, but the timing and price - but doesn't alarm me.

Yes, tide is turned against the standalone investment bank model. But at the end of the day, MER's business will still go on, it'll simply be part of BAC. C and JPM have investment banks inside commercial banks, also UBS and Credit Suisse and many others, and I don't see the difference. The independent investment banks seem to function much like the investment banks that are part of commercial banks. So, to me, it doesn't matter if MER stays independent.

The issue really is BAC, not MER. If MER problems are so big that they threaten stability of BAC that would be negative. I don't know if that's the case, but I rather doubt it - MER already took big writedowns and raised a lot of capital, and premium paid by BAC suggests they're not seeing MER as a distressed business.

Wonder if market will next go after the last independent bulge-bracket investment banks MS or GS, or will target weaker banks like WM etc to kill next.

But most interesting/concerning thing for me is AIG. How much do we really know about AIG's situation and resulting systemic risk? For me, so far, not much. Fed doesn't regulate the insurance industry and I'm not sure how much Fed knows about AIG. Guess we'll find out . . .

BTW, I don't think tabs is overstating the seriousness of all this. We are skidding toward the cliff's edge, counter-steering like mad - hope we catch the skid before going over.

Interesting to note - cash in money market accounts ($3.5TR) is 28% of total market cap of all US stocks ($12.4TR), the peak in 2002/03 was 30%.

Not from housing bubbles and easy money.

Mostly exports. Heavy equipment and farm products.

Don't worry - the media is ignoring this - so can you.

A new spin on the proverbial tree falling in the forest - if it is not reported on - it did not happen.:)

Oh, like Buicks to China?

:confused: I watch FOX and MSNBC business. I don't think either would ignore it if it's true. Not that I'm saying this isn't true, i.e. heavy Buicks (or heavily-equipped Buicks) exported to China.

No not Buick's to China. That would add up to .001%.


And did not make up the 3.1% figure.


But don't worry. We are in a recession and we need "change". And apparently we will continue to need change til Obama is elected.